Sears Canada flags 'going concern' doubts, explores sale
By Ahmed Farhatha and Siddharth Cavale
(Reuters) - Billionaire Eddie Lampert-controlled Sears Canada Inc (SCC.TO: Quote) flagged doubts about its ability to continue as a going concern and said it was exploring strategic options, including a sale of the company, following years of losses and falling sales.
Sears Canada's shares slumped as much as 56 percent to 50 Canadian cents in early trading, as investors fretted about whether the company would be able to weather this liquidity crisis before it found a buyer.
The company was valued at about C$51 million ($38.5 million)at its lowest stock price on Tuesday, a far cry from the C$1.18 billion valuation when it was partially spun off from Sears Holdings Corp (SHLD.O: Quote) in November 2012.
Sears Canada, much like Sears Holdings - now its fourth-largest shareholder - has struggled for years to remain relevant to shoppers who have switched to stores that keep up with fast-changing fashion trends.
The company has also booked losses as Wal-Mart Canada and Amazon.com Inc (AMZN.O: Quote) have stepped up competition.
Sears Canada's sales have fallen every quarter since it was spun off from Sears Holdings in 2012.
Sears Holdings, in March, also warned about its ability to continue as a going concern. The company said on Tuesday that it would cut 400 full-time jobs at its headquarters in Illinois as part of its plan to save more than $1 billion in costs annually.
Sears Canada said it would postpone its 2017 annual meeting scheduled for June 14 to a date it would determine later. Continued...