Sears Canada’s U.S. parent to reduce holdings in company

Sears Canada Inc. says its U.S. parent will be reducing its holdings in the company and may even sell the rest.

Following the partial spinoff, Sears Holdings Corp. will retain about 51 per cent in Sears Canada. But it said it may choose to sell or distribute to investors any portion of its remaining stake in Sears Canada. Sears Holdings owns Sears and Kmart stores in the United States.

“We are looking forward to working with Sears Holdings on its plan to pursue a partial spin-off of its shares in Sears Canada,” said Calvin McDonald, Sears Canada’s president and CEO. “While we have benefited from a close relationship with Sears Holdings, we believe this distribution would provide an increased focus on our performance as an independent company and enhance the liquidity of holders of Sears Canada’s common shares.”

In recent months, Sears Canada has been undergoing a major revamp of its operations as it closed some stores and cut staff to reduce costs.

McDonald was brought on last summer to help reverse recent losses, and he immediately began an initiative to declutter the stores.
 
In March, the company said three high-profile department stores in Vancouver, Calgary and Ottawa would close by the end of October affecting some 670 jobs.

And this month, Sears Canada began making it easier for customers to return products.

Sears has roughly 30,000 employees across Canada and more than 400 corporate, dealer and home services stores.

The transaction requires regulatory approvals in the U.S. and Canada.

With files from The Canadian Press