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This article was published 11/10/2017 (254 days ago), so information in it may no longer be current.
The death knell has sounded for the rest of the Sears stores in Canada, which will throw hundreds more local employees out of work and leave gaping holes in four of the city’s regional shopping centres.
The embattled retailer, which sought protection from its creditors in June, said Tuesday it had failed to find a buyer that would allow it to continue as a going concern. The court overseeing the company’s operations is set to hear a motion Friday seeking approval for the liquidation and wind down of the business.
"The company deeply regrets this pending outcome and the resulting loss of jobs and store closures," Sears Canada said in a statement.
Sears currently has 74 full department stores, eight Sears Home Stores, and about 49 Sears Hometown stores all facing closure.
It has about 12,000 employees, including 359 at its three Winnipeg stores that are still open in the CF Polo Park, St. Vital and Kildonan Place shopping centres.
Its fourth store, in Garden City Shopping Centre, closed on Oct. 1. That outlet had 81 full- and part-time workers.
The 12,000 figure doesn’t include 2,900 job cuts Sears Canada previously made in June, when it announced the closure of 20 department store locations, 15 Sears Home stores, 10 Sears Outlet and 14 Sears Hometown locations.
The four Winnipeg stores range in size from 92,000 square feet to just under 260,000. Their pending closure will leave mall owners and managers with more than 600,000 square feet of retail space to fill.
A spokesman for the Garden City mall said last week the centre has yet to decide what it will do with the Sears space. The general manager of the Polo Park mall said he’s optimistic it can backfill its nearly 260,000-sq.-ft. Sears space without too much difficulty because of the mall’s popularity with retailers and shoppers alike.
The general managers of Kildonan Place and St. Vital centres wouldn’t say Tuesday how they’re likely to backfill their Sears spaces.
But Kildonan Place general manager Sandra Hagenaars did confirm the mall already is working on replacement options for the space.
The Kildonan Place store is about 120,000 sq. ft. in size, while the St. Vital store is about 131,500.
While backfilling more than half a million square feet of space at the same time might seem a daunting task, two local commercial real estate leasing specialists said it might not be as difficult as some observers might think.
"I think all of these malls will take back the spaces and be able to reformat and fill these locations," said John Pearson, a commercial real estate broker/developer with Shindico Realty Inc.
Pearson said malls likely will have to subdivide the space, in much the same way Kildonan Place filled its former Target space with almost a dozen new tenants, including Marshalls, Home-Sense and H&M.
Ken Yee, senior vice-president of the Winnipeg office of Cushman & Wakefield, said the silver lining in the Sears situation is that the shopping centres will be able to replace a struggling anchor tenant that hasn’t been the draw it once was — with new retailers bringing more shoppers to the mall.
"In large part, we feel that landlords and developers are welcoming the opportunity to repurpose these 100,000-square-foot boxes," he said.
"Not only do you get to see better rental rates from smaller boxes, but the no-build zones will typically now vanish and the opportunity to build pad sites will be yet another positive stemming from this upheaval."
Yee said Cushman & Wakefield has one retailer lined up that is interested in leasing about 50,000 sq. ft. in the Garden City mall, and several others who would like to lease space in a standalone retail pad on the property. He said the managers of the St. Vital mall also are working on backfilling the two-storey Sears store with some diverse retail brands.
"We have an offer in on 24,000 square feet of the second floor that we know will be a boon for St. Vital Centre and the population of southeast Winnipeg," he added.
"We were just waiting... for today’s announcement so that we can move ahead with the deal."
Sears is the latest victim of department-store decline that has swept North America as a growing number of consumers gravitate to shopping online and away from brick-and-mortar outlets.
While Sears has dabbled in pop-up stores and e-commerce, its distribution centres aren’t as automated as Amazon.com Inc. or even Canadian peer Hudson’s Bay Co., which last year opened its own robotic facility to accelerate online orders.
— with files by Bloomberg and The Canadian Press
Updated on Wednesday, October 11, 2017 at 9:59 AM CDT: Adds photo