Sears Holdings sold Sears Canada's best assets and starved the rest — 12,000 jobs lost

Sears Canada was a fixture of Canadian retail for 65 years, at one point the country's largest department-store chain. By the 2010s it was owned by Sears Holdings, the US parent controlled by Eddie Lampert, which treated the Canadian unit less as a business to grow than as a source of cash to prop up the struggling American chain.

Over a decade the parent sold off Sears Canada's most valuable assets and sent the proceeds south. Its stake in the flagship Toronto Eaton Centre lease and four other prime stores was sold in 2013 for about C$400 million, and its credit-card portfolio went to JPMorgan in 2014 for about C$288 million. Almost nothing was reinvested in the stores, even as rivals and online shopping pulled customers away and sales fell year after year.

In June 2017 Sears Canada filed for creditor protection under Canada's CCAA restructuring law, closing 59 stores and cutting 2,900 jobs in a first round, hoping to shrink to a viable core and find a buyer. No buyer came. On October 10, 2017 it asked the Ontario Superior Court for approval to liquidate everything; the court agreed on October 13. The last of the remaining stores closed on January 14, 2018, eliminating nearly 12,000 jobs and leaving the pension plan about C$270 million short.

Sold the Eaton Centre lease and credit-card portfolio for C$688M, reinvested almost nothing, leaving no collateral for rescue; 12,000 jobs lost, C$270M pension gap.

Sears Holdings treated Sears Canada as a source of cash, selling its flagship leases and credit-card arm and sending the proceeds to the US parent instead of reinvesting.

Years of underinvestment left the stores tired and uncompetitive as shoppers moved online and to rivals, so sales fell for years running.

The 2017 restructuring bet on finding a buyer for a shrunk chain, but no buyer came for a retailer with weak stores and no growth plan.

With the best assets already sold, nothing valuable was left to use as collateral or to attract a rescue, so liquidation was the only outcome.

A subsidiary is not a parent's cash machine. Sears Holdings sold Sears Canada's best assets and reinvested almost nothing; when the chain needed rescuing, nothing was left to sell.

Sears Holdings itself filed for Chapter 11 in the US in October 2018 and liquidated its American stores as well. The Sears Canada name, which had anchored the country's retail for 65 years, disappeared. The case is cited alongside Target Canada as a warning that a foreign parent can hollow out a chain by extracting its assets while underfunding the stores.