12,000 layoffs – After failure to sell, Sears is officially going out of business

After 65 years of being a department store giant, Sears, the company whose Canadian division launched as an e-commerce brand has now ironically collapsed because of it.

The company was already a retail store giant in the United States before expanding into what was initially a mail-order business in Canada.  By the 1950s, revenues solely from mail-orders sky-rocketed to over $100 million.

The first Sears catalogue was distributed in Canada in February, 1953 and came packed with household merchandise as well as fashion items encompassed in 556 pages. At the time, “city-slackers” were not into flipping through catalogues so Sears responded with a massive expansion that lasted decades, building new stores and expanding existing ones.

In 1973, Sears opened the first stand-alone store and at the time, it was the go-to destination for top selling brands, especially for appliances. Up until Sleep Country became relevant in the market, Sears was also the most popular destination for mattresses and bedding.

The culture at the time was different as well. Department stores were local hangouts. People would dress up and shop in groups for the latest fashion. Even the elevator operators wore white gloves. Kids and adults alike could not wait to receive the textbook-sized Sears catalogue to pick out gifts for their wish lists.

Fast forward to July, 2017, Sears was removed from the Toronto Stock Exchange (TSX). Now, after desperate attempts to the save the company, Sears has announced they are officially going out of business and are set to liquidate their remaining merchandise and assets.

Sears’ imminent decline into bankruptcy is due to many factors from corporate failure to poorly maintained stores to disorganized attempts to refine customer relationship management. Sears made poor financial decisions such as trying to keep costs low with stand-alone stores yet still paying very high rent for their stores that operate within malls.

Their CEO, Eddie Lampert launched a program called Shop Your Way which was supposed to encourage customers to return by letting them incur redeemable points on every purchase they make. Unfortunately, the logistics of the program was too complicated for many customers to be able to reap the benefits and strict quotas imposed on employees to sell the program held up lines and disgruntled many customers.

Many of the bigger locations continued to struggle due to staffing cuts which made the burden of maintaining the location almost impossible. Many stores had clean front-ends however clearance sections and other uncommon sections of the store were cluttered, disorganized and made for a very unpleasant shopping experience.

Out of the 12,000 pending layoffs, approximately 800 employees in Toronto’s Sears head office will be the first to go. Some subsidiaries owned by Sears will survive due to creditor protection such as their logistics and shipping company, SLH Transports and certain divisions of their home improvement brands.



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