Sears Canada (TSX:SCC) is selling three properties in Western Canada, including two in British Columbia, to Concord Pacific Group of Companies for $140 million, the retailer announced March 11.
The three stores, located at Metrotown in Burnaby, Cottonwood Mall in Chillwack and North Hill Shopping Centre in Calgary, are not closing, the company said. Instead, Sears Canada will keep the stores operating under long-term leases, and the chain said there will be no layoffs.
“The agreement with Concord is a great way for Sears Canada to create value from its network without adversely impacting operations,” said Sears Canada president and CEO Ron Boire, who took the helm of the struggling retailer in January.
“This transaction will strengthen our financial position as we continue to implement initiatives designed to make Sears successful.”
The transaction is scheduled to close June 8.
This isn’t the first time Sears Canada has worked with Concord Pacific regarding the Metrotown location. In 2013, the company announced it had joined with Concord to develop the lands with potential residential, office and retail space. The latest move is just a variation of that, Vincent Power, Sears Canada corporate communications, told Business in Vancouver.
“We are not really in the business of managing properties per se,” Power said. “What we’ve done now is said we are going to take the cash as a sale transaction right now, and any development will be Concord’s to do in the future.
“The only change now is rather than going in and developing this, we are just going to take it as a straight sale transaction and that’s [Concord’s] business, developing property.”
Power said the move is not related to cost-cutting.
“This really is trying to create value in our network without affecting our store operations,” he said. “It really is just a real estate transaction. Everything else for Sears stays the same.”
As of press time, shares of Sears Canada were trading at $12.14 – an increase of 1.17%.
This announcement comes a couple weeks after the chain reported a $339 million loss for the year ended January 31. The company said this was related in part to the closure of several stores over the year, but same-store sales had also fallen 8.3% during the period.
Sears Canada has 172 corporate stores, 201 Hometown stores and more than 1,300 catalogue and online goods pickup locations.