Sears Canada Inc. (TSX: SCC) announced this morning that it will close its Pacific Centre location, along with its Calgary Chinook Centre and Ottawa Rideau Centre stores.
The company will return the three stores to commercial real estate developer and landlord the Cadillac Fairview Corp. Ltd. for a consideration of $170 million.
Sears plans to close all three stores by October 31 of this year. It has operated at Pacific Centre since 2000.
Sears president and CEO Calvin McDonald called the deal “very advantageous” for the company.
“While we had no plans to close stores, the transaction for these three specific locations provides an attractive financial benefit for the company which strategically allows us to drive growth in areas which can be most beneficial,” he said.
“We are investing in a refresh of our stores and piloting new formats which will provide Canadians exciting ways to access Sears products and services.”
Corporate communications director Vincent Power told Business in Vancouver that Sears currently has no firm plans to open further stores in the Vancouver area – but he did not rule out the possibility.
“We’re always looking for possible sites that will work,” he said, noting that Sears already operates elsewhere in the Greater Vancouver area in other formats, including Sears Home stores.
The company said that employees affected by the transaction will be able to apply for jobs at nearby Sears locations.
In December, Urbanics Consultants principal Phil Boname told Business in Vancouver that Sears has been paying less than $2 per square foot in rent.
At the time, Sears did not confirm its rent rate or reveal whether its lease rate has been a significant factor in its Pacific Centre store’s viability.
A call to Sears was not returned by press deadline.
At press time, Sears’ stock was up 5% to $12.83.