Sears Canada raises doubt about ability to continue, posts $144.4-million loss
Sears Canada is reviewing its strategic alternatives including the possible sale of the company as it warns there's "significant doubt" regarding its ability to continue as a going concern.
The retailer says that based on management's current assessment, cash and forecasted cash flows from operations are not expected to be sufficient to meet its obligations over the next 12 months.
New Brunswick announced in January that it would give Sears Canada more than $8.7 million – much of that in payroll rebates and loans – to help create 530 jobs at two new call centres in Saint John and Edmundston.
But a spokesperson for the company tells The Daily Gleaner it will continue with plans to establish the centres, pointing out that they're already open and hiring.
Sears Canada says it had expected to able to borrow $175 million, but now expects to borrow only about $109 million.
The company says it also lacks other assets, such as real estate, that can be monetized in a timely manner.
The announcement came as it reported a first-quarter loss of $144.4-million and a 15.2 per cent decline in revenue compared with the same quarter last year.
There were improvements in sales at its stores, but revenue fell by about $90 million to $505.5 million due to a drop in its catalogue and web-based sales.
Sears Canada also postponed its annual meeting, which had been scheduled for Wednesday, until an unspecified date.
With files from Brad Perry