Beleaguered Canadian retailer seeks private backers

The struggling firm faces the prospect of shutting down 59 stores

Beleaguered Canadian retailer seeks private backers
When the going gets tough for businesses, a private equity deal could save them from their woes. This applies at least to Sears Canada, the struggling clothing, appliances and furniture retailer who is reportedly in talks of negotiating a private equity-backed deal valued at over $650 million.

The Wall Street Journal reported that the retailer's executive chairman Brandon Stranzl has taken a step back from the company's day-to-day operations to focus on plans to seek private backers. To recall, the company filed for creditor protection in June.

Stranzl's potential deal would be financed partly with debt financing and through private equity capital sourced by Baker Street Capital Management founder Vadim Perelman, the WSJ noted.

Additionally, the proposed offer would cut the company's store footprint by more than half. However, it could still retain at least 8,000 jobs whilst it settles its bankruptcy loans.

The Star reported recently that the government has been pressured to protect pension holders, including the 18,000 Sears Canada employees and retirees who are at risk of reduced payouts due to the retailer's insolvency.

Worth noting is that when Sears Canada filed for creditor protection, it has announced the planned closure of 59 stores and the laying off of 2,900 employees.

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