Sears' hardship fund being financed by chairman's retention bonus
TORONTO -- Sears Canada executive chairman Brandon Stranzl is stepping away from his role to launch a bid for the beleaguered retailer, which is restructuring under court protection from creditors.
A memo to staff Wednesday about his departure from the top job said the company's goal is to create a path to emerge from creditor protection.
Interested buyers have until the end of August to submit bids under its court-supervised restructuring.
"In light of the approaching bid deadline and the focus required to assemble all necessary components of a bid, the board thought it was best for Brandon to focus exclusively on putting the bid together and step away from the day-to-day operations of Sears Canada," wrote Graham Savage, chair of the board's special committee.
Sears Canada's chief operating officer, Becky Penrice, will take over his duties.
The retailer filed for court protection under the Companies Creditors' Arrangement Act in June. It's looking for a buyer or investor for the company or some of its assets and is also negotiating with lenders, landlords and other creditors.
The retailer announced a plan in June to close 59 locations across the country and cut approximately 2,900 jobs, without severance, while under CCAA.
On Tuesday, the company created a $500,000 hardship fund for former employees who were denied severance payments when they lost their jobs at the retailer. The money will come from cash set aside for executive bonuses.
Sears Canada was criticized when it received court approval to pay $9.2 million in retention bonuses to keep key employees on board while not paying severance to laid-off workers.
The company plans to finish liquidation sales by Oct. 12 and hopes to complete its restructuring this year.
Once a retail go-to, Sears Canada has struggled in recent years despite efforts to change along with the retail business.
The company has also dealt with several changes in executive leadership over the last four years.