Sears CEO Calvin McDonald appears more willing to entertain offers for Sears store leases. This could provide opportunity for new Nordstrom, Target, Simons and other retailers looking to expand in Canada.
A Sears insider notes that the company is willing to fight hard to improve its financial position, and has started to divest of some real estate interests. For example, yesterday, Sears sold its stake in a Medicine Hat, Alberta mall for $43million. Yesterday (Wednesday December 12) the store issued a special dividend of $1/share, for a total of $102million. Both show a potentially aggressive move by Sears to go head-to-head with Target.
To quote Calvin McDonald:
“When people call, our due diligence is to evaluate that conversation. When we evaluate our portfolio of stores and look to find the balance between trading value and real estate value, our focus is very much on trading value in the organization. We are not in discussions with anybody, but we constantly evaluate our portfolio and look for opportunity for value.”
Calvin recognizes the value in Sears Canada’s assets and may be willing to shore-up its financial position by divesting some real estate holdings. This is HUGE news, as Sears has some of the best large-format retail real estate in Canada. Sears already sold interest in three store leases for $170million, paving the way for Nordstrom’s Canadian entry. We’re asking our Sears insider to monitor their situation and with what other store leases they may release.
Sources: Sears Insider, Financial Post.
Sears Canada website: www.sears.ca