Sears’ American parent to slash its stake in Sears Canada, may sell rest of its stock
Thu May 17 2012
Sears Canada says its U.S. parent will dramatically reduce its holdings in the troubled department store chain and may sell all of its stake.
About 95 per cent of the common shares of Sears Canada are currently owned by Sears Holdings Corp., which also owns the Sears and Kmart department store chains in the United States.
Sears Canada announced Thursday that it had been informed that its parent plans to reduce its holdings to 51 per cent by transferring stock to other shareholders and may then sell some or all of the rest.
The announcement came a day after the Canadian retailer announced it had a profitable first quarter, eliminating a year-earlier loss through cost-cutting and downsizing measures.
Included in earnings for the quarter was a $164.3-million pre-tax gain on lease terminations of stores in Vancouver, Calgary and Ottawa announced March 2.
With the help of the special items, Sears Canada earned $93.1 million or 91 cents per share, compared with a net loss of $47 million or 45 cents per share for the same period last year.
Revenue in the quarter slipped 7.8 per cent from a year earlier to $915.1 million from $992.5 million, including a decrease of 6.3 per cent in same store sales.
Sears Canada president and chief executive Calvin McDonald said his company is looking forward to working with Sears Holdings on the partial spin-off.
“While we have benefited from a close relationship with Sears Holdings, we believe this distribution would provide an increased focus on our performance as an independent company and enhance the liquidity of holders of Sears Canada’s common shares,” McDonald said in a statement.