Sears Holdings Corp (NASDAQ:SHLD) might not hold a majority of Sears Canada’s equity anymore, but the affiliate’s bankruptcy should help those holding SHLD stock understand just how messy things are going to get in the U.S.
If Eddie Lampert thinks he’s going to get out from under his moral obligation to pay severance to longtime employees, he’s got another thing coming.
Let me be clear, I’m not an attorney, nor am I an expert on bankruptcy law in either country, but I do know a thing or two about retail, so I feel it’s necessary to say my piece on the subject.
What’s Happening in Canada is Shameful
My June 30 article about Sears Holdings touched on the bankruptcy of Sears Canada. Today, I’ll fill you in on what’s happened since then.
Are you familiar with Mike Myers, the actor?
Yes, the same Mike Myers from Saturday Night Live who went on to do the Austin Powers and Wayne’s World movies. Well, he’s from Toronto, and his brother Peter worked at Sears Canada for 35 years, most recently as senior director of planning.
On July 13, Sears Canada announced its restructuring plans as part of its bankruptcy proceedings, which included closing 59 stores and firing 2,900 people. Peter Myers is one of them. After almost four decades with the department store, Myers was getting the ax without any severance — not a penny.
Myers’ departure is especially ironic because Sears Canada’s former management asked the longtime employee on several occasions to get his celebrity brother to do a commercial.
In 2014, Peter Myers agreed.
“I said, I will do this commercial if it’s about how Sears isn’t closing,” Peter told Business News Network shortly after his dismissal. “Mike turned to me at one point when we were having a break [during the filming of commercial] and said, ‘I guess they can never fire you now.’ We laughed because it was not really a thing.”
“When I told him [about the firing], he couldn’t believe it and he really wasn’t happy,” Peter Myers revealed. “I do see the irony.”
Big Retention Bonuses for Fat Cats at Head Office
In Canada, most people are disappointed that Sears Canada is firing several thousand people but they understand that it’s just business.
However, when it was learned that none of the employees would be getting any severance — one expert suggests Myers was eligible for two years’ pay for his tenure — and the court had approved CAD$9.2 million ($7.4 million) in retention bonuses to keep the company operating during the store closures, the citizenry went ballistic.
The hashtag #BoycottSearsCanada has become a social media firestorm. The protest’s become so bad the company’s been forced to close comments on its Facebook Inc (NASDAQ:FB) page, turning the entire process into a PR nightmare.