Sears Canada retailer behind lawsuit to close his store
Michael J. Knell -- Furniture Today, September 18, 2013
WOODSTOCK, Ontario — The leader of a C$100 million class action lawsuit against Sears Canada and its U.S. parent, Sears Holdings, has announced he is shuttering his Hometown dealer store here on Dec. 15.
"We are now joining the growing ranks of Sears Dealer Stores that simply cannot continue, and have to close their doors," Jim Kay wrote in his blog Share the Pie, which he set up to inform class action members about the progress of the suit. "We have issued our termination, and the Woodstock store will close Dec. 15."
He was quick to stress that he remains committed to lawsuit. "This does not affect our standing as plaintiffs in the Class Action Lawsuit, and we will vigorously pursue the case for the benefit of all dealer stores," Kay said.
The lawsuit was filed in July against Sears Canada and its U.S. based parent, Sears Holdings, and alleges the publicly held, multi-channel retailer "breached its legal obligations by depriving the dealers of the realistic opportunity to earn a living wage and make a reasonable profit from their store businesses."
The dealer store owners are represented by the Toronto-based law firm Sotos LLP. The certification hearing is expected to be held sometime in the next three months.
Sears Canada has said it believes the suit is without merit and will retain outside counsel to vigorously defend itself. The company also said it is hoping for an amicable resolution to the issues.
Kay said he believes that almost 30 of the independently owned and operated Sears outlets have closed this year.
He also said Sears will pay 100% of the special advertising costs for new dealers coming into the system but "there is no offer of help or subsidy to keep existing store owners going."
Although many stores have asked for help, he said Sears Canada has rebuffed them all. "Instead there seems to be a few secret, select stores that receive ‘golden handshakes' where Sears takes the dealership back and pays the dealer to stay on as a manager.
"Why the double standard?" he continued. "If they can afford to run the store corporately, then how is it fair to let an owner walk away after investing so much in the business? The answer is that it is not fair. Everything is done solely for the benefit of Sears, with no regard for the people and families that are left holding the debt of a dubious venture."