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Sears staves off liquidation, U.S. stores to remain open

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Sears will live on — at least for now.

The company’s chairman and largest shareholder, Eddie Lampert, won a bankruptcy auction for Sears, averting liquidation of the iconic chain, according to a source familiar with the negotiations. The person agreed to speak on condition of anonymity because they were not authorized to discuss the negotiation publicly.

Lampert is the only one to put out a bid for the whole company. The 56-year-old billionaire had sweetened his bid to more than $5 billion over the last few days through an affiliate of his hedge fund ESL. Details of the final terms are not yet known.

The plan still must be approved by the bankruptcy judge in White Plains, New York, who is presiding over the court case.

Lampert, who steered the company into bankruptcy protection, may be able to keep the roughly 400 remaining Sears stores open, meaning tens of thousands of jobs have been saved, at least for now.

Casualties of the Amazon era

Whether Sears, founded 132 years ago as a mail order watch business, can survive in the Amazon era remains questionable. Already, Sears has outlasted Toys R Us, Sports Authority, Bon-Ton Stores and dozens of others that were unable to survive the torrents of a massive recession and unrelenting technological change.

Sears, which also operates Kmart, filed for Chapter 11 bankruptcy protection in October. At that time, it had 687 stores and 68,000 workers. At its peak in 2012, its stores numbered 4,000.

Lampert, who gave up the CEO title when the Sears filed for chapter 11, says there’s still potential for the company.

Industry analysts are not so sure.

We remain extremely pessimistic about the chain’s future.– Neil Saunders, managing director of GlobalData Retail

“While there’s no doubt that a shrunken Sears will be more viable than the larger entity, which struggled to turn a profit, we remain extremely pessimistic about the chain’s future,” said Neil Saunders, managing director of GlobalData Retail. “In our view, Sears exits this process with almost as many problems as it had when it entered bankruptcy protection. In essence, its hand has not changed, and the cards it holds are not winning ones.”

In this Nov. 17, 2004, file photo Kmart chairman Edward Lampert listens during a news conference to announce the merger of Kmart and Sears in New York. Lampert has played several, often conflicting, roles 132-year-old company. He’s been chairman, CEO, landlord, lender, and largest shareholder all at the same time. If the company survives, he wins. If it ends up liquidating, he also wins. (Gregory Bull/Associated Press)

To survive, Sears needs to overhaul its business, revitalize aging stores and focus on major appliance and tools sales, say industry analysts.

Still, it won’t be easy. Walmart, Target and others have been heavily investing in stores and expanding online. The difference is that they have the capital to keep spending.

Under Lampert, Sears has survived by spinning off stores and selling brands that had grown synonymous with the company, like Craftsman. Lampert has loaned out his own money and cobbled together deals to keep the company afloat, though critics said he has done so with the aim of benefiting his ESL hedge fund. ESL has maintained that the moves put much needed cash into the business.

Lampert personally owns 31 per cent of the Sears’ outstanding shares and his hedge fund has an 18.5 per cent stake, according to FactSet.

Buy may get big tax gain

Four years ago the company created a real estate investment trust to extract revenue from the enormous number of properties owned by Sears. It sold and leased back more than 200 properties to the REIT, in which Lampert is a significant stake holder.

He stands to realize a big tax gain keeping Sears alive, using the company’s years of net operating losses to offset future taxable income if one of his other companies takes over the chain, says David Tawil, president and co-founder of Maglan Capital, which follows distressed companies.

Tawil and others believe Lampert wants to be in full control of liquidating Sears’ assets, including real estate.

Lampert combined Sears with Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy. He pledged to return Sears to greatness, but that never happened.

The company, hammered during the recession and outmatched in its aftermath by shifting consumer trends and strong rivals, hasn’t had a profitable year since 2010 and has suffered 11 straight years of annual sales declines.

Lampert has been criticized for not investing in the stores, which remain shabby.

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Future of Ottawa: Coffee with Francis Bueckert

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Francis Bueckert: When it comes to the current landscape of coffee-roasting companies and independent cafes in Ottawa, I think we are at a really interesting moment in time. There are more local roasters that are doing artisanal small-batch production—with more attention to the quality and origin of the beans.

With larger corporations such as Starbucks closing locations, it has opened a bit of space for local players to grow. We have been lucky to work with many folks in the coffee-roasting community, and we have found that there is a willingness to collaborate among different coffee roasters. For example, when Cloudforest started back in 2014, we were roasting our coffee at Happy Goat and it was the expertise of their head roaster Hans that helped me learn how to roast. Other companies such as Brown Bag Coffee have also lent a hand when we needed extra roasting capacity. There are others, such as Lulo, Mighty Valley Coffee, Bluebarn, The Artery, and Little Victories that are also part of the growing local coffee community. It’s small roasters like these who have shown me what a coffee community can look like, and that we can help to elevate each other, rather than being locked in competition.

If you care to make a prediction… What’s happening to the local café industry in 2021?

We believe that there is hope and that 2021 can be a big pivot year for small roasters and cafes.

This year will not be ideal from a business point of view. However, it could create a shift in people’s attitude toward where they get their coffee. We are holding out hope that people will support the roasters and cafes that are local to help them economically survive what is in all reality a very difficult time.

It all depends on where consumers decide to go this year. People are starting to recognize that supporting large corporations at this moment will be at the cost of the local roasters and cafes. There is the growing realization that a future where there is only Amazon, Walmart, and Starbucks would be pretty bleak. So we have an opportunity this year to support the kind of local businesses that we want to see thrive.

In your wildest dreams, what will the landscape for local coffee roasters and cafés look like in your lifetime?

In my wildest dreams, all of the coffee roasters and cafés would be locally owned and independent. They would all be focused on direct trade and artisanal coffee. Each different coffee roaster and café would know exactly where their coffee came from. Ideally, each company would be a partnership between the farmers who grow the beans and the people here selling them. There would be a focus on how to cooperate and collaborate with the farmers in the countries of origin to share the benefits around. We would all work together and share orders of cups, lids, and other packaging so that we could get better bulk pricing. In this way, we would make our local coffee community so efficient that the large corporate coffee companies wouldn’t even be able to compete.

We would also like to see people use coffee as a way to create social good. For example, we started Cloudforest as a way of helping support farmers in Ecuador who were taking a stand against large mining companies. This remote community stood up to protect their environment, so that they could have clean drinking water and soil for the next generation. They started an organic coffee cooperative to help show that there are other models of development, and we are doing our part year after year to help support their vision. They have a vision of development that does not include mass deforestation and contamination, and organic coffee is a key (among others) to show that another way forward is possible.

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Special events in the Ottawa Valley dominate annual OVTA tourism awards

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The Ottawa Valley Tourist Association hopes that its annual tourism awards will provide a little sunshine during what is a dark time for local tourism operators because of the pandemic.

The Ottawa Valley Tourism Awards are presented annually by the Ottawa Valley Tourist Association (OVTA) to individuals, businesses, and events that recognize the importance of working together for the growth of the local tourism industry, as well as offering exceptional visitor experiences.

“After a year that saw a lot of businesses in the hospitality and tourism industry being challenged like never before, the annual Ottawa Valley Tourism Awards represent a bit of light on the horizon” said Chris Hinsperger, co-owner of the Bonnechere Caves.

The Ottawa Valley Tourist Association’s (OVTA) Awards Committee co-chairpersons, Meghan James and Chris Hinsperger, said they were very pleased with the recent nominations received, especially in the Special Events category. Submissions were received for The Farm to Fork Dinner Series at the Whitewater Inn; Light up the Valley; The Eganville Curling Clubs’ Rock the Rings; The Ontario Festival of Small Halls ; The Bonnechere Caves On-line Underground Concert Series; The Opeongo Nordic Ski Clubs’ Ski Loppet; The Tour de Bonnechere — Ghost de Tour 2020; and The Bonnechere Caves Rock ‘n Roll Parking Lot Picnic.

“During a time when communities were challenged, it is nice to see that people still made an effort to get together and celebrate, albeit under certain conditions. It just shows the creativity and resiliency of our tourism Community here in the valley” said Meghan James, director of sales at the Pembroke Best Western.

There are three Award categories: The Marilyn Alexander Tourism Champion Award, The Business of Distinction and The Special Event of the Year.

Hinsperger, is excited about this year’s awards.

“During this pandemic the hospitality and tourism industry was the first to be hit, was the hardest hit and will be the last of our industries to fully recover. As Valley entrepreneurs we owe it to ourselves, to our businesses and to our communities to be an active part of that recovery. Our livelihood and economic recovery depends on our efforts. And we will get back to welcoming people from all over the world to share a little bit of the place we are privileged to call home. This awards process leaves myself and others fully optimistic about our positive outcomes.”

Award winners will be announced at the Ottawa Valley Tourist Association’s virtual annual general meeting on Monday, May 31.

The OVTA is the destination marketing organization for the Upper Ottawa Valley and proudly represents more than 200 tourism businesses, comprised of attractions and outfitters, accommodation, food, beverage and retail establishments, artists and galleries, municipalities, as well as media and industry suppliers. The OVTA is supported by the County of Renfrew, Renfrew County municipalities and the City of Pembroke.

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Future of Ottawa: Farming with Jeremy Colbeck

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Jeremy Colbeck: Well first, let’s talk about what we mean by farming. Although farms, and farming as an occupation, are in decline across Canada, they are still a major part of our rural landscape. That’s even more true for a strange city like Ottawa which includes a LOT of rural areas and whose urban boundary takes, what, three hours to cross? About 40 per cent of the rural land in Ottawa is farmland. Most of that farming is corn and soybean cash-crop, as well as some dairy and livestock farming. That’s mostly conventional farming (the kind that is profitable but not exactly where you take your kids on a Saturday).

There are also a lot of agri-tourism businesses in Ottawa, which give you that oh-so-good Saturday spot for family donkey-petting and apple-picking. And it’s totally understandable from a business perspective, but sometimes surprising to find out, that even though they grow some of the Christmas trees they sell, they might also be reselling some that come from much larger farms far away. The farmland around Ottawa is also inflated in price because of its proximity to the city, where it is in demand by would-be hobby farmers—folks who want to do some farming on their property in their spare time but make their money (to subsidize their small-scale farming habit) elsewhere. Unfortunately, many of these properties will have large mansions built on them, which will then make them completely unaffordable for the average farmer

There’s also a segment of small-to-medium-sized Ottawa farms that grow “premium” (artisanal, unique, extra-fresh, ecologically- or organically-grown etc…) products that they sell directly to local eaters via farmers’ markets or other direct marketing channels, including on-farm stores and farm stands. That’s where BeetBox fits in.

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