Struggling Sears Canada Inc., whose U.S. owner plans to unload most of its stake in it in a rights offering, is getting a temporary new boss.
Sears Canada said on Wednesday morning Ronald Boire is becoming acting chief executive officer, effective immediately. Previously he was chief merchandising officer at U.S. parent Sears Holdings Corp. as well as president of its two key retail divisions, Sears and Kmart Corp.
He replaces Doug Campbell, who took the helm just a year earlier and unexpectedly decided last month to leave by the end of 2014 for personal reasons. He will stay to help in the transition, Sears said.
Sears said in a statement it is continuing its search for a permanent replacement for Mr. Campbell "and Mr. Boire is a leading candidate in that process." Mr. Boire was not available for an interview.
The naming of a former Sears Holdings executive to the top job in Canada underlines the ties that the parent and controlling shareholder, Edward Lampert, is keeping with the Canadian division. That's even while troubled Sears Holdings plans to sell most of its ownership in the Canadian unit in a $380-million (U.S.) rights offering. The plan, announced earlier this month, came after Sears was unsuccessful in finding a buyer for the operation here.
When the offering goes through, it will cut the parent company's ownership of Sears Canada to just 12 per cent from 51 per cent. But it will leave Mr. Lampert and his hedge fund, ESL Investments Inc., with an almost 47-per-cent stake in the Canadian retailer, up from the current 27 per cent.
"Sears Holdings management will presumably in future be directing 100 per cent of its attention to the U.S. business, while ESL and Edward Lampert oversee the management of both Sears Holdings and Sears Canada," Keith Howlett, retail analyst at Desjardins Securities, said in a note in early October.
"Edward Lampert is a talented investor with intimate knowledge of Sears Canada."
Sears Holdings, Mr. Lampert and ESL, the private firm he controls, have been big beneficiaries of Sears Canada's profits in the past year or more as the division divested valuable leases and properties, resulting in big dividends for its shareholders.
Last year, Sears Canada issued a special dividend of $509-million and, in 2012, $102-million. Sears Canada has raised cash by selling leases of some of its most prominent stores, such as the ones at the Toronto Eaton Centre and Vancouver's Pacific Centre, back to its landlords. And it has slashed costs and staff while outsourcing some operations.
Mr. Boire, the new acting CEO, joined Sears Holdings at the beginning of 2012. Before that, he was CEO of U.S. gadgets specialty chain Brookstone Inc., which went through bankruptcy proceedings in the summer, and previously had top positions at retailers Toys "R" Us Inc. and Best Buy Co. Inc.
"Ron brings a deep understanding of the business from his recent experience at Sears Holdings where he had responsibility for the Sears and Kmart formats," William Crowley, chairman of Sears Canada, said in the statement. "He is a highly respected retail leader and those of us who have worked closely with him value his retail leadership and commercial approach to business."