The owner of a Sears outlet in Woodstock is spearheading a class-action lawsuit against Sears Canada and its American parent company, Sears Roebuck.
Jim Kay says the lawsuit, which was filed last week, is a last-ditch effort after the company failed to respond to other entreaties from dealers at 260 Sears Hometown outlets in smaller-sized cities across Canada.
“We’ve exhausted all feasible means of getting this resolved,” he tells CTV.
“We’re happy to share the pie with Sears, but we need our fair share, because we’re starving.”
At issue are restructurings in the arrangement between Sears Canada and its Hometown dealers that, Kay says, see more money going to the company and less to its storeowners – enough less that, according to Kay, 70 per cent of Hometown dealers are earning below the average household income.
“It’s a combination of a lot of different pieces of the business that add up to equal unsustainability. We’re just not getting reimbursed enough to make it go,” he says.
Some of those issues include reducing stores’ advertising budgets and restructuring commission agreements in a way that Kay believes funnels more money to corporate headquarters.
“We had a signed contract with them, and they have completely redone it,” he says.
Kay says the Hometown stores are among the company’s most profitable, but an unfair amount of that profit is kept away from the stores themselves – driving owners to get out of the business, at which point the company finds someone else to take the reins.
“They make good money off of these stores, which is why they keep handing them to the next guy.”
In an email to CTV News, Sears Canada says it believes the lawsuit’s claims to be without merit.
“We have … retained outside counsel and we will defend the claim vigorously,” the company says.
