A dozen Vancouver Island employees are among more than 600 workers who have lost their jobs just days before Christmas now that a major Canadian home- improvement business operating under the Sears brand name has gone into receivership.
SHS Services Management Inc.’s financial troubles are affecting customers, suppliers and businesses hired to carry out work such as putting in new windows, heating or air conditioning systems, or installing a roof. The company is not owned by Sears.
Essential Air, of Greater Victoria, is on a 17-page list of unsecured creditors owed a total of $4.47 million, according to a document filed in court. Company owner Dean Ford said Monday the estimate of $3,569 owed to his firm is low. “We have a bunch of ongoing work right now that has not been billed.”
Ford is unclear about what is going to happen. “At this point I’m trying to get information from them.”
Essential Air has 10 staff, he said. If the company is not paid, “It will make it definitely tough this time of year. Difficult to pay all our bills because we, of course, put money out on these projects.”
SHS has stopped operating.
Suppliers and installers should stop any jobs-in-progress unless they get approval from receiver PricewaterhouseCoopers, it said on its website. Installers are not to start on any previously planned projects.
Many of SHS’s 643 employees worked out of Sears stores across Canada. Court documents show 74 of SHS’s employees were in B.C., including six in Greater Victoria, and the remaining six up-Island.
PricewaterhouseCoopers was appointed receiver on Friday following an applications by SHS in the Ontario Superior Court of Justice in Toronto.
SHS’s outstanding financial liability as of Wednesday was $17 million and it can no longer make payments, company director Michael Clements said in an affidavit filed in court.
“The concession simply is not a viable business.”
SHS cannot make payments to its two main secured creditors, Sears and Alaris Income Growth Fund Partnership Ltd., as well as to other creditors, the company said in its court filings.
SHS began operating in March under a concession agreement with Sears, selling interior and exterior home renovation products and services under the Sears brand. Although SHS anticipated $208 million in annual sales, results have been “dismal” and the company is insolvent, a SHS document states.
The company lost nearly $14 million to the end of October, it said. Payroll is about $570,000 weekly.
The receiver has set up a hotline for customers’ questions at 1-855-376-8474 and on the web at pwc.com/ca/en/car/shs.
PricewaterhouseCoopers is asking customers to provide information on deposits, stating that claims for deposits generally rank as unsecured claims against the company. Information to creditors is to be issued within 10 days.
Sears said it will honour Sears Home Services warranties.
