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Eddie Lampert considers sale of Sears Canada

Eddie Lampert has milked Sears Canada for years — and now he’s looking to gut the company for good.

The hedge-fund billionaire, who as chairman of Sears Holdings has been selling Sears Canada’s best stores and skimming its cash since he took control in 2005, is exploring a possible sale of the 61-year-old chain, The Post has learned.

Lampert is interviewing multiple banks including Goldman Sachs about conducting a prospective process, according to sources close to the situation.

Spokesmen for Sears and Goldman declined to comment.

Sears boss Eddie LampertAP

“There’s a real beauty contest going on,” according to one insider briefed on the talks.

Nevertheless, some sources were skeptical whether a bank-run auction of Sears Canada will take place. Lampert already has been quietly shopping the retailer to prospective buyers without success, insiders said.

“Eddie never actually hires banks,” one insider told The Post. “He just sucks their brains and does what he wants.”

What Lampert wants, according to sources, is to accelerate his recent moves to turn Sears Canada into cold, hard cash, despite announcing plans last year to mount a data-driven “turnaround” of the Toronto-based department store.

Last week, Sears Canada issued a $483 million dividend, even as its quarterly loss widened to $46.3 million. Most of the cash was bagged in an October deal to close the Toronto flagship store and end four other leases for $380 million.

That transaction, according to industry sources, has fanned worries among Sears suppliers and executives alike about the future of the chain.

“Eaton Centre [in Toronto] was one of their best locations,” an exec at one supplier said. “They’re insulting us if they tell us they want to stay in business.”

The latest sale of profitable locations follows the sell-off of other high-performing stores in Vancouver, Calgary and Ottawa to Nordstrom. It’s a template for what’s to come, according to Mark Cohen, a professor at Columbia Business School who had been CEO of Sears Canada from 2001 to 2004.

“When legitimate companies sell assets, they reinvest by paying down debt or using the funds to invest in the business,” Cohen said. “What’s Eddie Lampert doing? Putting the money in his pocket.”

“If anybody harbors the illusion that this guy has any capability or intent of running this company anyplace but into the ground, he’ll lose that illusion real fast,” Cohen added.

Over the past decade, Sears Canada has seen its operating profit evaporate as revenue has slid from $6.5 billion in 2002 to $4.3 billion last year.

The dire straits stand in sharp contrast to a decade earlier, when it refused three separate merger overtures by rival Hudson’s Bay, according to a person close to the situation.

Now, insiders say Hudson’s Bay doesn’t appear to be interested in a deal. Target and Walmart may pick up some locations in a liquidation scenario, although the former said last week it continues to suffer losses after a surprisingly weak start in Canada this spring.

“Sears is going to close all their stores, liquidate all their goods and distribute the cash to shareholders,” an industry source predicted. “Then they’ll wait for a period of time and then file for bankruptcy.”