The former owner of three now-closed Sears Hometown stores in Central Oregon says the business was profitable.

“I just want people to know, we didn’t leave by choice,” said Heidi Wood, who operated the stores in Madras, Prineville and Bend that shuttered earlier this month. “This was a corporate decision.”

Sears Hometown & Outlet Stores Inc., based in Hoffman Estates, Illinois, is a spinoff of Sears that focuses on appliances, tools and equipment. The company announced on June 8 that it had closed 21 stores in the three months that ended May 5 and planned to “aggressively pursue options to exit the remaining under-performing locations,” an estimated 90 to 100 more stores.

Wood said the company acted aggressively after she objected to closing the stores in Madras and Prineville. Auditors moved in, and she was found to be in violation of her contract as a franchisee. The Bend store is also closed, though Sears Hometown had hoped to keep it open, she said.

A Sears Hometown spokeswoman said the stores have been closed “due to unforeseen circumstances.”

The company is evaluating “all business options and exploring which communities in Central Oregon would be best-served by future store locations,” Ellie Halter of Fishman Public Relations said in an emailed statement.

A Sears Hometown store in Redmond, operated by a separate franchisee, remains open.

Wood isn’t the only local business person who was affected by the abrupt closings. Sears Hometown had moved in May to a new Prineville location, 1059 NW Madras Highway, and Wood said the landlord invested $100,000 to bring the building up to corporate standards.

The corporate office required Wood to find a new location and sign a five-year lease before it would renew her franchise contract, she said. Sears Hometown’s relocation had also disrupted another tenant, Wood said.

“If Sears knew this was a direction to close these stores, why would they have me move it?” Wood said. “It’s wrong.”

While Wood holds the lease, Sears Hometown owns the store’s inventory, said John Goodman, attorney for the property owners, William and Victoria Goodman.

“We’ve locked the tenant out of the building, and Sears doesn’t have any rights to get into it,” John Goodman said. “A number of facts are still in dispute, so the liability of various parties will need to be sorted out.”

Wood opened the Madras store with her mother in 2006 and bought the Prineville location in 2013 from the corporate office, which had taken over the store from a different franchisee. She opened the Bend location on S. U.S. Highway 97 in 2014.

The rural stores were profitable for the franchise owners, who collect a commission on sales, because overhead costs were lower, Wood said. “They were underperforming for corporate.”

Before the corporate office began scrutinizing her operation, a district manager had approved monthly reports, Wood said. “They had to find contract violations to be able to do this, and they did,” she said.

As an example, Wood said Sears Hometown has a policy that requires certain paperwork to be on file for anyone who holds a key to a store. She said she didn’t know about the policy, and after contacting other store owners, she realized many of them weren’t aware of the policy either.

Wood said she is hoping Sears will agree to take over the lease on the Bend store. Until then, it remains closed.

—Reporter: 541-617-7860, kmclaughlin@bendbulletin.com

20599469