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UPDATE 4-Sears Canada to close stores, cut jobs in restructuring

(Adds comments from retail consultant, details on debt)

TORONTO, June 22 (Reuters) - Sears Canada Inc said on Thursday it plans to cut jobs and close stores as it restructures its operations, following years of declining sales as it has lost customers to big-box retailers, more nimble apparel companies and online merchants.

The Canadian company, which was spun off from U.S. department-store pioneer Sears Holdings Corp in 2012, said it planned to close 59 of its 225 stores and cut 2,900 of its approximately 17,000 workers as part of a restructuring that was approved by an Ontario bankruptcy court on Thursday.

Existing lenders have agreed to provide up to C$450 million ($340 million) in interim financing to help the company, controlled by billionaire hedge fund investor Eddie Lampert, reinvent itself as an apparel company selling discounted designer labels and low-priced clothing.

Retail experts said they were not convinced the company will succeed in its effort to re-position itself, pointing to its failure to keep up with fast-changing consumer tastes in recent years.

Maureen Atkinson, a senior partner at retail consulting firm J.C. Williams Group, said Sears Canada may not come out of the restructuring: "One way or another, it's not going to be an easy road for them. As is the case with all department stores."

The plan calls for abandoning areas long associated with the iconic Sears brand, such as home appliances, tools, electronics and auto parts sold at its Sears department stores, home stores, discount outlets and Corbeil appliance and electronics chain.

The news was not unexpected as Sears Canada, much like Sears Holdings, its fourth-largest shareholder, has struggled for years to regain business from shoppers who prefer stores that keep up with fast-changing fashion trends.

The company has total liabilities of C$1.1 billion, according to its results for the quarter ended April 29. That includes outstanding loans, accounts payable, pensions and other debt.

The company flagged doubts about its ability to continue as a going concern last week and said it was exploring strategic options, including selling itself..

"The continued liquidity pressures facing the company, as well as legacy components of its business, are preventing it from making further progress and from restructuring its legacy assets and businesses," the company said in a statement.

It named Bank of Montreal as its financial adviser and the law firm Osler, Hoskin & Harcourt LLP as its legal adviser. It said FTI Consulting would serve as restructuring consultant.

($1 = 1.3249 Canadian dollars) (Writing by Jim Finkle; Reporting by Solarina Ho in Toronto. Additional reporting by Fergal Smith in Toronto, Jessica DiNapoli in New York, Richa Naidu in Chicago, and Siddharth Cavale and Yashaswini Swamynathan in Bengaluru; Editing by Denny Thomas and Dan Grebler)