Sears Canada posts larger loss
Michael J. Knell -- Furniture Today, October 1, 2012
TORONTO - Despite upticks in its major appliance and mattress business, Sears Canada said its second quarter losses widened as sales continued to fall.
For the 13 weeks that ended July 28, the retailer reported revenue of C$1.05 billion, a decrease of 8.5% from the comparable 2011 period. Same-store sales fell 7.1%.
The net loss was C$9.8 million or 10 cents per share, compared with a loss of C$200,000 or zero cents per share a year earlier.
Revenues for the 26-week period ended July 28 were C$1.97 billion, down 8.2% from a year ago as same-store sales declined 6.7%.
However, the company posted net earnings in this year's first half were stronger, at C$83.2 million or 81 cents per share, reversing a net loss in the 2011 period C$47.2 million or 45 cents per share.
Earnings for the year-to date were driven by a pretax gain of C$164.3 million, resulting from the early surrender of leases on three downtown store properties - in the Vancouver Pacific Centre, the Calgary Chinook Centre and the Ottawa Rideau Centre - back to their owner, Cadillac Fairview Corp.
"While we are not pleased with our quarterly sales results, we continued to implement key transformation initiatives," Calvin McDonald, Sears Canada president and CEO, said in a statement.
He said the results from the four Ontario stores that were reopened after refurbishing were encouraging and said the company is exploring other possible locations for a similar treatment. Sears also saw sales upticks of regularly priced merchandise in the Monday to Friday periods, which McDonald attributed to the new pricing strategy rolled out in February.
"We had sales increases in major appliances and mattresses, two core hero categories which we have identified as key to our success," he added. "In fact, sales following the opening of our new Sears Home location in Ottawa, the largest Sears Home store in the country, exceeded our expectations and the Sears Home format experienced year-over-year sales increases."
Earlier this year, Sears Holdings - which owns 92% of Sears Canada - announced it would divest itself of almost half of its interest in the multi-channel retailer, although no new investor has been announced.
At the end of the quarter, the company operated a network of 197 corporate stores, 276 hometown dealer stores, 20 home services showrooms, over 1,500 catalog and online merchandise pickup locations as well as 104 Sears Travel offices and a nationwide home maintenance, repair, and installation network. It also publishes a general merchandise catalog and sells online.
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