Losses are piling up at iconic department store Sears Canada
WATCH: It’s no secret that Sears is not in great financial shape. Rather than try to avoid talking about its troubles, Sears Canada is taking a different approach, hiring Mike Myers to try and put a smile on the troubled brand. Mike Drolet explains why.
Sears Canada’s new boss has his work cut out for him.
The fortunes of the iconic department store continue to slide, with the Canadian chain saying Tuesday sales fell 15 per cent between August and the end of October compared to the same period a year earlier.
The network of 347 department stores, which has shrunk as Sears has vacated several high-profile locations in recent years, lost $118 million over the stretch.
The disappointing financial results come as the newly hired head of the company vowed this week that Sears is in Canada for the long haul.
“We aren’t going anywhere,” Ronald Boire, who was named acting chief executive of Sears Canada last month, said in a media report on Monday.
Sears Canada’s U.S. parent, Sears Holdings, moved in early October to reduce its position in the Canadian chain, selling off most of its stake to shareholders.
The move freed up cash for Sears to help fund a turnaround at its U.S. operations, which have suffered from similar forces working against it in Canada. That is, other retailers better positioned at the higher and lower end of the price spectrum who are taking advantage of shifts in income trends.
Sears’ rivals, including Target at the low end and Hudson’s Bay at the high end are also backed by fresher or reinvigorated brands that resonate more with younger shoppers, experts say.
Boire, who was installed following the departure of Douglas Campbell, said Sears’ brand still held sway with Canadian shoppers.
This month, the company is featuring new ads with Canadian celebrity comedian Mike Myers and brother Peter, a long-time Sears Canada employee.
The ads feature Myers following his brother through a busy office as the pair discuss the future of Sears. Myers’ brother tells him not to believe everything he reads in the news. He also notes Sears is getting “leaner too.”
Aside from better marketing, Boire is banking on a renewed e-commerce push to win back Canadian shoppers, he said.
On Tuesday, Sears said sales at stores open more than a year – key retail metric that shows the ongoing pace of purchases – declined 9.5 per cent.
Campbell quit in September, informing the company he was resigning to tend to family issues.
His departure was announced around the same time media reports surfaced suggesting Sears Canada was exploring a creditor protection filing, something the company vehemently denied.
“These reports are absolutely false,” Vincent Power, a spokesperson for the Canadian operations, said.
Suggestions that suppliers were growing reluctant to send inventory to the chain out of concern they might not get paid were also dismissed as wrong.
“We have great relationships with our suppliers,” Power said. “We have always been on time with suppliers, and we plan to continue as such.”
WATCH: Sears recruits Mike Myers and brother Peter, a career Sears employee, to tell consumers it is alive and well.