Sears Canada Inc. says it’s faring better than it has in recent years, posting a narrower financial loss in first three months of its fiscal year. But, the struggling department store continues to lose money, saying Wednesday it lost $59.1-million as sales sagged further.
Total sales dropped 9.7 per cent compared to the same three-month stretch last year as a result of Sears closing additional stores. Sales from stores that remain open dropped 4.3 per cent, the slowest pace of decline in a year, the retailer said.
“We began to see signs that our business was performing better,” Ron Boire, chief executive, said in a statement. “Still we know how much work lies ahead of us.”
Retail experts suggest Sears stands to benefit from the closure of Target Canada, but it’s unlikely the retailer expands its footprint into former locations. Instead, Sears has been steadily shrinking its physical network while developing its online e-commerce presence.
Digital focus
A BMO Capital Markets report this month said Sears Canada is one the biggest e-commerce players in the country, with $505 million in sales last year — more than Walmart and others who have begun pushing aggressively into online sales, such as Canadian Tire.
“We are proceeding with our plans to transform the company,” Boire said, a “balanced” process that aims to improve sales from stores but one which “primarily” consists of fostering growth in digital sales made through the Internet and on smartphones and tablets, he said.
Sears’ physical footprint in Canada is still vast, though the number of core retailing locations is shrinking. The company says it currently has 167 corporate stores, 197 Hometown stores, over 1,300 catalogue and online merchandise pick-up locations, 85 Sears Travel offices and a nationwide repair and service network.
In March, the retailer sold three department store properties in a lease-back agreement with Concord Pacific, a developer. The three locations were in Burnaby and Chilliwack, B.C. and Calgary.
“The transaction is important for Sears Canada as it increases its cash balance, which in turn extends the number of years it can continue to operate while generating losses,” Keith Howlett, analyst at Desjardins Securities, said.
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