After seven quarters of declines, Sears Canada’s same-store sales increased 0.4% in 2015’s third quarter compared with the same quarter last year, the chain announced December 3.
Growth in same-store sales was driven by strong sales of major appliances, furniture and mattresses. Same-store sales in the company’s core retail network, which includes its 95 full stores and 43 Sears Home stores and excludes its outlets and Hometown stores, grew 2.7%.
Net loss for the quarter was $53.2 million ($0.52 per share), down from a loss of $118.7 million ($1.16 per share) in the same period last year. Overall, however, the company saw revenue decline 5.1% compared with Q3 2014, to $792.1 million, which was due in large part to store exits over the past year.
Sears Canada said it is pushing to increase revenue with the recent signing of 17 agreements for “vendor-branded shop-in-shops,” including Wayne Gretzky’s No. 99 Collection and a Debbie Travis décor and accessories line. As well, it plans to focus on redesigning its e-commerce platform over the next year.
The company also said it is working on a cost-reduction program that is intended to cut costs by $100-125 million annually.
"Our cost reduction program is underway and, as of the end of the third quarter, $67 million in annualized savings have been implemented versus 2014 levels," said executive chairman Brandon Stranzl.
"An additional $30 million to $40 million in annualized cost savings is planned for the fourth quarter of 2015."
In Q2 2015, the company had reported income of $24.6 million, saying it had reached a “turning point” and was back on track after several quarters of losses and store closures. However, this positive return was related to a one-time transaction after the sale and lease back of three properties in Western Canada, including the Metrotown store, that generated a $67.2 million pre-tax gain.
Since the end of Q3, the company has appointed a new president, Carrie Kirkman, who will also serve as chief merchant.
"Carrie's merchandising expertise will add to our focus on capital allocation, balance sheet management, and achieving acceptable levels of profitability, and together we will re-focus Sears Canada on its core business with a sustained emphasis on the customer experience across multiple channels, media, and brands - from in-store, to mobile, to online, to social media, and to iconic heritage brands like the Wish Book,” Stranzl said.
Kirkman’s appointment comes four months after the departure of CEO and president Ron Boire, which was the fourth time in as many years the chain had lost a CEO.
