Sears Canada embraces middle-class ‘reality’

CEO says luxury’s not the answer as retailer tries for turnaround

— The future of Sears Canada rests in the hands of middle-class shoppers, says the president and chief executive of the retailer, which has been cutting staff and stores to improve its financial performance.

Doug Campbell, who was in Calgary Monday to visit Sears employees, said that the company has been around for 61 years on the Canadian retail landscape and he intends to keep it going at least another 60 years.

“I’ve been talking in Toronto about how there’s a fascination lately with luxury retail. The Nordstrom coming in. The Saks Fifth Avenue. Everyone is taking their product offering and moving it towards luxury,” said Campbell. “The reality is that most Canadians are not luxury retail customers. The reality is most Canadians are middle-class, middle-income, suburban families.”

He said the company is on a journey of continuous improvement and although further reductions are not “imminent,” it will continue to drive efficiency in the business.

In late January, Sears Canada announced it would eliminate 624 jobs. Most of the reductions will be in middle management at Sears department stores, affecting an average of five employees per location, the company said.

It also said it will rework its regional and head office structure to reflect the latest changes and to align it with the smaller business.

Two weeks earlier, Sears said about 1,600 positions would be affected as it moved ahead with plans to shutter its three Canadian call centres and reduce staff at its warehouses.

The company is trying to reduce costs and improve its overall business as part of a three-year turnaround plan. Last year, it made a similar round of cuts that lowered its overall employee count to about 20,000 people.

Sears Canada has made an effort to shrink its operations by selling off leases for some of its most prominent locations.

T he retailer operates 181 corporate stores, 241 Hometown appliance stores, more than 1,400 merchandise pickup locations and 101 travel offices.

Many remain unconvinced of its outlook.

“The Sears brand in Canada related to the department store format is in a period of steep decline and is likely not to recover,” said Alberta-based retail specialist Michael Kehoe with Fairfield Commercial Real Estate Inc.