Analyst doubts Sears Canada can recover
TORONTO — Time is running out for struggling department store chain Sears Canada to improve its financial results and the chances of survival are slim, says one retail analyst.
Keith Howlett of Desjardins published a report Friday saying it’s “now or never” for the money-losing company to make headway on a turnaround that has dragged on for several years with little progress.
“The next seven quarters are ‘make it or break it’ for Sears Canada,” he wrote.
“Our current view is that an operating turnaround is improbable.”
Howlett’s prediction suggests the fate of the company will be determined some time around the 2016 holiday shopping season.
The company declined to comment.
The stark outlook comes after Sears Canada made dramatic reductions to its operations, laying off 2,200 employees last year — with the brunt of the cuts at outsourcing call centres — while thousands more were eliminated in 2013.
Howlett said Sears Canada still has the financial resources to operate but signs point to further trouble ahead.
He has a sell rating on the stock and maintains a target price of $8.50 a share.
Shares closed at $7.87, down seven per cent, on the TSX Friday.
Last month, Sears Canada Inc. posted a $59.1-million net loss for the first quarter as revenues dropped 9.7 per cent from the same period a year earlier.