Sears Canada doubles loss on plunging sales

Same-store sales fall 7.1 per cent year-over-year

• Sears Canada Inc. more than doubled its net loss in the third quarter as the struggling department store retailer reported a steep 21- per- cent slide in sales.

The Toronto company reported losses of $ 120 million for the three-month period ended Oct. 29, or $ 1.18 per share, compared with a net loss of $ 53.2 million ( 52 cents) in the third quarter last year as it failed to recoup business lost after the termination of its credit card agreement last year.

“We are now in a process of constant innovation to deliver better products and experiences to customers, and thereby drive better business results over time,” said Brandon Stranzl, executive chairman. “We have much work to do and are fully committed to driving necessary change.” Sears Canada recently launched a digital commerce lab, Initium and a new technology platform to power Sears.ca’s website and logistics systems, which cost $2.7 million in the quarter.

The news sent Sears Canada’s shares down three per cent to $ 2.26 in morning trading Friday, before closing at $ 2.30. The stock is down a staggering 75 per cent from a year ago.

Revenue fell to $ 625.2 million from $ 792.1 million a year ago as the company exited stores and shrank its legacy catalogue business. It also saw a drop in fee revenue after a 10- year agreement with JPMorgan Chase & Co. expired last year.

Same- store sales, an important measure of retail health, fell 7.1 per cent yearover-year and by almost nine per cent in its “core” retail categories such as apparel, accessories, and appliances.

Sears attributed the drop to ending a number of zeroper-cent consumer financing offers that were available last year on the Sears credit card and a decrease in overall transactions compared with a year ago when consumers redeemed their loyalty points in anticipation of the pending credit card exit.

Sears Canada has been exiting unproductive stores and also raising cash from l ucrative sale- l easeback transactions with landlords for years. It announced two new deals Friday totalling $ 58 million, for a total of $ 152.2 million in proceeds from real estate transactions in the third and fourth quarter.

More recently, the retailer has taken to shrinking the square footage of its stores in a bid to become more productive within a smaller space. Sears converted two traditional stores in the third quarter to its new concept “2.0,” and will open two more in the fourth while it potentially subleases any leftover store space to outside retailers.

Sears announced Friday that it has signed letters of intent with two specialty supermarket operators to open new stores in the freedup space at “several” Sears 2.0 developments as it rolls out its smaller store model in 2017.

The retailer has also been paring back costs, with a goal to achieve $ 155 million in cost savings this fiscal year.

CONSTANT INNOVATION TO DELIVER BETTER PRODUCTS.