Struggling Sears Canada eyes online revamp with Toronto centre

Retailer aims for Warby Parker, Apple models — digital commerce first with stores attached

Sears Canada is planning a digital turnaround with a new innovation centre in downtown Toronto.

The centre on Peter St. has the job of making the company’s digital platform more flexible, fast and simple. The aim is to improve everything from how products are photographed to how Sears warehouses are automated.

Sears Canada executive chairman Brandon Stranzl said Friday online eyewear company Warby Parker and Apple Inc. are examples of savvy digital retailers with successful bricks-and-mortar stores.

“If you’re a historical retailer, you had stores and now you have stores with the website attached. We are going to invert that model — we’ll be a digital commerce company with stores at- tached,” he said.

Stranzl was at the company’s lab on Friday to discuss the company’s future as it released fourth-quarter earnings.

The company reported a $30.9-million profit, or 30 cents per share, for the quarter ended Jan. 30, mainly because of a $170.7-million gain from the termination of a credit card agreement with JPMorgan Chase Bank in November.

In the comparable period a year earlier, Sears Canada had a net loss of $123.6 million or $1.21 per share.

An aggressive cost reduction strategy found $125 million in annual savings.

The company ended the quarter with $313.9 million in cash on hand and plans to build that fund to $535 million by the end of 2016.

“The goal was to stabilize the company and have the resources to turn it around,” said Stranzl.

“We believe we have a path to profitability,” Stranzl said.

Stranzl said the cash has not been earmarked for any specific investment or dividends at this time.

The company also announced today that it will sell and lease back its Calgary distribution centre for about $84 million.

The innovation centre is headed by retail e-commerce veteran Matt Nelson, vice-president, omni-channel commerce, who worked for Hudson’s Bay Co. and Canada Goose before joining Sears.

Stranzl said the company has also put together a strong executive suite with expertise in inventory planning and in-store operations.

“We’ve started to rationalize what has historically been an inventory overbuy problem,” he said.

Sears Canada has been downsizing for years, closing stores and selling off properties.

Despite that, it continues to employ 17,000 people in Canada. With files from Star news services