Sears Canada posts loss as demand dips for home products
(Reuters) - Department store chain Sears Canada Inc (SCC.TO) posted a loss in the first quarter compared with a profit last year, as demand for its home products and major appliances fell.
Sears Canada, 51 percent owned by U.S.-based Sears Holdings Corp (SHLD.O), has been facing increasing competition as U.S. retailers such as Wal-Mart Stores Inc (WMT.N) expand their Canadian operations and new ones like Target Corp (TGT.N) enter the country.
Target opened its first Canadian stores in March and plans to have more than 100 by the end of this year.
Sears Canada, which operates 181 company-owned stores, reported a net loss of C$31.2 million ($30.3 million), or 31 Canadian cents per share, compared with a net profit of C$93.1 million, or 91 Canadian cents per share, a year earlier.
Last year's results included a pre-tax gain of C$164.3 million on lease terminations.
Factoring out these gains, the company said its results showed an overall improvement compared with the first quarter last year.
Revenue fell more than 6 percent to C$867.1 million. Sales at established stores, a key measure for retailers, fell 2.6 percent.
The company also said on Wednesday that interim Chief Financial Officer E.J. (Ephraim) Bird will take over the role on a permanent basis.
Bird was appointed interim CFO in March, two months after Sharon Driscoll resigned from the post.
Sears Canada announced a three-year plan in 2012 to compete with new entrants and reclaim lost market share. The plan included making radical changes to its pricing strategies and sprucing up stores.
The company laid off 700 workers earlier this year to "right-size" its operations.
Sears Canada said on Wednesday that sales at its major appliances business declined 6 percent, while revenue at its home and hardlines business fell 9 percent due to economic uncertainty and low consumer confidence.
The unusually cool spring in most parts of the country also had an adverse impact on sales of outdoor power equipment, patio and other seasonal lines, the company said.
($1 = 1.0300 Canadian dollars)
(Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Roshni Menon)
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