Sears Canada revenue falls yet again

Wed Aug 21, 2013 8:59am EDT

People walk past the main Sears store in downtown Vancouver, British Columbia February 23, 2011. REUTERS/Andy Clark

People walk past the main Sears store in downtown Vancouver, British Columbia February 23, 2011.

Credit: Reuters/Andy Clark

(Reuters) - Department store chain Sears Canada Inc's (SCC.TO) revenue declined for the 18th quarter in a row as the company struggles with weak demand and increasing competition from U.S. retailers.

Sears Canada, to compete with companies such as Target Corp (TGT.N) and Wal-Mart Stores Inc (WMT.N), announced a three-year plan in 2012 that included making radical changes to its pricing strategies and sprucing up stores.

"This period marks the half-way point of our three-year transformation plan, and although we have much work to do, we are starting to see progress ..." Chief Executive Calvin McDonald said in a statement.

The company said it would cut 245 jobs as it outsources some of its information technology and accounting jobs.

The company, which has about 29,000 associates, said the job cuts and the outsourcing move would result in C$11-$15 million in transformation costs.

Sears Canada, 51 percent-owned by U.S. department store chain Sears Holdings Corp (SHLD.O), said its home and hardlines businesses have struggled due to the weak growth housing market.

The housing market slowed dramatically in response to tighter rules, and some economists have said that the U.S. housing crash of the last decade would be repeated in Canada.

The company's home and hardlines unit, which includes home furnishings, mattresses and home electronics, accounted for more than a fourth of its total revenue of C$960.1 million in the quarter.

Total revenue fell 10 percent, while sales at established stores, a key measure for retailers, fell 2.5 percent.

Total expenses fell by 10 percent in the second quarter.

The company posted a net profit of C$152.8 million ($147.1 million), or C$1.50 per share, compared with a net loss of C$9.8 million, or 10 Canadian cents per share, a year earlier.

Excluding an after-tax gain of $164 million, it posted a loss of 11 Canadian cents per share.

Sears Canada sells baby goods, appliances such as coffee makers, blenders, microwaves, as well as apparel and accessories. Its private brands in apparels include Jessica and Attitude.

Shares of the company closed at C$12.27 on Tuesday on the Toronto Stock Exchange.

(Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Saumyadeb Chakrabarty)