UPDATE 1-Sears Canada to slash 800 jobs in services units, head office

Tue Nov 26, 2013 5:31pm EST

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By Solarina Ho

TORONTO Nov 26 (Reuters) - Sears Canada Inc is laying off nearly 800 employees as it overhauls its repair services and parts businesses and makes further staffing cuts at its head office, the department store chain said on Tuesday.

News of the layoffs broke shortly before markets closed, sending shares up 4 percent to close at C$18.98.

Sears Canada, 51 percent-owned by Sears Holdings Corp , said 712 jobs will be cut from its services divisions and an additional 79 eliminated at the head office. The company has more than 25,000 associates, according to the Sears Canada website.

The department store, which reported a wider quarterly loss last week but its first rise in quarterly same-store sales since 2008, operates 181 corporate stores and 241 hometown dealer stores.

The company has lost significant market share amid an increasingly competitive Canadian retail environment, particularly as big-box U.S. retailers and discount department stores enter and expand in the country.

Sears Canada said it will begin using contracted technicians for repair services in mid-markets instead of Sears technicians and that service teams in major markets would be streamlined.

Warranty repair for appliances is also shifting to the supplier, in line with industry standard, it said.

The company's parts division, which consisted of a central processing center and 16 stand-alone locations, will be consolidated into three major centers in Calgary, Toronto and Montreal.

Since Doug Campbell took over as chief executive officer from Calvin McDonald in September, the company has also said it is selling its stake or ending leases on a number of properties, including its flagship downtown Toronto store. Those deals total more than C$700 million.

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