September 24, 2013 / 11:49 AM / in 4 years

Sears Canada CEO resigns as company works on turnaround

(Reuters) - Sears Canada Inc’s SCC.TO Chief Executive Calvin McDonald has resigned just as the department store chain restructures amid intensifying competition from U.S. retailers such as Target Corp (TGT.N) and Wal-Mart Stores Inc (WMT.N).

People walk past the main Sears store in downtown Vancouver, British Columbia February 23, 2011. Retailer Sears Canada Inc posted a 28 percent drop in its quarterly profit, hurt in part by lower demand for appliances. REUTERS/Andy Clark

Chief Operating Officer Douglas Campbell has been promoted as CEO with immediate effect, Sears said, adding McDonald is joining an international company it did not identify.

The Globe and Mail newspaper, citing sources familiar with the situation, said the departure was sparked over differing views with U.S. parent Sears Holdings, controlled by investor Edward Lampert.

The disagreement was tied to “the pace at which capital was being deployed to keep the momentum of the transformation going,” the newspaper quoted the source as saying.

Sears Canada, 51 percent-owned by Sears Holdings Corp (SHLD.O), announced a three-year plan in 2012 to reclaim lost market share that included making radical changes to its pricing strategies and sprucing up stores.

The company posted its 18th quarterly fall in revenue in the second quarter.

Sears Canada also closed two high-profile stores in the Toronto area and sold back the leases earlier this year.

McDonald told Reuters in January that he was not entirely happy with the company’s progress in the 19 months since he took the top job.

Campbell joined Sears Canada in March 2011 from Boston Consulting Group, where he led turnaround projects, and was named COO last November.

Shares of Sears Canada, which has a network of 181 corporate stores, closed at C$12.41 on the Toronto Stock Exchange on Monday.

Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Sreejiraj Eluvangal and Sriraj Kalluvila

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