Shares of Sears Canada (TSX:SCC) were trading at $2.29 on the morning of December 9, representing a drop of just over 2.5%, after the company announced a net loss of $120 million in 2016’s third quarter.
In the same period last year, the company recorded a loss of $53 million.
Total merchandise sales revenue was down almost 15% at $625.2 million. Same-store sales fell 7.1%, which the company said relates to the fact it offered 0% customer financing in Q3 2015 with no comparable deal this year.
The retail chain has been struggling for the past few years; it began closing stores and laying off workers in 2013, with Sears’ Richmond Centre location being one of the first casualties.
Sears has been slow to adapt to changing customer preferences. The company says it is now shifting some of its focus to digital commerce; in November it launched a new online sales platform called Initium.
In addition to this shift, Sears says it is working to convert some of its stores to a new “concept” called Sears 2.0. These stores will have different layouts, in-store designs and inventory compared with the chain’s traditional stores. Two stores have been converted to Sears 2.0 locations, and two more are planned for Q4. Sears says they are smaller but have higher sales-per-square-foot compared with older stores.
Sears Canada executive chairman Brandon Stranzl said the company is reinventing itself with the Sears 2.0 concept.
“Based on early indicators such as an increase in sales per selling square foot, these stores are more productive and operationally efficient than our previous format,” Stranzl said.
“The new e-commerce platform advances Sears Canada’s technology and allows the company to be more agile in making improvements to our only shopping experience.”
Stranzl said the company is now in a process of “constant innovation.”
“We have adopted new principles of culture that are being embedded throughout the organization, and we are thinking and acting differently than a year ago.”
Sears Canada currently has 140 corporate stores, 71 Hometown locations and more than 900 catalogue and online pickup locations.
@EmmaHampelBIV
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