Sears Canada Inc. says it expects to grow sales by 4 to 5 percent this year and leverage its recent purchase of Canada's largest furniture and appliance wholesaler to jump-start its new off-mall strategy.
The sales target appears aggressive, even though it's in line with market expectations for the retail sector, after 3 years of steady declines at Canada's second-largest department store operator.
But Brent Hollister, who replaced Mark Cohen as Sears' chief executive officer in August, said the company has the right leadership team in place now and the right strategy to reverse that trend.
"We haven't been able to say that for a couple of years," he said in a telephone interview.
The company had higher profit on weaker sales in its latest quarter, but sales for the year held firm at $6.2 billion.
Last month's announced purchase of Cantrex Inc., a deal which will close in March, is a big part of Sears' growth strategy, Mr. Hollister said, adding that the market has underestimated its value.
Acquiring the wholesaler, with 1,300 affiliated retailers in furniture, appliances, and electronics, will kick-start Sears' off-mall strategy, Mr. Hollister said. The dealers, which currently operate as Mattress World, Furniture Plus and others, could soon be accepting Sears' cards, Sears' Kenmore appliance brands, and even its store name, he added.
For the latest quarter, which included Christmas, the company said sales slid 6.1 percent to $1.9 billion, partly because the period was 1 week shorter than last year.
On a comparable basis, sales were flat year over year, the company said.
Net earnings rose 3 per cent to $99.9 million, boosted partly by the sale of the company's 52 auto centers, higher sales of credit card receivables and lower taxes. The auto centers fetched a net gain of $500,000. Excluding non-comparable items, earnings fell 9 percent. Same store sales fell 1.7 percent. (Toronto Star)
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