Sears Canada CEO admits slow progress on turnaround
By Allison Martell
TORONTO (Reuters) - Sears Canada Inc (SCC.TO: Quote) will stick to its three-year turnaround plan, Chief Executive Calvin McDonald said on Friday although he conceded he was not entirely happy with the company's progress in the 19 months since he took the top job.
Last week, the department store chain's parent, Sears Holdings Corp (SHLD.O: Quote), said the performance of the Canadian unit would likely hold back its own fourth-quarter results.
"There are areas that I wish were further along in our transformation plan," McDonald said in an interview. "We still have a lot of work to do."
Sears Canada's sales at established stores, a key measure for retailers, fell at least 4 percent each year between 2008 and 2011, with the decline reaching 7.5 percent in 2011. There was no relief through McDonald's first full year as CEO - in the third quarter to October 27, 2012, same-store sales dropped 5.7 percent.
Sears Holdings trimmed its stake in the Canadian unit from about 95 percent to 51 percent in November, distributing the stock to its own shareholders. The parent company's top shareholder is Chairman Edward Lampert, also appointed CEO last week.
McDonald said he is not changing his plan for the Canadian company, which calls for boosting service and sprucing up some stores as well as refocusing on several "hero" categories where he believes Sears is strongest, like mattresses and major appliances.
He said there has been growth in major appliances, mattresses and baby goods. The baby section, revamped in June, achieved double-digit sales growth at established stores, and inventory is in better shape.
But apparel lagged until the fourth quarter, and home decor and Craftsman tools have been "challenges." Continued...