Sears Canada posts loss as sales fall 15.6 percent

Wed Sep 7, 2016 7:52am EDT
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(Reuters) - Department store operator Sears Canada Inc SCC.TO SRSC.O reported a quarterly loss, compared with a year-earlier profit, hurt by a 15.6 percent fall in sales.

The company said same-store sales fell 5.5 percent as traffic for big-ticket items such as major appliances fell due to termination of a credit card agreement and lower-than-expected sales of new merchandise launched in spring.

Bank of Nova Scotia (BNS.TO: Quote) said in October it would buy JPMorgan & Chase Co's (JPM.N: Quote) Canadian credit card portfolio associated with Sears Canada.

Sears Canada, hit by increasing competition from U.S. retail giants such as Wal-Mart Stores Inc (WMT.N: Quote), has been shutting down stores and cutting jobs.

The company said it cut C$128 million in costs for the first half of this year and said it was planning cost cuts at the higher end of its previously announced C$127 million-C$155 million forecast.

Sears Canada posted a net loss of C$91.6 million ($71.32 million), or 90 Canadian cents per share, for the second quarter ended July 30, compared with a profit of C$13.5 million, or 13 Canadian cents per share, a year earlier.

The year-earlier quarter included a gain of C$67.2 million as a result of sale-and-leaseback transactions.

Revenue fell to C$648.5 million from C$768.8 million.

(Reporting by Anet Josline Pinto in Bengaluru; Editing by Shounak Dasgupta)

People walk past the main Sears store in downtown Vancouver, British Columbia February 23, 2011.  REUTERS/Andy Clark