UPDATE 1-Sears Canada looking to cut more costs as sales fall

Fri Mar 18, 2016 8:48am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

(Adds details)

March 18 (Reuters) - Canadian department store operator Sears Canada Inc agreed to sell and lease back a distribution outlet in Calgary, and said it would cut more costs this year, as the company struggles with declining sales.

Sears Canada said on Friday it planned to slash costs by an additional C$100 million-C$127 million ($98 million) in 2016, with most of the cuts planned within the first quarter.

The company, whose largest shareholder is Sears Holdings Corp CEO Edward Lampert and his hedge fund, has closed stores and cut jobs to battle rising competition from U.S. rivals such as Wal-Mart Stores Inc.

Sales at Sears Canada's core retail store network, which consists of 95 full-line department stores and 41 Sears Home stores, fell 0.8 percent in the fourth quarter ended Jan. 30, from a year earlier.

Revenue fell 8.7 percent to C$887.6 million.

The Toronto-based retailer said the sale-leaseback deal was for C$84 million.

Sears Canada swung to a quarterly profit, helped by a gain from the termination of a credit card agreement.

The company's net income was C$30.9 million, compared with a loss of C$123.6 million.

Sears Canada booked a gain of C$170.7 million from the sale of JPMorgan & Chase Co's Canadian credit card portfolio associated with the store operator.

Bank of Nova Scotia agreed in October to buy the portfolio, a month ahead of the expiry of the servicing agreement. ($1 = 1.30 Canadian dollars) ($1 = 1.2962 Canadian dollars) (Reporting by Amrutha Gayathri in Bengaluru; Editing by Saumyadeb Chakrabarty and Sriraj Kalluvila)