UPDATE 1-Sears Canada posts bigger loss, raises 2016 cost-cutting target

Wed Jun 8, 2016 8:45am EDT
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June 8 (Reuters) - Canadian department store operator Sears Canada Inc reported a bigger quarterly loss, and said it would cut more costs this year, as the company struggles with declining sales.

Hit by increasing competition from U.S. retail giants such as Wal-Mart Stores Inc, Sears Canada has been shutting stores and cutting jobs.

The company, whose largest shareholder is Sears Holdings Corp CEO Edward Lampert and his hedge fund, raised its 2016 cost reduction target to C$127-C$155 million ($100 million-$122 million) from the C$100 million-C$127 million it forecast in March.

Sears Canada said it cut about C$80 million in costs in the first quarter and said savings would be reinvested in growth initiatives.

Sears Canada said it would offer "a more logically designed merchandise assortment," to drive faster inventory turns, and higher sales per square foot.

The company, which agreed sell and lease back a distribution outlet in Calgary in March, said on Wednesday it has entered a similar agreement for another outlet in British Columbia.

The company's same-store sales declined 7.4 percent in the first quarter ended April 30.

The net loss in the quarter increased to C$63.6 million ($50.2 million), or 62 Canadian cents per share, from C$59.1 million, or 58 Canadian cents, a year earlier.

Revenue fell 14.5 percent to C$595.9 million. ($1 = 1.2681 Canadian dollars) (Reporting by Amrutha Gayathri in Bengaluru; Editing by Maju Samuel and Saumyadeb Chakrabarty)