3 Min Read
TORONTO (Reuters) - Sears Canada Inc SCC.TO is stepping up spending on areas such as its website and profitable merchandise categories while looking to exit unprofitable product lines as part of its turnaround plan, the retailer's new acting chief executive said on Friday.
"We're going to make some of those tough decision about businesses in short order," Ron Boire told Reuters in an interview, adding that the company was in a very strong liquidity position, with no short- or long-term debt.
"We have all of the ... capital capability that we need to fund the transformation and operation of the business. We're very comfortable with that."
He declined to reveal which long-time product lines may be cut, but said details will be given at the shareholders meeting in April.
Sears Canada, which has seen its fourth CEO in three years, has been working on turning around operations, but posted another loss during the third quarter on declining sales.
The company, which terminated its leases in several prime locations in a C$400 million deal and has cut some 3,000 employees since late last year, has seen its market share erode for years.
Boire, who took the helm in October, would not disclose how Sears Canada has performed so far this holiday season, but noted products like some of its Alpinetek parkas have sold out.
He said he has spent the last two months focusing on the long-term future of the department store chain, which has positioned itself to target middle-income Canadians.
Boire, who acknowledged the company has not been good at marketing its strengths, said he wants the chain to build on the popularity of house brands like Kenmore and Craftsman.
Sears Canada is launching a new website in the new year and is working to integrate its inventory and logistics systems. Boire says the upfront costs of the changes are material, but the long-term savings should be significant.
Earlier this year, Sears Holdings Corp (SHLD.O) failed to sell its 51 percent stake in the Canadian operation and instead lowered its stake to about 12 percent through a rights offering.
In the United States, concerns about Sears Holdings' finances have rattled suppliers and forced insurers and banks to raise the cost of guaranteeing payment to vendors.
Boire said large insurance firm are evaluating Sears Canada as a stand-alone entity for the first time, but added that it would not have a material impact on its merchandise flow.
Editing by Jeffrey Hodgson and James Dalgleish