A broad slate of initiatives unveiled by Sears Canada are intended to transition the company from a business stabilization phase in 2015 to a re-engineering phase designed to restore growth.
Sears Canada operates a network of 159 corporate stores, 125 Hometown stores, more than 1,200 catalog and online merchandise pick-up locations, 84 Sears Travel offices and a nationwide repair and service network. Revenues from the enterprise declined 8.7 percent to $887.6 million due to some store closures and a 1.6 percent decline in same store sales, much better than the 9.1 percent comp decline in the fourth quarter the prior year. The company reported an operating loss adjusted to exclude non-recurring gains and expenses of $1.2 million compared to a prior year loss of $28.8 million.
Full year sales of $3.145 billion reflected a comp decline of 2.3 percent, a less severe drop than the prior year decrease of 8.3 percent.
During 2015, Sears Canada said it focused on the three key business stabilization initiatives of increasing revenue, operating profitably and maintaining a strong balance sheet. For example, Sears store in Canada are rolling out a concept called “shop-in-shops,” essentially branded departments within the store. During the fourth quarter, 51 additional shop-in-shops were installed, bringing the total shop-in-shops completed in 2015 to 191 shops from national brands, plus another 25 shop-in-shops supporting Sears Canada’s private brands.
Want to publish your own articles on DistilINFO Publications?
Send us an email, we will get in touch with you.
The merchandising effort is yielding results with the top performing brands boosting sales per square foot as much as 36 percent with a 19 percent improvement in gross margins and 92 percent better inventory turns, when compared to the overall merchandise category averages across the company.
In the media planning and marketing area, Sear Canada said it employed a more data driven approach during the holidays and given its success the approach will be expanded this year.
The retailer also began a new in-store merchandising initiative called “Pinball,” which focuses on setting stronger merchandise presentation standards. Pinball was implemented in selected areas of women’s apparel in a handful of test stores and drove an increase in excess of 10 percent compared to a control group of stores.
During 2016, Sears Canada said plans to undertake a complete re-engineering of its business. Among other potential areas, the re-engineering will include:
• Integration of the more data-driven media planning and marketing strategies to the full-year marketing programs.
• Restructured assortment architecture with more focus on the integrity of Sears Canada’s price to value design, and simplified choices.
• Shift in the balance of sale in a large group of stores to be more relevant to a broader segment of the Canadian population, with a subset of these stores iterating forward to pilot a Sears Canada 2.0 concept that will highlight the new assortment architecture as well as innovative real estate development ideas
• Execution of a new store operations playbook focused on the execution of operating tactics to drive four key performance indicators of sales per square foot, margins, labor costs, and inventory turns.
• Conversion programs to drive Home Store customers to full-line stores, and catalog customers online.
• Re-engineering of Sears Canada’s catalog to include a focus on key items, upgraded paper, modernized photography, and layouts that will follow merchandise presentation standards similar to “Pinball”.
• The enabling of financing capabilities for Sears Canada customers purchasing large ticket items, through a new agreement with easyfinancial Services Inc.
Date: March 18, 2016