Sears Canada shares fall on poor holiday sales
Sears Canada shares fell Tuesday, a day after its U.S. parent said same store sales at the Canadian retailer fell 5.8 per cent in the nine weeks to December 29.
It shares were trading at $9.77, down 24 cents, or 2.4 per cent, on the Toronto Stock Exchange in early afternoon trading.
The period included the crucial holiday season, when retailers can make up to 40 per cent of annual revenue.
The parent, Sears Holdings, also announced that its chairman and hedge fund billionaire Edward Lampert will take over the role of CEO.
Late Monday, the U.S. retailer predicted Sears Canada's fourth-quarter adjusted earnings, expected to be released February 28, will fall to about $97 million US, or by about half compared with the same period in 2011.
The Canadian subsidiary’s sales were hurt by weaker sales of electronics and "unseasonably warm temperatures in parts of Canada," the parent said.
The Canadian operation – which also sells under the Kmart banner — must turn itself around before the arrival of American discount retailer Target Corp's arrival here this spring, an event expected to greatly increase retail competition.
Lampert succeeds Louis D'Ambrosio, who is leaving February because of family health matters. D'Ambrosio was named CEO in 2011.
Sears Holdings, which has a 51 per cent stake in Sears Canada, after reducing its position from about 95 per cent in November, faces a long, uphill battle of its own.
Lampert has been known as a hands-on chairman at the operator of Sears and Kmart. The change formalizes that role at a time when the retailer is struggling with sales declines and losses.
"At the end of the day, there is only one person who makes the big decisions … and that person is Mr. Lampert," said Gary Balter, an analyst at Credit Suisse, in a report.
"Giving him an additional title does not change that reality, and in our opinion, does not change the direction of the company."
Lampert has a tough road ahead. He engineered the combination of Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy.
The company has posted six straight years of declines in revenue at stores opened at least a year. It operates more than 2,600 stores in Canada and the U.S.
