Sears Canada is looking at teaming up with other retailers to lure more customers to its stores.Ryan Remiorz/The Canadian Press
In his bid to rejuvenate struggling Sears Canada Inc., its new executive chairman is looking at teaming up with other retailers to lure more customers to its stores.
Brandon Stranzl said in an interview on Wednesday that he wants to partner with other merchants – new to Canada or existing ones – in his efforts to revive the department store retailer's fortunes.
He didn't say which retailers he has been talking to. In the United States, Sears Holdings Corp. has teamed up with British cheap-chic fashion powerhouse Primark to try to bolster sales in Sears's U.S. stores.
The partnering merchants here could be "retail concepts that might be complementary to us – that's something we've spent a lot of time on," Mr. Stranzl said after Sears's annual meeting.
Retailers increasingly join hands to try to attract more customers with a wider array of goods, feeling the pressure to compete amid rising low-cost and digital rivals in an Amazon.com world.
Department store retailers Hudson's Bay Co. of Toronto and Seattle-based Nordstrom Inc. have teamed up with affordable-fashion specialist Topshop of Britain (Nordstrom carries it in the United States and HBC in Canada), while U.S.-based J.C. Penney Co. Inc. has partnered with cosmetics giant Sephora.
Department store chain J.C. Penney, one of the pioneers in beauty-product collaborations, is opening 60 new Sephora stores-within-stores in the next couple of months in addition to the current 518.
Marvin Ellison, chief executive officer of J.C. Penney, pointed to Sephora as one of the retailer's top performers in its fourth quarter. "Sephora continues to be a point of differentiation, and we will continue to gain market share by organically growing sales in existing stores, and by adding new locations," he told analysts in February.
Hudson's Bay executives have said Topshop attracts a younger – and coveted – customer to HBC stores and those consumers often linger and purchase other goods rather than just Topshop items.
Mr. Stranzl said Sears's partnerships would be with companies with which it doesn't necessarily compete. For example, it could team up with a food retailer, a bank branch, a sporting-goods player or a cheap-chic "fast fashion" purveyor that caters to teens and twentysomethings, he said. "We are not in that business, but it's complementary to what we sell."
Mr. Stranzl said his attempt to team up with other retailers is one of a number of strategies he's working on to shore up sales.
He's also looking at launching new store formats, possibly specialty stores that could take the place of some of its current Sears stores or its outlet or home stores. Some of the plans could come to fruition by the fall, he said. At the same time, Sears is closing some of its home stores.
Mr. Stranzl is also focusing on building the company's e-commerce, selling non-core assets including real estate, and cutting costs further, he said.
He also said Sears needs to speed up the way it operates.
"Traditional corporations tend to operate at one speed," he said. "We need to operate at the speed a startup would operate at."
The urgency of a big tune-up is evident. In its 2015 fiscal year, Sears generated an operating loss of more than $160-million, he reminded the annual meeting. Sears's 2015 loss was $67.9-million on sales of $3.1-billion, while same-store sales – an important retail measure at outlets open a year or more – fell 2.3 per cent.
Despite a strong balance sheet helped by asset sales, "you can't operate a business losing money like that," Mr. Stranzl said.