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Sears Canada halves loss, but CEO says turnaround moving too slow

The second floor entrance to the Sears store at Upper Canada Mall in Newmarket, Ont.

Peter Power/Peter Power/The Globe and Mail

Sears Canada Inc. halved its losses in the third quarter, though the chief executive officer of the struggling department store chain said Tuesday that the pace of his turnaround plan has been too slow.

The Toronto-based company posted a net loss of $21.9-million, or 22 cents per share, for the three months ended Oct. 29.

That's an improvement from the year-earlier loss of $44.1-million or 42 cents per share.

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"We continue to make progress in our transformation strategy and are seeing positive signs of success," said president and CEO Calvin McDonald in a release.

"Our plan is working, however our pace of execution has not met our expectations."

While the third-quarter results are better than a year ago, that comparable period included a $45.6-million pretax charge related to clearing excess inventory and internal restructuring at the national department store operation.

Sears says its revenue was $1.03-billion, down about $76-million from a year earlier, which McDonald attributed partly to fewer promotional and clearance sales of apparel.

The company was also had lower prewinter sales of snowblowers and reduced sales of televisions.

In terms of improvements, the company said it saw better sales of its mattresses and appliances, as well as its relaunched offering of toys and clothing for babies.

Sears Canada has been pushing ahead with a revamp of its operations to encourage more customers to return to its stores after years of declining sales, and also to prepare for the entry of numerous U.S. retailers, including discount chain Target.

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Over the past year, the company has cut jobs, slashed prices and decluttered its stores, as well as closed some underperforming locations in major cities.

In May, Sears Canada's parent company announced plans to dramatically reduce its holdings in the chain.

Sears Holdings Corp., which also owns the Sears, Kmart and Lands' End department store chains in the United States, reduced its holdings to 51 per cent by transferring 45.1 million shares to its stockholders.

Sears Canada has 196 corporate stores, 285 hometown dealer stores and more than 1,700 catalogue merchandise pick-up locations across Canada.

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