The new head of Sears Canada likes the retail chain’s Hillside Centre location — he likes the store, its energy, feel and layout — but, as with any firm that has seen a steady loss of revenue, Ron Boire says changes are coming.
Named Sears Canada’s chief executive in October, Boire is on a whirlwind tour of B.C. Sears stores this week, taking stock of what the company has on the West Coast as it dives into a three-year plan to bring it back to profitability.
“You want to get out and touch the stores,” he said during a stop at the Hillside Sears.
“We’re trying to understand what we’re doing well and what were not doing well.”
What Sears has not being doing well in the last five years is pulling in revenue.
Last year, the company — which has 172 corporate stores, 201 Hometown stores, about 1,300 catalogue and online merchandise pickup locations, and 19,000 employees — posted a loss of $338 million with revenue of $3.4 billion.
Revenue has dropped steadily from $4.9 billion in 2010.
Previous chief executives have suggested the financial results reflect the trouble Sears has dealing with a changing retail environment and competitors such as U.S. retailer Target’s foray into the Canadian marketplace.
Within two years, Target opened and closed 133 stores across Canada that had been competing as discount retailers.
Boire suggests a number of factors have led to Sears’ predicament, including trying to match prices with retailers such as Target. “Certainly Target didn’t help us,” he said, noting Sears may have gotten away from its core strength.
“We are not going to be a house of brands that you would import from Europe. We are about good Canadian values and high quality products.”
And value, Boire argues, is at the heart of it. “I think if there was a misstep, it may have been trying to price too competitively and taking value out of our products,” he said.
The brand concept called Canada’s Best, which has been identified with its outerwear lines, is being introduced into each product category the company carries, he said.
“It’s introducing really high value, and to me value is quality over price,” he said.
“We are pushing ourselves to say is this the best product for the money in the category, and best doesn’t mean the most expensive or the cheapest.”
Boire’s new effort includes the addition of popular lines — Cherokee casual fashions and Liz Lange Maternity, which Target had been selling in Canada, and a deal with Wayne Gretzky for his men’s casual clothing.
There has been talk of getting out of the electronics business, reducing the tools-and-hardware division and increasing fitness and bed product lines.
“[Those] and other things we’re working on will change the feel of the stores,” Boire said.
Marketing expert Ingrid Kajzer Mitchell said Sears has its work cut out for it.
“It’s still in a very challenging position. I feel that consumers losing interest in the brand is very real,” said the Royal Roads University associate professor of marketing. “A lot of [the work needed] is about how to make people care about the brand again and the task is restoring pride in the brand.
“Maybe it’s time to reclaim the Canadianness of the brand.”
Beyond brands and products, Sears plans to spend significantly to change how it interacts with customers by improving its online presence, supply chain and order management.
“The whole world is changing dramatically with the rise of digital technology and the way consumers are shopping is changing. Everyone uses [smartphones] to shop almost as much as they use anything else,” Boire said, adding the most important investment will be to allow customers to interact with the company any way they like.
While the company has said it will cut expenses from operations in 2015, Boire said he likes the overall footprint the stores have in Canada, which sounds like there will be little change in the number of locations.
