Sears Canada seeking to cut up to $127 million in expenses this year, mostly by first quarter

Canadian mall operator Sears Canada Inc decided to sell and lease back a distribution outlet in Calgary, and said it would cut more costs this season, because the company struggles with declining sales.

Sears Canada said on Friday it planned to slash costs by an additional $100 million-$127 million in 2016, with many from the cuts planned inside the first quarter.

The company, whose largest shareholder is Sears Holdings Corp CEO Edward Lampert and his hedge fund, has closed stores and cut jobs to fight rising competition from U.S. rivals such as Wal-Mart Stores Inc.

Sales at Sears Canada’s core retail store network, which consists of 95 full-line department stores and 41 Sears Home stores, fell 0.8 per cent within the fourth quarter ended Jan. 30, from a year earlier.

Revenue fell 8.7 percent to $887.6 million.

The Toronto-based retailer said the sale-leaseback deal was for $84 million.

Sears Canada swung to a quarterly profit, helped by a gain from the termination of the charge card agreement.

The company’s net gain was $30.9 million, compared with a loss of $123.Six million.

Sears Canada booked a gain of $170.7 million from the sale of JPMorgan & Chase Co’s Canadian credit card portfolio linked to the store operator.

Bank of Quebec agreed in October to buy the portfolio, per month ahead of the expiry from the servicing agreement.

? Thomson Reuters 2016