It’s an iconic brand, one that has been in Canada in one form or another for some 65 years.
And that, says analysts, is part of the problem for a struggling Sears Canada.
“Young people think it’s a store for their parents,” says Barry Nabatian, a retail analyst with Shore-Tanner and Associates in Ottawa. “And the parents are getting older. They don’t need as much clothing.”
“It’s a little long in the tooth,” agrees shopper Carol Bell outside the Sears store at Ottawa’s St. Laurent Shopping Centre. “There are very few things I actually buy there, but I like to go and visit. It reminds me of the past when I used to shop with my mother.”
It’s a perception Sears Canada has been trying to change with a major rebranding effort. The Canadian retailer has also been working on a new website.
But it might be too little too late. In a financial statement released Tuesday, the company announced it lost almost $144-million in the first three months of 2017. It is the latest of a string of losses over the past several years, raising “significant doubt” over the company’s future, and causing the board of directors to contemplate “financial restructuring or sale of the company.”
Barry Nabatian says in addition to Sears Canada’s image problem, it has also fallen victim to the changing retail landscape. He says two opposite segments of the retail market are faring well, lower-end bargain stores, and higher-end luxury stores. Sears is perceived as being somewhere in the middle, both in terms of price and quality. That, he says, is a part of the market that has been performing poorly over the past decade or so.
This appears to be bitter-sweet timing for Sears Canada. The company said it has actually managed to increase its in-store sales by 2.9% year over year, a sign that rebranding efforts could be working. But it also said it presently doesn’t have the cash flow to meet its obligations over the next 12 months.
Unless they find that money somewhere, the iconic company could be looking at the end of its financial limits.
