MONTREAL - Home improvement retailer Rona Inc. plans to cut 200 full-time jobs across Canada and shrink its presence outside of Quebec as it seeks to rebuild a network that continues to underperform in the face of weak consumer demand.

The downsizing, which represents 15 per cent of its administrative positions, is part of the company's plan to focus on its core businesses and reduce other holdings.

"Our goal is to remain a full Canadian operation and even to accelerate this growth," acting CEO Dominique Boies said in an interview Thursday after unveiling details of Rona's strategic plan and fourth-quarter results.

"By freeing up capital, we will be able to reinvest in that business and gain additional scale."

The Quebec-based company lost $17.9 million, or 15 cents per share, for the period ended Dec. 30, compared to a loss of $153.6 million or $1.19 per share a year earlier. Revenues increased 2.2 per cent to $1.2 billion largely on an extra week of business in the quarter.

Adjusting for one-time items, Rona earned $6.6 million or five cents per share, down from $19.7 million or 15 cents per share a year ago.

Rona was expected to earn 14 cents per share in adjusted profits on $1.13 billion in revenues in the fourth quarter, according to a consensus estimate compiled by Thomson Reuters.

For the full year, it earned $8 million on $4.9 billion of sales. That compared to a loss of $86.4 million on $4.8 billion of sales in 2011. Adjusted profits decreased nearly 20 per cent to $70 million or 57 cents per share, from $86.9 million or 66 cents in 2011.

Boies appeared to repudiate the past actions of long-time CEO Robert Dutton, who led the company through years of growth through acquisitions that failed to deliver profits or return on capital.

He said the company's past restructuring efforts were "Band-Aid solutions" that didn't address the merchandising and pricing strategy that drive consumer demand.

"We've lost our edge in some cases with some of our dealers," said Boies.

Dealers account for 30 per cent of Rona's sales.

Boies said the company's restructuring will take about two years to complete, generate up to $45 million in additional pre-tax operating earnings and cost $25 million in costs.

However, consumers will begin to notice change this spring as prices fall on some key products and Rona begins to alter its offering, including private-label products.

The changes will see a reduction in poor selling products. For example, although it carries more than 40 circular saws, the top four sellers account for nearly 75 per cent of all sales.

Rona (TSX:RON) also said it's taking a hard look at either selling or reducing the size of its 30 big box retail stores outside Quebec that generate about $750 million of annual sales but together are losing money.

It is also considering disposing part of its commercial and professional division that has $450 million of annual sales, but says it has no interest in selling its Quebec operations.

"It's a core asset. It's an asset we want to keep and we want to reinvest in... it's not even a question," said Boies.

The company is currently Canada's largest home improvement retailer, with more locations across the country than Home Depot or Lowe's.

Investors have been unhappy with Rona's financial performance, especially since it turned down a takeover offer from U.S.-based rival Lowe's last year.

Derek Dley of Canacccord Genuity said Rona's results reflect the continuing weakness in the home renovation spending market and that he doesn't see too much new in its strategic changes.

"I think they are taking the correct action in looking to right-size their network across the board, but I still think they face a number of head winds heading into 2013... so I'm not convinced at this point this new reiteration of their strategic plan is really going to turn around things in the near term," he said.

Although Lowe's has said it wants to expand its presence in Canada, Dley said he's not sure the U.S. company will want to buy Rona's underperforming stores.

The U.S. company declined to say Thursday if it is interested in Rona's operations.

Meanwhile, Rona said same-store sales, a key measure of retail performance, increased by 2.9 per cent in the quarter, but by only 0.2 per cent excluding the extra week of business. The retail and commercial segment's same-store sales were up 2.4 per cent, but down 0.7 per cent excluding the week.

Sales of lumber and building materials were strong, but offset by cost inflation and more intense competition.

Rona's shares closed at $11.60 after falling 46 cents or 3.81 per cent Thursday on the Toronto Stock Exchange.

Loading Slideshow...
  • 11. Hewlett-Packard

    <strong>Biggest layoff:</strong> 24,600 <strong>Date of layoff:</strong> September 2008 One of the reasons former HP CEO Mark Hurd was widely admired on Wall Street was the ease with which he cut costs -- and headcount. Hurd's largest cut came after he bought IT consulting firm EDS, which Ross Perot founded. Hurd spent $13.9 billion to diversity beyond HP's core hardware operations. Once he closed the transaction, he fired 24,600 employees whom he felt would be redundant once the two companies were combined. <a href="http://247wallst.com/2011/12/07/the-biggest-corporate-layoffs-of-all-time/#ixzz1frktWIL7" target="_hplink">Read more at 24/7 Wall St. </a>

  • 10. Daimler Chrysler

    <strong>Biggest layoff:</strong> 26,000 <strong>Date of layoff:</strong> January 2001 Daimler Chrysler's U.S. operations, known as Chrysler before the two car companies merged, is an example of a large corporation hurt by the 2001 recession. Chrysler said it would chop as many as 15,000 production workers and layoff several thousand management people as well. The company also said it would shutter six of its 41 plants. After nearly a decade, the merger eventually fell apart and Chrysler became independent again in 2007. But that was just in time for the next recession, which drove Chrysler into Chapter 11. <a href="http://247wallst.com/2011/12/07/the-biggest-corporate-layoffs-of-all-time/#ixzz1frktWIL7" target="_hplink">Read more at 24/7 Wall St. </a>

  • 9. U.S. Postal Service

    <strong>Biggest layoff:</strong> 30,000 <strong>Date of layoff:</strong> March 2010 The U.S. Postal Service recently announced it was on the brink of insolvency. The Postmaster General wants to save $2.1 billion a year, which means 28,000 jobs will be cut by 2012. This would not be the first time the USPS has downsized to offset the drop in mail as individuals and industry move to email and overnight carriers. It has been less than two years since the USPS shed 30,000 jobs for the third time for a total of 90,000. These reductions in workforce also aimed to save money and lower losses. <a href="http://247wallst.com/2011/12/07/the-biggest-corporate-layoffs-of-all-time/#ixzz1frktWIL7" target="_hplink">Read more at 24/7 Wall St. </a>

  • 8. Bank of America/Merrill Lynch

    <strong>Biggest layoff:</strong> 30,000 <strong>Date of layoff:</strong> September 2001 Under tremendous pressure from shareholders to cut large losses, particularly in its mortgage business, new Bank of America CEO Brian Moynihan laid off 30,000 people. He said it would help the bank, which had grown due to M&A activity, cut redundant jobs. Bank of America also said it would exit some of its unprofitable businesses. The financial firm's headcount was 288,000 before that action. Management hinted there would be more firings in the future. Merril Lynch went on to lay off 25,000 positions in December 2008. <a href="http://247wallst.com/2011/12/07/the-biggest-corporate-layoffs-of-all-time/#ixzz1frktWIL7" target="_hplink">Read more at 24/7 Wall St. </a>

  • 7. Boeing

    <strong>Biggest layoff:</strong> 31,000 <strong>Date of layoff:</strong> September 2001 Boeing was another victim of the 2001 economic slowdown. The recession, and later the 9/11 attacks, hurt air travel. The commercial aircraft division of Boeing, therefore, suffered all the cuts, with the defense segment untouched. The head of the commercial division then was Ford's current CEO Alan Mulally. When he announced the cuts he said, "We were on a very positive track and this is just a sad thing for all of us." Boeing had previously had another one of the biggest layoffs. In December 1998 Boeing fired 28,000 workers. <a href="http://247wallst.com/2011/12/07/the-biggest-corporate-layoffs-of-all-time/#ixzz1frktWIL7" target="_hplink">Read more at 24/7 Wall St. </a>

  • 6. Ford

    <strong>Biggest layoff:</strong> 35,000 <strong>Date of layoff:</strong> January 2002 Ford began to lay off workers long before the 2007 - 2008 recession put a serious dent in its revenue. In January 2002, when the economy was still in the contraction that began in 2001, the large cuts at Ford were part of the seemingly endless parade of layoffs at other huge American companies, including United Airlines and Target. Only last year, Ford has only begun to add workers again, after the U.S. car industry has had its first good season in the past five. Ford laid off another 23,200 people in January 2006. <a href="http://247wallst.com/2011/12/07/the-biggest-corporate-layoffs-of-all-time/#ixzz1frktWIL7" target="_hplink">Read more at 24/7 Wall St. </a>

  • 5. AT&T

    <strong>Biggest layoff:</strong> 40,000 <strong>Date of layoff:</strong> January 1996 When AT&T laid off 40,000 workers at the start of 1996, CEO Robert Allen said, at the time, the move would create more shareholder value. The job cuts were part of a plan to spin out AT&T's NCR and Lucent divisions. Allen then said, "I am convinced that some downsizing was necessary to protect the jobs of the 270,000 people who will make up the three new companies." AT&T's share price did rise 10% after the decision. AT&T continues to make job cuts today, as its landline business loses ground to cellular and VoIP products. <a href="http://247wallst.com/2011/12/07/the-biggest-corporate-layoffs-of-all-time/#ixzz1frktWIL7" target="_hplink">Read more at 24/7 Wall St. </a>

  • 4. General Motors

    <strong>Biggest layoff:</strong> 47,000 <strong>Date of layoff:</strong> February 2009 GM's layoffs in early 2009 were part of an effort to cut costs enough to match the drop in revenue. At the time, car sales were dragged down by the 2007 io 2008 recession and stiff competition from Japanese manufacturers. GM made the reductions as it was about to enter Chapter 11 with federal government aid. The number one U.S. car company also dumped its money-losing Hummer division. GM's employee base before the cuts was 250,000. GM made a number of smaller layoffs throughout 2009, including the elimination of several thousand management jobs. The company also laid off 25,000 workers in June 2005, a number that ranks separately in the largest layoffs ever. <a href="http://247wallst.com/2011/12/07/the-biggest-corporate-layoffs-of-all-time/#ixzz1frktWIL7" target="_hplink">Read more at 24/7 Wall St. </a>

  • 3. Citigroup

    <strong>Biggest layoff:</strong> 50,000 <strong>Date of layoff:</strong> November 2008 Citigroup's layoffs were part of a companywide effort by management to save the financial firm after the collapse of the credit markets in 2008. Citi had taken $20 billion in TARP funds to tide it through the worst of the period. But the company that Sandy Weill built, which combined insurance, corporate banking, investment banking, consumer banking and a brokerage arm, was too unwieldy and expensive to manage. New CEO Vikram Pandit and the board decided the only way to quickly stem billion of dollars in losses was to trim a large portion of the company's 352,000 workers. <a href="http://247wallst.com/2011/12/07/the-biggest-corporate-layoffs-of-all-time/#ixzz1frktWIL7" target="_hplink">Read more at 24/7 Wall St. </a>

  • 2. Sears/K-Mart

    <strong>Biggest layoff:</strong> 50,000 <strong>Date of layoff:</strong> January 1993 Sears and Kmart went through a series of job cuts each before they merged in 2005, and long before the retail company's current severe trouble. At the time of the merger, the expected savings from the marriage were $500 million a year. The largest of the pre-merger layoffs came in early 1993 and hit 50,000 workers at Sears. Back then, Sears faltered because of competition from Walmart. Kmart fired 35,000 people in 2003 as it was about to enter bankruptcy. That followed another massive firing of 22,000 people in 2002 as Kmart management tried to salvage the company. <a href="http://247wallst.com/2011/12/07/the-biggest-corporate-layoffs-of-all-time/#ixzz1frktWIL7" target="_hplink">Read more at 24/7 Wall St. </a>

  • 1. IBM

    <strong>Biggest layoff:</strong> 60,000 <strong>Date of layoff:</strong> July 1993 When Louis V. Gerstner Jr., viewed by many as one of the great CEOs of the second half of the 20th Century, joined IBM in 1993, the company was in deep trouble. The technology firm took an $8.9 million charge to slash 60,000 workers. IBM's revenue was dropping at the time. Revenue for the second quarter of 1993 was $15.5 billion, down from $16.2 billion in the same quarter the year before. IBM already had cut workers in the late 1980s. The company had 405,000 workers in 1985. After the Gerstner cuts that figure was 225,000. The CEO's workforce reduction and cost cuts saved IBM $4 billion a year. <a href="http://247wallst.com/2011/12/07/the-biggest-corporate-layoffs-of-all-time/#ixzz1frktWIL7" target="_hplink">Read more at 24/7 Wall St. </a>