04/23/2015 11:07 EDT | Updated 06/23/2015 05:59 EDT

How Sears Canada Is Benefiting From Target's Disappearance


TORONTO - With the doors closed for good at Target's 133 Canadian stores, Sears Canada CEO Ronald Boire hopes more shoppers will now walk through Sears department stores.

"It's generally an opportunity for Sears to invite those customers back into our store and show them some of the things we've changed," Boire said Thursday after the company's annual meeting.

While he generally kept away from mentioning Target by name, Boire noted that Sears has already reaped some benefits from its rival's exit from the Canadian retail market.

On Thursday, Sears announced it had secured a new license agreement with former Target Canada supplier Cherokee Global Brands.

Starting in spring 2016, Cherokee will supply Sears with a broad line of clothing, footwear and accessories, including the popular Liz Lange Maternity line.

Sears also announced a separate agreement to launch an exclusive menswear line with hockey star Wayne Gretzky that will start to roll out at stores in October.

Sears Canada is looking to strip more expenses from its operations this year as it lumbers ahead with a turnaround plan.

"This business is sized for significantly more revenue than we produce today," Boire said.

"We have plans to reduce costs this year and we have initiatives to exceed those cost reduction targets."

Boire made the comments in response to a shareholder question at the retailer's annual meeting in Toronto.

Sears Canada (TSX:SCC) posted a $338.8 million loss last year as it grappled with expenses linked to its multi-year turnaround plan, which has included staff reductions, store closures and a revamped inventory that draws attention to certain brand names.

"Our general focus is to make big lines bigger and make small lines go away," Boire said.

Same-store sales, a key financial barometer for retailers, were down 8.3 per cent in 2014, as Sears felt the impact of price markdowns that were meant to clear out piles of old inventory.

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