Sears Canada focuses on affordable yoga gear, posts Q1 net loss of $75.2M

Sears Canada targets Lululemon in a bid for stability

Sears Canada is placing its bets on becoming a new stop for consumers who want affordable, high-quality yoga gear.

The Pure NRG Athletics yoga line has been a bright light for the struggling retailer

The struggling department store chain says its Pure NRG Athletics line of yoga clothes has been a hit with customers since it was introduced in February.

The chain says it sells yoga pants for $14.99 or $29.99 – a steal compared to similar clothing from other retailers, like Lululemon Athletica.

“Not many Canadians can afford to pay over $100 for a pair of yoga pants,” Sears president and CEO Douglas Campbell said Wednesday following the release of the company’s latest quarterly earnings.

“So we’re going to take some of the best-in-class yoga pants we can find and engineer them to a price point where our ladies are willing to spend.”

Over the last few years, Sears Canada has faced stiff competition from long-time rivals such as Hudson’s Bay Co., and American giants like Walmart and Target, and has rebranded itself as a destination for middle-class shoppers and not those looking for high-priced runway styles and lavish decor.

Related
• Can retailers operate in the middle sector without getting stuck?

A large part of whether the company’s three-year turnaround plan will be successful depends on whether it can transform itself into a place families or frugal Canadians will think of first for reasonably-priced, basic clothing items like parkas, dress shirts and black dresses.

“Canadians still maintain those middle-class sensibilities even if they’re more affluent,” Campbell said.

“Even if they can afford to spend $600 or $700 on a winter coat, they’re not going to spend (that) if they know they can get the right features to keep them warm and it’s still fashionable for less than $200. That’s really the space where we’re going to play in.”

Sears Canada saw its net loss more than double in the first quarter as it felt the impacts of shoppers staying away due to a long winter throughout most parts of Canada.

It posted losses of $75.2 million, or 74 cents per share, for the three-month period ended May 3. This compared with a loss of $31.2 million, or 31 cents per share, for the same period a year earlier.

Sears CEO Doug Campbell at the company's AGM in April (CP)

Campbell said the cold weather meant the retailer saw sales on in its spring merchandise lag because it delayed bringing out the merchandise for several weeks.

But an upside was that it also allowed the retailer to clear leftover fall and winter merchandise, “virtually emptying our stockrooms and getting it in front the customer.”

Same-store sales on locations open for at least a year and an important metric in the retail industry, decreased by 7.6% year-over-year.

Total revenues for the quarter were $771.7 million down from $867.1 million year-over-year, affected by a number of factors, including store closures.

Last week, U.S.-based Sears Holding Corp. announced it was considering selling its 51% interest in Sears Canada.

Brands Articles

Marketers to C2-MTL: Treat consumer data with care

Aimia and Aldo CMOs on the importance of using data to deliver better customer service

Cossette and OMD named SickKids Foundation AORs

Agencies will shape a new vision for a big name in the competitive fundraising space

Jack Black skincare selects first Canadian AOR

1Milk2Sugars will share duties between its Montreal and Toronto offices

Rabba Fine Foods hires first PR and marketing agencies

Future PR and marketing efforts will focus on the retailer's ties to the community

FIFA sponsors respond to corruption scandal

Visa and Coca-Cola call for change in how world football is managed

Maille pop-up puts fresh mustard on tap

After pop-ups in Vancouver and Montreal, the brand sets up in Toronto's Pusateri's

Moet Hennessy CMO to C2-MTL: You want loyalty? Buy a dog

CMO panel discusses the future of consumer engagement at annual event