Sears Canada chief executive Calvin McDonald says there is still much work to be done as the department store retailer reconsiders what it sells in its stores.
"We don't have our balance 100 per cent right," McDonald said at the company's annual meeting on Thursday.
"There are still businesses that we're in today…that are struggling, declining in the marketplace and we need to reset."
'If we want to remain relevant, we've got to continue to adjust.' —Sears Canada chief executive Calvin McDonald
A year into a major transformation McDonald outlined to shareholders the efforts that have been made so far, and some of the plans for the future.
Gone from its main department stores will be electronics and window coverings. Toys are now sold only online and more changes are in the works, like a scaled down selection of its Craftsman hardware products.
"We are going to potentially exit something in retail, but play it very heavy in another channel," he said.
"If we want to remain relevant, we've got to continue to adjust."
Retail sector heats up as Target enters Canada
Sears has been hurriedly making changes as competition in the retail sector intensifies, encouraged partly by the entry of Target into Canada — which opened its first stores outside of the United States last month.
Other department stores have also taken a chisel to their strategy. Hudson's Bay Company, for instance, is in the middle of a makeover that focuses on exclusive store-within-a-store offerings like men's clothing store Topman.
But McDonald said Sears is more focused on its brands, rather than creating shops-within-shops. In addition to the Craftsman-brand of tools, the company also sells major appliances under its own Kenmore brand and major name brands.
The company's latest financial year, ended Feb. 2, included $39.9 million or 39 cents per share of net earnings for the fourth-quarter — which spanned the important holiday buying season.
The profit was practically unchanged from a year earlier when the company had $41 million of net income during a shorter, 13-week period ended Jan. 28, 2012.
However, the latest quarter received support from two special items — a $21.1-million gain related to a voluntary buyout program and an $8.6-million gain related to the sale of its share of a joint venture.
Adjusted earnings, excluding those and several other items, fell to $62.4 million from $101.8 million. Revenue fell to just under $1.3 billion, down about $60 million from a year earlier despite an extra 14th week of sales.