Sears Canada (SCC) - Scotiabank Back to School Conference Presentation - 09.17.13.pdf

7/27/2019 Sears Canada (SCC) - Scotiabank Back to School Conference Presentation - 09.17.13.pdf

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September17,2013


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This presentation contains information which is forwardlooking and is subject to important risks and uncertainties.

Forwardlooking information concerns, among other things, the Company's future financial performance, business

strategy, plans, expectations, goals and objectives. Although the Company believes that the estimates reflected in such

forward

looking information are reasonable, such forward

looking information involves known and unknown risks,uncertainties and other factors which may cause actual results, performance or achievements to be materially different

from any future results, performance or achievements expressed or implied by the forwardlooking information and

undue reliance should not be placed on such information.

Factors which could cause actual results to differ materially from current expectations include, but are not limited to:

the ability of the Company to successfully implement its cost reduction, productivity improvement and strategic

initiatives and whether such initiatives will yield the expected benefits; the results achieved pursuant to the Company's

longterm marketing and servicing alliance with JPMorgan Chase Bank, N.A.; general economic conditions; competitive

conditions in the businesses in which the Company participates; changes in consumer spending; seasonal weather

patterns; customer preference toward product offerings; changes in the Company's relationship with its suppliers;

interest rate fluctuations and other changes in funding costs; fluctuations in foreign currency exchange rates;

the possibility of negative investment returns in the Company's pension plan; the outcome of pending legal

proceedings; and changes in laws, rules and regulations applicable to the Company. Information about these factors,

other material factors that could cause actual results to differ materially from expectations and about material factorsor assumptions applied in preparing forwardlooking information, may be found in this release and in the Company's

2012 Annual Report under Section 11 Risks and Uncertainties and elsewhere in the Company's filings with securities

regulators. The Company does not undertake any obligation to update publicly or to revise any forwardlooking

information, whether as a result of new information, future events or otherwise, except as required by law.

Forward

Looking

Statement


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5,943 5,845 5,733

5,2014,939

4,619

47 3 526 52 0 49830 7

124

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2006 2007 2008 2009 2010 2011

Revenue

EBITDA

1. In$Millions

2.

2010

2011in

IFRS;

2007 2009

in

GAAP

SameStoreSales 0.1% 1.1% 1.6% 6.8% 4.4% 7.5%

EBITDA%ofRev. 8.0% 9.0% 9.1% 9.6% 6.2% 2.7%

HISTORICAL

PERFORMANCE


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AMAJORCANADIANRETAILERWITH:

Majorsalesvolume

Loyalcustomers

and

associates

Astrongbalancesheetwithnodebtandagoodcashposition

THAT:

Lostitsretailrhythm

Lostrelevance

THATIS:

Readytochange

Committedtotransformation

WhereWeWereWhenourTransformationstarted


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STRATEGICFRAMEWORK


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CREATING

MAXIMUM

VALUE

MERCHANDISINGVALUE

CoreRetailBusinessTrading

5PillarsofGrowth

1

COST/EFFICIENCYVALUE

Rightsizing

Outsourcing

2

HIDDENVALUE

Reviewnonstrategicassets

Maximizerealestate

potential

3


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The

Transformation

Roadmap

2012 2015

Next2Years

EstablishRetailRhythm

GettheBasics

3Years+

GrowThroughInnovation

Year1


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TRADINGOURSELVES

OUT

OF

WHATWETRADEDOURSELVESINTO

Finan

cialPerforman

ce

Time

A

B

C


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1

GETVALUERIGHT

OPERATE

THE

BEST

FORMATS

ORGANIZETHERIGHTTALENT&CREATEAWINNINGATTITUDE

BECUSTOMERDRIVEN,MARKETINGLED

BUILDTHECORE

2

3

4

5

FORMULAFORGROWTH


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BUILDTHE

CORE

1

Heroshopswheredollarshare=shareofmind

Uniquebrandswithauthoritativeassortmentandexclusivity

Shops ofbrands

vs.

branded

shopsneeds

driven

merchandising

Strategicalliances

Complementaryservicesfromstoretohome


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HERO

SHOPS


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STRATEGICALLIANCES

NevadabyBuffalo PrivatebrandfootwearbyAldo

Carters/OshKosh Penningtons fromReitmans


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Season

KickOffLOOK!Report

RelevantSales/PartnerMarketingClearance

MidSeason

Savings

SearsDays/

Bounceback

THESEARS

CYCLE

IncreasedBasketIncreasedStoreTraffic

BecometheGoToRetailer


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10% 14% 13% 11%18% 21% 23% 17%

FallLOOK! HolidayLOOK! SpringLOOK! SummerLOOK!

Before

AfterMotivationtoShop

LOOK!

report


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BRANDPOSITIONING


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3

Defineouruniquevalueequation:

PriceXQuality

XService

Getcreditforvalue

Begintobuildtrust

CreditCardandLoyaltyPoints

GETVALUE

RIGHT


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PRICE


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QUALITY


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SERVICE


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Urban

Full-line

20 stores

Mid-

market

Full-line94 stores

Sears

Home

48 stores

Corbeil

34 stores

Rural

Hometown-

Dealer

246

storesDirect

MULTIFORMATRETAILER


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SEARS

HOME

STORES

Basedon

success

of

Pinecrest,

continued

to

improve

assortment

and

layoutintwopilotstores:Ancaster andWhitby,openedJuly5

MidtohighapplianceassortmentbyCorbeil Appliances

Newbrands,includingChateaudAx,Broyhill,SimonLi

Roomsettings,complementedbyHotSpots

+9.7%vs.remainingstoresperformance


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DIRECT

IntroducedCatalogue

Apps

for

iPad (Wish

Book;

LOOK!

report)

Grewemaillistandimprovedfrequencyofoffers

SocialMediaEngagement(Twitter,Facebook,YouTube)

AchievedbalanceofsaletoshifttoOnlinevs.Catalogue

Focusedassortmentsandreducedomits

GrewonlineHerocategoriesbestinCanadaassortment

Researchdestinationforbigticketpurchases

Establishednewcataloguecreativeandoptimizedpages


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OrganizetheRightTalentandCreate

aWinning

Attitude

Transformationrequiresleadership

Leverage29,000

loyal

and

dedicated

associates

wakeuptheorganizationtoactdifferently

Itsinourbehavior.

5


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CREATINGMAXIMUMVALUE

HIDDENVALUE

3


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UNLOCKING

HIDDEN

VALUEINITIATIVES

Earlysurrenderofleasesannouncements:

March2012:PacificCentre,Calgary Chinook,OttawaRideau

Centre

June2012:Calgary Deerfoot

June2013:Yorkdale,SquareOne

Cantrex

April2012toNationwideMarketingGroup

December2013:MedicineHat

SoldinterestinMall

Burnabypropertydevelopment

Searsownedland:9acres

Plansincludenewstoretoreplaceexistingstore


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1. In$Millions

2. ComparableEBITDAs;Excludesnoncompitems(impairmentlosses;sellingof4closedstores,Cantrex,HIPS)andJointVentures

LASTFOURQUARTERSPERFORMANCE

6.3 8.5

99.7

67.1

(30.8)(13.5)

10.7 12.9

(20.2)

(0.6)

2011

Q3

2012

Q3

2011

Q4

2012

Q4

2012

Q1

2013

Q1

2012

Q2

2013

Q2

2012

Jul

YTD

2013

Jul

YTD

EBITDA

+33.8%

32.7%

+56.2%

+21.2%

+97.0%


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GETTING OUR BALANCE


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100%

Declining

Growing

Innovation

Risk

GETTINGOURBALANCE

OFSALE

RIGHT

Wherewewere


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GETTING OUR BALANCE


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SolutionReallocation

of

space

GrowherocategoriesProductlineswherewehaveearnedauthoritywith

Canadians

FixremainingcategoriesDepartmentstorecategoriesinwhichCanadiansexpect

Searsto

trade

ExitreducingcategoriesMakeroomforexpansionofherocategories

(example:Penningtons)

GETTINGOURBALANCE

OFSALE

RIGHT


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IN

CONCLUSION Thisisathreeyeartransformationandwearehalfwaythrough

Whenweactanddothingsdifferently,customersrespondpositively

Thecategoriesinwhichwehavelaunchedthemostinitiatives(A&A

andM.A.)areshowingpositivesamestoresalesgrowth

Wehave

many

new

opportunities

as

we

progress

into

the

second

halfof2013

CreatingTotalValueforSearsCanadaisabalanceofMerchandising

Value,Cost/EfficiencyValueandHiddenValue

Weneedallstakeholderstobelieveintheopportunity


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Sears Canada (SCC) - Scotiabank Back to School Conference Presentation - 09.17.13.pdf