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