As one of the country\’s biggest and oldest fashion retailers, Montreal-based Reitmans Canada Ltd. took a number of strategic steps to turn around its performance in the last fiscal year after four straight many years of falling same-store sales.
The family run women\’s apparel chain shut down its weak-link Smart Set banner and improved same-store sales and profitability, however the retailer\’s capability to avoid the marked brand decline and failure of their peers in the market – Jacob, Mexx, Comark – isn\’t guaranteed.
\”Cash flows have improved and we believe bad thing is limited, meaning value investors should feel compelled to have a look,” CIBC analyst Mark Petrie said in a recent note to clients. “But we percieve excessively stiff competition from arguably modern-day global peers along with a weaker Canadian dollar as ongoing and material headwinds.\”
Reitmans had shrunk to 823 stores after its newest quarter, from 968 in 2010, as it closed its least productive stores. It shuttered the 55-store Smart Set banner completely last fall amid poor performance and now operates under the Reitmans, Penningtons, Addition Elle, RW & Co. and Thyme Maternity banners.
As an effect, net earnings within the three months ended Jan. 31 were $4.4 million or seven cents per diluted share, in contrast to a net loss of $2.6 million (four cents per share) last year. Same-store sales, an essential metric in the retail business, increased 2.1 per cent.