Reitmans reports lower Q3 sales, higher profits due to cost-saving measures

MONTREAL – Womenswear retailer Reitmans Canada Ltd. (TSX:RET.A) said the closure of 52 stores and lower store traffic impacted sales across all of its banners.

The Montreal-based operator of such brands as Reitmans, Penningtons and Addition Elle said it had net earnings of $12.9 million or 20 cents per diluted share for the three-months ended Nov. 1. This compared with $5.8 million or nine cents per diluted share in the same period a year earlier.

The retailer said the increase in earnings was largely the result of it closing non-performing stores, reducing the number of employees at its head office and field operations and other improved cost management initiatives.

Even so, Reitmans said its sales for the quarter fell 4.5 per cent to $238.3 million, compared with $249.4 million a year ago.

It saw growth through its e-commerce platforms but store traffic across its banners were lower, which attributed to weaker overall sales.

Same-store sales increased marginally by 0.2 per cent. Conventional stores decreased 1.5 per cent, while e-commerce sales jumped 76.4 per cent.

The company operates 843 stores consisting of 343 Reitmans, 141 Penningtons, 105 Addition Elle, 79 RW & CO., 68 Thyme Maternity and 107 Smart Sets. It also owns 21 Thyme Maternity boutiques in select Babies”R”Us locations in Canada.

In late November, Reitmans announced that it was shutting down its Smart Set banner to “refocus its sales and merchandising efforts.” It said it will close 107 stores during the next 12 to 18 months and will convert about 76 of the locations into other company banners.