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Home Depot Flyer London Ontario
MONTREAL – Rona affairs to abutting 11 of its money-losing food in two provinces, as able-bodied as cut added authoritative jobs and trim its business account in an accomplishment to addition its banking results.
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After years of efforts to abode acerbic profits, newly-installed CEO Robert Sawyer said his restructuring plan creates a simplified business anatomy and a added active company, and it should be the aftermost cost-cutting exercise bare to about-face the aggregation around.
“It’s abundant of restructuring,” he said in an account on Thursday.
“Going forward, we’re there to do business. We’re there to access our sales and we’re there to accord achievement to customers.”
Sawyer said his plan is based on a boxy abridgement that doesn’t appearance abundant improvement.
The executive, who came from Metro Inc. (TSX:MRU), said he will use his acquaintance in the grocery business to adapt Rona’s flyers and action adorable discounts to allurement barter to the stores.
“The flyer is the No. 1 account (that is) a cartage builder, so we’re activity to try and be bigger in our affairs of flyers,” he said.
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Investors accustomed Rona’s latest move, sending the company’s shares up about eight per cent to $10.47 in Thursday trading on the Toronto Stock Exchange.
Of the abundance closures, eight are in Ontario and three are in British Columbia.
Six Ontario food in Mississauga, Windsor, Woodbridge, London, Huntsville, and Collingwood will abutting in October and two Ontario food in Toronto and Aurora will abutting in December. The three B.C. food — in Duncan, Kamloops and Abbotsford — will shut bottomward in October.
Sawyer said he absitively to abutting the stores, decidedly in Ontario, because years of accomplishment to about-face them about has failed, in allotment because there is too abundant retail aboveboard footage available.
Rona will additionally attending to catechumen a few of its 63 big-box food alfresco of Quebec into the abatement Reno-Depot brand, which offers a added bound alternative of cheaper items.
About 800 jobs will be alone by the closures that calm generated $130 actor of anniversary sales. About two-thirds of the jobs are part-time.
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Rona (TSX:RON) additionally said 125 added authoritative jobs will be cut beyond Canada on top of the 200 appear aftermost February. About 50 jobs are based at its address in the Montreal-area while the actual positions are based in Toronto, Calgary, Vancouver and Winnipeg.
The aggregation expects to pay $15 actor in severances due to abundance closures and authoritative job cuts.
The Quebec-based home renovations banker will additionally badly abate its business spending by catastrophe all sponsorships, including at the Olympics, abbreviation television announcement to focus on cheaper radio spots and absorption added on its account flyers.
“What we’re absolutely seeing actuality is addition case of Rona shrinking for growth,” said Derek Dley of Canaccord Genuity.
“This to me shows that they’re aloof not able to attempt on the big-box akin with the brand of Home Depot and Lowe’s in those key markets anywhere alfresco of Quebec,” Dley said from Vancouver.
Last week, Rona appear affairs to advertise its bartering and able bazaar analysis for about $215 million.
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The aggregation is aiming to abate anniversary operating costs by $110 actor — $70 actor added than was anticipation in February — but it will almanac up-front costs and accounting measures in its additional quarter.
Rona said it will almanac $220 actor of adjustments accompanying to the restructuring and auction of the bartering analysis during the quarter, of which $195 actor will be non-cash items.
The aggregation affairs to reinvest 30 per cent of the amount accumulation in the actual business, mainly to abate prices and armamentarium some renovations to about 50 stores.
The efforts should advance Rona’s margins aloft six per cent, said arch banking administrator Dominique Boies.
The banker has been disturbing for years because of anemic customer spending amidst apathetic bread-and-butter advance and apropos about unemployment. It rebuffed a takeover bid aftermost summer from U.S. battling Lowe’s and faced the abandonment of its adept CEO.
Rona additionally afresh dodged a actor defection by replacing abundant of its lath of directors.
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© 2013 The Canadian Press
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