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Sears Canada blames severe winter for fall in sales

Reuters
People walk past the main Sears store in downtown Vancouver, British Columbia
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People walk past the main Sears store in downtown Vancouver, British Columbia February 23, 2011. REUTERS/Andy …

(Reuters) - Struggling department store operator Sears Canada Inc posted a fall in quarterly sales, citing severe winter weather and power outages in the holiday shopping season.

A major ice storm blanketed central and eastern Canada in December, causing widespread damage, power failures, temporary store closures and disruptions to travel and business.

Sears Canada, controlled by hedge fund billionaire Eddie Lampert and his Sears Holdings Corp , lost over 220 store hours in December and January due to severe weather and power failures, compared with about 40 hours a year earlier.

"Despite this, we continued to have a positive quarterly same-store sales increase in our apparel and accessories business, but it was not enough to offset the impact felt in our home and hardlines businesses," Chief Executive Doug Campbell said in a statement on Wednesday.

Last month, Canadian dollar-store operator Dollarama Inc attributed the fall in December comparable-store sales to severe winter weather.

Sears Canada said same-store sales fell 6.4 percent in the fourth quarter ended February 1, adjusted for an extra week a year earlier.

Total revenue fell to C$1.18 billion ($1.07 billion) in the 13 weeks ended February 1 from $1.31 billion in the 14 weeks ended February 2, 2013.

The company's net income rose to C$373.7 million, or C$3.67 per share, in the quarter from C$39.9 million, or 39 Canadian cents per share, helped mainly by a pretax gain related to early lease terminations and amendments.

Sears Canada said in January that it would cut 7 percent of its workforce.

The company's shares closed at C$13.30 on Tuesday on the Toronto Stock Exchange. The stock has fallen about 27 percent in the past three months.

(Reporting By Sneha Banerjee in Bangalore; Editing by Kirti Pandey)

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