TORONTO -- Sears Canada Inc. reported a $31-million loss Wednesday but said it managed to grow sales in categories like apparel and bed and bath despite competition from U.S. newcomer Target.
"We grew businesses that overlap with the competition in a tough quarter and we're happy with those results," president and chief executive Calvin McDonald said in an interview.
McDonald said economic conditions, lagging consumer confidence, slowing home sales and an unusually cool spring made for a challenging quarter.
Competition from new entrants like Target also provided a challenge.
Sears has said about 70 per cent of its assortment overlaps with that of the Minneapolis-based department store chain, which began rolling out its Canadian stores in March.
By the end of the year, Target plans to operate 124 locations across Canada.
Despite the heightened pressure, Sears said it saw growth in its apparel and accessories segment for the second quarter in a row -- the first time that has happened in more than six years.
There was also an improvement in the bed and bath category.
"It's a good indication that we're able to grow in tough environmental conditions," said McDonald.
"We're pleased that customers are responding the way we intended with our changes to our product."
However, Sears saw some trouble in its "hard goods" categories, which include furniture, mattresses and major appliances.
These categories have typically been an area of comparative strength for the company, but are declining in the overall market because of low consumer confidence.
McDonald said Sears maintained market share in these categories even as sales declined.
"The unseasonable cool spring in most parts of the country had an adverse impact on sales of outdoor power equipment, patio and other seasonal lines," McDonald added in a statement.
-- The Canadian Press