Loblaw plans to close 52 unprofitable stores across Canada

BRAMPTON, Ont. – Loblaw Companies Ltd. (TSX:L) says it plans to shut down 52 unprofitable stores in its chain of various retail outlets in a move that will cut sales but boost its operating profit.
The company says the closures will take place over the next 12 months and reduce its sales on an annual basis by about $300 million. But Loblaw says the move will mean an improvement in annual operating income of $35 million to $40 million.
Loblaw spokesman Bob Chant said in an email that the company did a thorough review of all of the company’s retail locations following the completion of its buyout of Shoppers Drug Mart last year and identified 52 that were “consistently underperforming and unprofitable.”He would not identify which locations are due to close, but said the list included gas stations, Joe Fresh stand-alone locations and select pharmacies and grocery stores.
In its latest annual report, the company said it has more than 2,300 locations for its Loblaws, Shoppers Drug Mart, No Frills and Joe Fresh brands, among others.
The company’s announcement Thursday comes months after it said in March it would build 50 new stores and renovate or improve more than 100 existing ones this year as part of a $1.2 billion expansion.
Chant said those plans are still on track, and the company is actually due to grow the number of people it employs at its retail stores by the end of the year.
The company announced the closures Thursday as it reported a second-quarter profit of $185 million or 45 cents per share in its latest quarter compared with a loss of $456 million or $1.13 per a year ago.
On an adjusted basis, Loblaw says it earned $350 million or 85 cents per share in the quarter compared with an adjusted profit of $297 million or 74 cents per share a year ago.
Revenue grew to $10.54 billion, up from $10.31 billion a year ago.