- Accelerated growth strategy and "Super Branding" will add
more than 100 new Sport Chek and Atmosphere stores over the next
five years
- Growth strategy results in closure of under-performing and
non-strategic corporate banners
TORONTO, May 30, 2012 /CNW/ - Canadian Tire Corporation,
Limited (TSX: CTC, CTC.A) ("Canadian Tire") today announced an
accelerated growth strategy for FGL Sports' (formerly the Forzani
Group Limited) corporate banners that focuses on aggressive
expansion, primarily of Sport Chek as its most-strategic and
best-positioned corporate banner.
As part of the strategy, FGL Sports will expand its footprint
significantly. Outside of Quebec, Sport Chek will be the key "super
brand." The company will also grow Atmosphere as its outdoor
lifestyle banner across the country. In total, FGL Sports
intends to add more than 100 new Sport Chek and Atmosphere stores
or more than two million square feet of new retail space under
those banners over the next five years - equivalent to more than 50
per cent more retail space. In particular, new concept,
large, urban flagship Sport Chek stores will be opened, starting in
2013. As part of today's announcement, a number of
under-performing, non-strategic corporate banners will be
closed.
"Our vision is to create unparalleled access and customer
connections to make our banners the conduit to the best sports
brands in the world," said Michael Medline, President of FGL
Sports. "To achieve this goal, we are concentrating on our
core banners. To date, the acquisition and integration of FGL
Sports have been seamless. Sales and profitability of FGL
Sports have been strong and synergies are on target. Now,
we're going on offence to strengthen our store network."
This retail expansion will also include an aggressive "super
branding" strategy to build brand affinity and customer loyalty.
This will be established through the development of an emotional
connection between the customer and the brand, while continuously
improving customer service and the in-store experience, all to
drive sales. It includes significant growth across Canada, notably in Ontario and specifically in the Greater Toronto Area, where FGL Sports has
been historically underrepresented.
"Our growth strategy will further position Canadian Tire and FGL
Sports as the ultimate authority in sports in Canada," continued Medline. "In our work
leading up to the acquisition of Forzani, it was clear that banner
closures would be necessary and that was built into our financial
modeling. These banners are expected to be generating unprofitable
sales at the time they are closed and are not strategically
well-differentiated in the market. This plan allows us to
focus on our core banners in order to maximize results for FGL
Sports."
In order to focus and invest in the fastest growing and most
profitable banners, stand alone corporate locations for Sport Mart,
Athletes World, Nevada Bob's Golf,
Hockey Experts, Fitness Source and Econosports will either be
converted to a Sport Chek or Atmosphere store or will be closed by
the end of Q1 2013.
National Sports, a Southern
Ontario based retail banner consisting of 18 team sports and
hockey stores is well-differentiated and will continue to operate
in the Ontario market. FGL Sports'
current specialty stores - Nevada
Bob's Golf and Hockey Experts - will continue to evolve into
'concept stores' within Sport Chek, an initiative that has been
underway for several years.
While 115 corporate stores in total will be closed,
approximately 20 of these locations will be converted to either
Sport Chek or Atmosphere, resulting in a net closure of roughly 95
corporate stores. These closures will be offset by more than
100 new corporate stores that are planned to open over the next
five years. In total, growth of over two million new square
feet of retail space is expected, or approximately 1.4 million
square feet net of the planned closures and conversions. For
all store closures, the Company will undertake efforts to retain as
many employees as possible through transfers to converted or new
stores.
The closures announced today do not impact any of FGL Sports'
franchise banners or franchise store locations, which will remain
operating as usual. FGL Sports will look to grow and develop
Sports Experts, its largest franchise banner in Quebec, as well as all other franchise
banners.
The pre-tax costs associated with the store closures are
estimated to be approximately $26
million. It is expected that the majority of these costs
will be recognized in Q2 2012.
FORWARD-LOOKING STATEMENTS
This document contains forward-looking information that reflects
management's current expectations related to matters such as future
financial performance and operating results of the
Company. Forward-looking statements are provided for the
purposes of providing information about management's current
expectations and plans and allowing investors and others to get a
better understanding of our financial position, results of
operation and operating environment. Readers are cautioned
that such information may not be appropriate for other
circumstances.
All statements other than statements of historical facts
included in this document may constitute forward-looking
information, including but not limited to, statements concerning
management's expectations relating to possible or assumed future
prospects and results, our strategic goals and priorities, our
actions and the results of those actions and the economic and
business outlook for us. Often but not always, forward-looking
information can be identified by the use of forward-looking
terminology such as "intend", "may", "will", "expect", "believe",
"estimate", "plan", "could", "should", "would", "outlook",
"forecast", "anticipate", "foresee", "continue" or the negative of
these terms or variations of them or similar
terminology. Forward-looking information is based on the
reasonable assumptions, estimates, analysis and opinions of
management made in light of its experience and perception of
trends, current conditions and expected developments, as well as
other factors that management believes to be relevant and
reasonable at the date that such statements are made.
By its very nature, forward-looking information requires us to
make assumptions and is subject to inherent risks and
uncertainties, which give rise to the possibility that the
Company's assumptions may not be correct and that the Company's
expectations and plans will not be achieved. Although the Company
believes that the forward-looking information in this document is
based on information and assumptions which are current, reasonable
and complete, this information is necessarily subject to a number
of factors that could cause actual results to differ materially
from management's expectations and plans as set forth in such
forward-looking information for a variety of reasons. Some of
the factors - many of which are beyond our control and the effects
of which can be difficult to predict - include (a) credit, market,
currency, operational, liquidity and funding risks, including
changes in economic conditions, interest rates or tax rates; (b)
the ability of Canadian Tire to attract and retain quality
employees, Dealers, Canadian Tire Petroleum agents and PartSource,
Mark's Work Wearhouse and FGL Sports store operators and
franchisees, as well as our financial arrangements with such
parties; (c) the growth of certain business categories and market
segments and the willingness of customers to shop at our stores or
acquire our financial products and services; (d) our margins and
sales and those of our competitors; (e) risks and uncertainties
relating to information management, technology, supply chain,
product safety, changes in law, competition, seasonality, commodity
price and business disruption, our relationships with suppliers and
manufacturers, changes to existing accounting pronouncements, the
risk of damage to the reputation of brands promoted by Canadian
Tire and the cost of store network expansion and retrofits and (f)
our capital structure, funding strategy, cost management programs
and share price. We caution that the foregoing list of
important factors and assumptions is not exhaustive and other
factors could also adversely affect our results. Investors and
other readers are urged to consider the foregoing risks,
uncertainties, factors and assumptions carefully in evaluating the
forward-looking information and are cautioned not to place undue
reliance on such forward-looking information.
For more information on the risks, uncertainties and assumptions
that could cause the Company's actual results to differ from
current expectations, please refer to the "Risk Factors" section of
our Annual Information Form for fiscal 2011 and our 2011
Management's Discussion and Analysis, as well as Canadian Tire's
other public filings, available at www.sedar.com and at
www.corp.canadiantire.ca.
Statements that include forward-looking information do not take
into account the effect that transactions or non-recurring or other
special items announced or occurring after the statements are made
have on the Company's business. For example, they do not
include the effect of any dispositions, acquisitions, asset
write-downs or other charges announced or occurring after such
statements are made.
The forward-looking statements and information contained herein
are based on certain factors and assumptions as of the date hereof.
The Company does not undertake to update any forward-looking
information, whether written or oral, that may be made from time to
time by it or on its behalf, to reflect new information, future
events or otherwise, unless required by applicable securities
laws.
Investment Community Conference Call Details
A conference call will be held to discuss information included
in this news release and related matters at 10 a.m. ET on May 30,
2012. The dial-in information is noted below. The
conference call will be available simultaneously and in its
entirety to all interested investors and the news media through a
webcast at http://investors.canadiantire.ca, and will be available
through replay at this website for 12 months.
Conference call details:
1-888-241-0326 for Canada and
the U.S.
1-647-427-3411 for outside of Canada or the U.S.
Conference ID: 86413619
Replay (available until June 30,
2012):
1-855-859-2056 for Canada and the
U.S.
1-404-537-3406 for outside of Canada and the U.S.
About Canadian Tire Corporation
Canadian Tire Corporation, Limited (TSX: CTC.a) (TSX: CTC) is
one of Canada's most-shopped
general retailers and the country's largest sporting goods
retailer, with more than 1,700 retail and gasoline outlets from
coast-to-coast. Our primary retail business categories -
Automotive, Living, Fixing, Sports, Playing and Apparel - are
supported and strengthened by our Financial Services division,
which offers such products and services as Canadian Tire Home
Services, credit cards, retail deposits, in-store financing,
product warranties, and insurance. Nearly 68,000 people are
employed across the Canadian Tire enterprise, which was founded in
1922 and remains one of Canada's
most recognized and trusted brands.
SOURCE CANADIAN TIRE CORPORATION, LIMITED
Image with caption: "Michael Medline, President of FGL Sports,
today announced an accelerated growth strategy and "super branding"
for FGL Sports' corporate banners. The strategy will include the
opening of more than 100 new Sport Chek and Atmosphere stores. (CNW
Group/CANADIAN TIRE CORPORATION, LIMITED)". Image available at:
http://photos.newswire.ca/images/download/20120530_C3870_PHOTO_EN_14334.jpg
Image with caption: "Michael Medline, President of FGL Sports,
today announced an accelerated growth strategy and "super branding"
for FGL Sports' corporate banners. The strategy will include the
opening of more than 100 new Sport Chek and Atmosphere stores. (CNW
Group/CANADIAN TIRE CORPORATION, LIMITED)". Image available at:
http://photos.newswire.ca/images/download/20120530_C3870_PHOTO_EN_14347.jpg