A second-quarter earnings report release by Loblaws Companies Ltd. says 52 unprofitable stores will be closed over the next year.
The company currently has more than 2,000 stores under the names Loblaws, Provigo, Extra Foods and its recently acquired Shoppers Drug Mart. The closure announcement on Thursday said it will affect all banners and formats owned by Loblaws Companies Ltd.
With the closures, sales are expected to be cut by $300 million per year, but on the other hand, it will result in a $35 million to $40 million improvement in operating profits.
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Closure costs are estimated to be $120 million and of this amount $45 million was taken in the second quarter that ended June 20 and $30 million were for severance and lease termination costs.
The news release about the cuts shows that the grocery retailer’s sales rose to 2.2 per cent to $10.54 billion for the same quarter last year.
The company also reports a second-quarter profit of $185 million as compared with a loss of $456 million a year ago.
