Canadian home improvement retailer Rona (TSE:RON) Thursday posted a loss of more than $151 million in the fourth quarter as the company took restructuring charges to reflect weak markets and a plan to refocus the company.
The Montreal-based company said the loss compared with a profit of about $20 million a year earlier.
Quarterly sales rose 2.6 percent to $1.17 billion, though same store sales dropped at its outlets as the company dealt with poor weather, tough competition from other retailers and a slowing economy.
The increase in total sales was due to acquisitions in the retail, commercial and professional and distribution segments, and to the opening of new stores in the retail segment and new outlets in the commercial and professional segment, Rona said.
In the quarter that ended December 25, Rona saw a 2.3 percent decrease in same-store sales for its corporate and franchise stores.
The drop in same-store sales was due to consumer caution in their discretionary spending and the decline in residential housing starts, the company said.
Ontario, Quebec and the Atlantic provinces were less affected by the decline in sales, and Western Canada was more affected, particularly in British Columbia, where a referendum on the sale-tax harmonization delayed major construction projects, Rona added.
The company took $187 million in restructuring charges in the quarter for amortization, depreciation, asset and goodwill impairments as well as nearly $10 million for bond repurchases.
Rona president and chief executive officer, Robert Dutton, said: "After a tougher start to the year than our industry expected, we took major steps to improve efficiency and optimize our capital structure during the second half of 2011.
"These initiatives have already enabled us to cut our selling and administrative expense for our existing operations by more than $25 million, or close to 5 percent, and will result in recurring annual and substantial interest savings of close to $10 million in coming years.
"In the current market environment, operational efficiency and optimal utilization of capital are more vital than ever. We have already taken steps to address these areas and will continue such efforts.
"However, we will also be concentrating on our different clienteles to ensure we offer them products and services that are even better suited to their respective needs."
Rona's full year results showed a loss of $78.4 million, reversing a $137.4 million profit in 2010.
The company said it is refocusing its marketing strategy, introducing a new website and digital sales initiative and streamlining to improve its financial performance going forward.
Rona is the largest Canadian retailer and distributor of hardware, home renovation and gardening products. Its 700 stores employ nearly 30,000 employees across Canada.