Question

suggest steps the company might take to reduce its losses and establish profitability,

the cenario:

Reitmans Ltd. (RET.TO) says it had a net loss of $3.2 million in the last quarter in an improvement from the $6.6 million net loss in the same quarter a year earlier (The Canadian Press, 2018).

Reitmans management says sales were $207.6 million in the quarter, compared with $207.1 million a year earlier despite a net reduction of 32 stores, while promotional costs were up on increased activity. The company said in March it would close its 17 Hyba athletic clothing stores by next February and move the brand into the company's existing Reitmans stores (The Canadian Press, 2018).

Reitmans also states Online sales jumped 21.9 per cent in the quarter while store sales dropped 3.9 per cent.

Reference

The Canadian Press. (2018, June 05). Reitmans reports $3.2M net loss; sales steady despite store closures - Article. Retrieved from https://www.bnnbloomberg.ca/reitmans-reports-3-2m-net-loss-sales-steady-despite-store-closures-1.1088263

Answer 1

Answer)

Here the scenario says that even after closing 32 stores they still improves clearly states that two points are working here. The first one is their promotional activities are working and the second one of that they got rid of units which are resulting in huge losses. Here, the following methods can decrease losses and increase profitability. They are:

1) Increasing sales in order to cover all fixed costs. This can be achieved by providing discounts, coupons, reward points cash etc in order to go to the break even point first and then after getting their fixed costs thinking of profits.

2) The 17 stores that they plan to close must the units with heavy losses.Even after that they must further analyse the site that have not profit earning capacity and close them also.

3) It is mentioned that online sales are increasing than stores. So, it is better to maintain stores at make business centres and sell on online for other centres as it reduces the fixed costs by large extent.

4)Making a target group like price sensitive customers or price insensitive customers whose interests changes with trends and so on and making sale strategies according to it.