As part of a previously announced management realignment, Canadian Tire company said it will record a one-time pre-tax charge of approximately $15 million in the third quarter of 2010 for severance costs associated with the departure of some senior managers and employees The flow through of these cost savings will benefit 2011 performance by approximately $0.11 per share.
Two long-term officers of the company, Huw Thomas EVP Financial Strategy and Performance, and Stan Pasternak, SVP and Treasurer, will retire over the coming months. Responsibilities will transition to Marco Marrone, EVP Finance and CFO.
The management changes are aimed at focusing the company's leadership on top-line growth, building a world-class customer experience and reducing duplicative costs between 'five inter-related businesses' by operating as 'one company, serving one customer'.
The company said it had made substantial progress in centralizing shared service functions – Finance, Human Resources, IT, Legal, Communications & Corporate Affairs, and Corporate Strategy and Real Estate – to reduce duplication of work and remove costs from the organization. These shared services functions will operate as centres of excellence within the organization, providing expertise and services to all six business categories – Living, Playing, Fixing, Automotive, Apparel and Financial Services.
As part of the changes, Mike Arnett, who oversees the company's sporting goods categories, has been given expanded responsibilities for company-wide strategic marketing, including the roll-out of the new customer centric retailing and loyalty programs, and brand stewardship.
Arnett will also drive a critical element of the company's productivity program by overseeing merchandise sourcing capabilities for the organization and engaging leading experts to improve the efficiency of the company's merchandise procurement capabilities, which carries significant opportunity with more than $5 billion in annual expenditures. Mr. Arnett remains President of Canadian Tire Retail.
Pat Sinnott, Executive Vice President, Supply Chain and Technology is responsible for the company's technology and supply chain, which includes both Canadian Tire Retail and Mark's. Reporting directly to the CEO, he has been assigned the leadership of a significant productivity initiative to improve the effectiveness of core processes throughout the organization. The productivity initiative will reduce cycle times and cost, and increase the extent to which groups throughout the organization use common, best-in-class processes that are well supported by commercially available technologies.
