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TORONTO -- Loblaw Cos., Ltd. here said it has decided to go ahead with the liquidation of general merchandise from its inventory, and will hire third parties to help it in this process.
Inventory liquidation was raised in the retailer's third-quarter report as one of several areas to be considered during the fourth quarter. Loblaw said it anticipates that it will incur a pretax charge in that quarter in the range of $100 million to $120 million, including the loss on disposal of this inventory being liquidated and costs related to storage, transportation, and the liquidation process.
"The company believes that reducing its inventory levels will contribute to the improvement of the efficiency of its supply chain operations and the service levels provided to its stores and customers," Loblaw said in a statement last week.
In accordance with its recently announced strategic plan to "Simplify, Innovate and Grow," the company said it is streamlining its organization by redesigning processes and structures with the aim of making the business more efficient and effective. Loblaw said it would provide an update on the other issues mentioned in its Third Quarter Report as being under review.
Loblaw, Canada's largest food distributor and a leading provider of general merchandise products, drug store, and financial products and services, operates more than 1,000 corporate and franchised stores across the country.