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Department Store Woes (Sears, HBC, Ailes)

S

samsonyuen

Guest
It'd be nice to get a Bloomindale's, Nordstrom, or another high class department store, but that doesn't look too likely. It's not a burgeoning industry, and the arguments Nordstrom, Federated, and others made against buying into Eatons was that there wasn't as big an upscale market in Canada, and Toronto alone wouldn't be enough to substantiate a presence (which I think is pure rubbish). There haven't been any US department store come to Canada since Sears (unless you count discount, like Wal*Mart)!;) What else is supposed to be at 1BE besides the cinema anyway, and what's its status? The Bay on Bloor is quite ugly, but I think 1BE's footprint is much smaller, am I wrong?

I found it funny that Cineplex Odeon merged its worldwide operations with Sony Loews, then spun off the Canadian operations, who merged with Famous Players last week, and now AMC is merging with Loews Cineplex. It's so incestuous! If anything, I think Toronto needs more screens downtown, maybe Cinemark will open some screens here (I believe their sole Canadian operations are in Vancouver).
 
Despite the fact that since Eaton's demise, Canada has far fewer non-discount dept. store chains than the U.S., and far fewer stores per capita, I'd be shocked to see us get any new dept. stores. As I mentioned in an earlier thread, "traditional" dept. store marketshare has been declining since the early 90s, and any visit to Sears or The Bay shows why - they just aren't enjoyable shopping experiences, and generally can't compete on price, selection, or service. They're sort of a "middle ground" that is almost becoming obsolete.

It would be nice if that big Bay store on that corner could be converted to something else (why do they need it when they have a much larger store 4 subway stops south) - I'm just not sure what.
 
I agree in general that department stores are declining. However I do think there is still a home in a downtown urban setting for the luxury department store like a Bloomingdales, Sacks, Neiman Markus, Nordstrum, Harrods, Galleries Lafayette, or Holt Renfrew here in Toronto. The luxury department store offers certain things that the smaller boutique stores don't. Prices tend to be a little more in reach, goods tend to be discounted periodically, and there tends to be more of a selection or they may carry larger collections of designer lines. There is also the convenience of shopping under one roof, as well as the cachet of shopping at a retailer that is perceived as hip or swank such as at a Barney's in New York for example which gives off a certain vibe that is not quite the same vibe as shopping at a small exclusive boutique. The problem in Toronto IMO is that Eaton's became too dowdy and dated, while the Bay just hasn't been able to secure a niche in a nonsuburban setting and certainly hasn't been able to successfully market itself with any discernable style. Based on this I believe that there still is room in Toronto's retail core for one or two more major department stores. With the rehaul of Yonge/Dundas and the luring of other high end, high draw merchants an additional department store or two should be expected to fare well.
 
Any word on the Virgin Megastore for Metropolis?
Virgin will be closing its Virgin Megastore in Vancouver by September and the news reports said they may pull out of Canada completely.

++++++++

On the mid to high end darpartment store front -
Anyone remember Brettons? They used to be at Manulife before Indigo. They were the ones that filled in what used to be an open plaza. They were a flegling chain with mid to upper prices but went bankrupt in the early 1990s.
There have been a number of deparment store that have tried to go upscale and failed.
The Bay tried to retain Simpsons as a separate higher end store - but eventually merged the stores.
Out west, Woodward's tried to go upscale and alienated it core customers.
Eaton's did the same, went bankrupt, then Sears tried to do what The Bay tried to do with Simpsons - keep it as a sepaarte higher end store - but it too eventually merged them into the main chain of stores.

BTW - Holt's has plans to fill in the Pacific Centre atrium in Vancouver (above the food fair) and move its store into the new space north of Dunsmuir Sreet.
 
I remember Bretton's! I was very small, but that place was great. I was there with my parents once, and the sales associate went and got me a hot chocolate while my parents shopped.
 
There are some reports about Sears Canada buying Hudson's Bay Company! If they merged the Bay and Sears, and sold Zellers (probably to Target), and maybe Home Outfitters (to Bed Bath & Beyond), and the one Designer Depot (to Winners?), there'd be one department store company left! What would happen if they made all the Bay stores to Sears, or the other way around? Would a US department store come in to buy a slew of them? Would it be sellable? Or anticompetitive? I doubt it'll happen though.
___________________________________
From today's Chicago Tribune:

Sears Canada linked to Hudson's Bay
Bloomberg News
Published July 7, 2005

Sears Canada Inc., the country's third-largest department-store chain, may merge with Hudson's Bay Co., Canada's biggest department-store owner, by the end of next year or early 2007, according to a Desjardins Securities analyst.

Hoffman Estates-based Sears Holdings Corp., which holds 54 percent of Toronto-based Sears Canada, "will orchestrate a second major step" for Sears Canada after the sale of its credit card operations, Keith Howlett said in a note to clients Tuesday.

A merger with Toronto-based Hudson's Bay would be led by Sears Holdings Chairman Ed Lampert, who isn't likely to sell the company's retail division unless he exhausts all other ways to boost the company's value, Howlett said.

Sears Canada said June 13 that it's exploring the sale of its credit-card unit, which analysts said may fetch more than $2 billion.

Hillary Stauth, a spokeswoman for Hudson's Bay, and Sears Canada spokesman Vincent Power declined to comment.
_______________________________
From yesterday's Chicago Sun-Times

Sears Canada merger seen

An analyst speculated Tuesday that Sears Canada could merge with Hudson's Bay, Canada's oldest department store, in a move to cut costs. Hudson's Bay could sell off its credit-card business, Zellers store leases and other divisions to boost revenue, said Keith Howlett, securities analyst for Desjardins Securities.
 
You would think it would be anti-competitive - but the Competition Bureau could just require the sale of certain stores to another operator (probably a US entity) to allow cometition.

It also makes you wonder which locations they'd close. Anyone see the Queen Street Bay as loft condos?

You also wonder if they would maintain separate banners or would they delete the Sears name from Canada - I can't see them deleting the HBC name - but you never know.
 
I don't think it could happen either. I mean, there's only two nationwide deparmtment stores. Maybe Sears would buy a lot of stores where there isn't a Sears store, and then sell the Bay stores in malls where there's already a Sears store to another buyer. A downtown store like Yonge and Queen (and other flagships in Montreal, etc.) would be pretty attractive to an American retailer maybe (NOT Winners:) . The Bay couldn't keep Simpson's profitable and Sears couldn't keep eatons from tanking, I don't see Sears keeping The Bay (which is a little more upscale IMO) afloat either. Plus, the Bay is such an institution there'd be an outcry to keep at least the name alive.
 
And don't forget taht Woodwards out west tried to go upscale and failed as well. So keeping The Bay alive as a higher end division seems like a non-starter to me, esp. since Sears tried it already with Eatons.
 
Hmm. HBC and Sears. Maybe they could resurrect the previous department store alliance, and call the merged department stores Simpsons-Sears.
 
I guess with the history of all the department store mergers and buyouts over the years, it'd come to this: two department store predators. Sears having bought Eatons, HBC buying Morgan's, Woodward's, Kmart Canada, Zellers, Towers, Simpson's, Robinson's. Half the malls would be empty! And our downtown stores too! I think it's all just spec.
 
Hmm. HBC and Sears. Maybe they could resurrect the previous department store alliance, and call the merged department stores Simpsons-Sears.
My friend from Saskatoon likes to tell me that his parents used to refer to "Simpson-Sears" as "Pimps 'n Queers"! :lol

A couple other retail-related things...

*The Golden Griddle at Front & Jarvis has closed
*Birganart (excellent framing store) on King St E has also closed
*I have it on good word that HMV will be opening stores at Yonge & Sheppard, The Beach, Bloor West Village and TD Centre within the year.
 
Any idea what is replacing Golden Griddle? They have a great corner location and patio, so hopefully it will be put to good use.
Birginart was a great little spot...I had three pics framed there a few years back and they were great to deal with. They also used the front of the shop as a small art gallery. Too bad about it's closing as I was hoping it was just being renovated.
 
J.C. Penney seeks to net Canadians
By MARINA STRAUSS
Monday, July 25, 2005 Updated at 3:54 AM EDT
From Monday's Globe and Mail

U.S. department store giant J.C. Penney Co. is stepping up efforts to bolster its on-line presence in Canada, cashing in on the favourable rate of the dollar against U.S. currency.

The retailer this month launched an advertising campaign in Canadian newspapers across the country, offering 25-per-cent savings on a special link at jcpenney.com/canada.

If successful, Plano, Tex.-based J. C. Penney will intensify its marketing efforts, eager to grab even more business here, said Kevin Gebhardt, a vice-president of the chain's catalogue and Internet division.

"Customers are rapidly adopting this type of shopping," he said in an interview. "We're excited about the potential," he added

For years, U.S. department stores, including J.C. Penney, have scouted the Canadian market for possible expansion, but backed away because of the challenges involved.

Now, a growing number -- J. C. Penney being one of the bigger ones -- are being lured to e-commerce in Canada, partly because of the strong Canadian dollar as well as consumers' growing acceptance of on-line shopping.

"I've had quite a bit of work helping bring some U.S. retailers to Canada via their e-commerce channel," said Jim Okamura, a senior partner at retailing consultancy J.C. Williams Group in Chicago.

He said merchants ranging from home furnishing specialist Crate and Barrel -- a U.S. company now controlled by Germany's Otto Versand Gmbh --to clothier L.L. Bean Inc. of Freeport, Me., and lingerie chain Victoria's Secret, a unit of Columbus, Ohio-based Limited Brands Inc., have enjoyed a lift in their on-line business in Canada in the past year or more.

Canada Post has also played its part in enticing U.S. e-tailers, said Paulina Sazon, marketing manager at Canada Post's Borderfree division. It works with U.S. retailers, trying to help them ease their way into what can be a complex Canadian market, she said. It walks them through the duty and tax laws, shipping practices and marketplace idiosyncrasies.

Canada Post's research has found that there could be room for $15-billion worth of Internet and catalogue business for U.S. retailers in Canada, she said.

Mr. Okamura said a number of U.S. retailers have used e-commerce as a testing ground for rolling out bricks-and-mortar stores in Canada. He cited cosmetics giant Sephora -- the popular cosmetics chain owned by France's luxury powerhouse LVMH Moët Hennessy Louis Vuitton -- which now operates in Canada, and Crate and Barrel, which wants to open stores here. J.C. Penney has done a good job of improving its core U.S. business over the past few years, emerging as one of the few winners in the troubled department-store sector, he added.

It has focused on a mid-market, mid-income customer, emphasizing strong private labels and boosting its home décor offerings.

But J.C. Penney and other foreign e-tailers still have a challenge in doing business in Canada because of the delivery and duty hassles, he said.

Mr. Gebhardt acknowledged that the extra charges can add as much as 20 per cent to the price of J.C. Penney's on-line purchases.

But he argued that the retailer offers great value and does the calculation for the customer, tallying up the order total, including taxes, duties and shipping costs. It delivers within seven to 10 days.

He said Canadian customers have generally bought the same types of goods as their U.S. counterparts. But the company will closely follow the shopping patterns to see whether there are any ways it can tailor its offerings to Canucks.

"The Internet has the ability to reach out to customers wherever they are. We have an established business in Canada that we see growing on the Internet site . . ."

J.C. Penney spokesman Quinton Crenshaw said the retailer has no plans to enter Canada with conventional stores. Rather, the chain has been concentrating on its core U.S. department-store business, and selling off non-core assets such as Eckerd's drug stores.

In Canada, department store retailers Hudson's Bay Co. and Sears Canada Inc. both run e-commerce sites. Sears recently partnered with Seattle-based Amazon.com Inc. and last week started to broadcast infomercials on its site in a bid to strengthen the business.

HBC and Sears, both based in Toronto, have struggled to make overall financial gains, and analysts say they could be takeover targets.
 

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