Eaton Centre needs a facelift?

[freshcutgrass]

Sears' sweet lease is an Eaton's legacy.

Which should have died when Eatons died (either death). I suppose Sears Can was able to negotiate a great deal considering the spot CF was facing....massive space that would be unlikely to rent to anyone else, and deadly for the whole mall if left vacant.

Of course, if Sears Holdings in the U.S. ever successfully acquires 100% of Sears Canada, and a drastic downsizing of the Canadian HQ follows, a bean-cruncher in the States might to decide to give up the Eaton Centre space if it is losing money. So, things could happen quickly under some scenarios....

Well, Chicago always had majority controlling stock, and can make those kind of decisions at their whim. They have done it in the past...fired the president and killed the "new" eatons just like that.

But they have always been fairly hands-off with Sears Canada, because it has actually always been more financially successful than its parent company.

(not sure where you got the 99% stat - does anyone have the correct figure?), a lot of patrons do drive.

Can't remember where I read the figures, and to be honest, i don't recall the exact number. But even simple number crunching will tell you there is no way that the people who visit the retail part of TEC by parking in the TEC parkades could possibly represent much more than 1% of the 100k or more people every day.

So, even though there are 1300 or so parking spaces at TEC (less than there used to be and many of which are used by office workers...not shoppers), they represent an incredibly small percentage of overall visitors to the retail mall.

Ever tried to get a Pottery Barn rug home on the TTC?

First, I'd have to imagine myself buying something from Pottery Barn. If I could manage to do that (not likely), I would prefer delivery or just shopping at a more car-friendly Pottery Barn location (Yorkdale, Sherway).

 

[TKTKTK]

First, I'd have to imagine myself buying something from Pottery Barn. If I could manage to do that (not likely), I would prefer delivery or just shopping at a more car-friendly Pottery Barn location (Yorkdale, Sherway).

Yorkdale and Sherway are both a good hike from the EC. Just park under Dundas Square (it's cheaper than the EC lot), cruise down to the lowest level, and walk right into the mall without going outside

 

[MetroMan]

You say that as if the Bay were some all-powerful entity. Isn't it true that they're barely staying afloat these days? Who the hell even shops at the Bay anymore? It's hard to think of a retailer with a less cool image.

The Bay @ Queen St. is probably going to disappear. I hate to see that happen even though I don't shop there much but it is a great historical anchor to the corner of Queen and Yonge.

The proof is in the restoration taking place. You'd think that this is good news for the Bay. This new american owner comes in, renovates the store and makes it more attractive like Neiman Marcus in San Francisco.
Well, that vision doesn't make sense because the main floor was slated to see a big renovation (men's and ladies fragrances consolidated into one upgraded department in the current Ladies Fragrance area) but it was cancelled.
It looks more like the new american owner is making the store more attractive to sell.

SEARS isn't doing much better either. Both the Bay and Sears are venues to some of my clients' brands and I see this first hand. I hope that Jerry Zucker has some big plans for this downtown store but you don't need a crystal ball to see that he's preparing to sell this building.

Five years from now, both Sears and The Bay will either be gone from the Queen/Dundas & Yonge areas or will be drastically restructured/downsized.

 

[Mustapha]

I hope that Jerry Zucker has some big plans for this downtown store but you don't need a crystal ball to see that he's preparing to sell this building.

MetroMan,You mean his widow or heirs don't you? Jerry Zucker passed a few weeks back.

http://www.financialpost.com/story.html?id=443416

Do agree with you that we need these downtown anchors. But I don't see much in the way of numbers of shoppers in either the Bay or Sears. Just a seat of the pants opinion.

 

[MetroMan]

Oh wow... I didn't know.

Well, I guess his actions since he bought the company seemed to indicate a road map whose motions were set in place and probably will continue regardless of his passing.

 

[freshcutgrass]

.but why spend all that money to establish a brand identity that is completely at odds with the overall brand identity of the chain?

For the same reason stores like the Gap and Pottery barn kill themselves to put lost-leader retail outlets in the most upscale locations.

Although, I'd call Yonge-Dundas a pretty good image match for the Sears brand...big mass-market labels.

And it isn't just a lost-leader situation for Sears TEC...it's a whole lot better than that...for what other corporations would pay for just giant billboards at that location, they get the billboard...and 800,000 square feet of space to use!.

Even if the store doesn't run a profit, the sheer number of merchandise and revenue the store generates helps their bottom line in terms of buying power, product placement, etc. That massive cosmetics floor alone has huge marketing, sales and profit influence (why do you think it is in the best spot in the store).

Not that it will ever be the same, but during the big sales years for Eatons (the 80's), this single store did an unholy amount of sales...the hidden money-counting department in the bowels of the store probably had more employees than most stores had total employees. Yes, one of my many career moves of the past included managing a department at eatons TEC, so I have a bit of insider info regarding what was not normally known info for what was a private company.

And most stores can only dream of attracting as many potential customers into their store. Sears doesn't even have to try...because of their location at TEC, tens of thousands of "potential" customers walk through those floors getting to and from the main mall and the street/subway entrance.

Given the unique physical, demographic and almost zero-rent situation, you would have to be sub-mental to give up that once-in-a-lifetime gift from a Sears corporate perspective.

 

[Skeezix]

Which should have died when Eatons died (either death). I suppose Sears Can was able to negotiate a great deal considering the spot CF was facing....massive space that would be unlikely to rent to anyone else, and deadly for the whole mall if left vacant.

Not really. Sears stepped into the lease when it acquired T. Eaton Co. Ltd. CF would have loved the opportunity to renegotiate that lease.

Well, Chicago always had majority controlling stock, and can make those kind of decisions at their whim. They have done it in the past...fired the president and killed the "new" eatons just like that.

But they have always been fairly hands-off with Sears Canada, because it has actually always been more financially successful than its parent company.

You are misunderstanding my original point, which was that Sears Canada is unlikely to close this store any time soon now that the head office staff is moving into the unused top floors. The only real likelihood of any quick change is if Sears Holdings does finally acquire all of Sears Canada, one of the objectives of which was to eliminate the cost of a seperate Canadian head office.

Can't remember where I read the figures, and to be honest, i don't recall the exact number. But even simple number crunching will tell you there is no way that the people who visit the retail part of TEC by parking in the TEC parkades could possibly represent much more than 1% of the 100k or more people every day.

So, even though there are 1300 or so parking spaces at TEC (less than there used to be and many of which are used by office workers...not shoppers), they represent an incredibly small percentage of overall visitors to the retail mall.

You're just kind of guessing. As someone who is in the parkade every day, it is full of shoppers. Just because the majority of shoppers arrive by other means do not mean that the centre does not need parking.

In any event, your original point was that the TEC does not need parking and the parkade should be redeveloped. Now you are saying that it is used by the TEC's office workers. TEC isn't just a retail complex - it seems to me that the parking is required at the very least for the office component, even if the majority of shoppers do not arrive by car.

 

[Tewder]

You say that as if the Bay were some all-powerful entity. Isn't it true that they're barely staying afloat these days? Who the hell even shops at the Bay anymore? It's hard to think of a retailer with a less cool image.

I agree that the Bay is not cool or a very enjoyable place to shop...but isn't that the whole point? In latter years Eaton's was terrible too. But this is partly just a reflection of the quality of Canadian retailing overall, which aside from a few notable exceptions is fairly dismal (boutiques excluded)...

I find it hard to believe that Toronto is incapable of sustaining at least one or two good stores. I grant that this tends to be easier in the US or the UK where department store chains benefit from the economies of larger distribution networks and greater store numbers, but I don't see why an American chain opening here wouldn't do as well as elsewhere. The density in Toronto and GTA would allow for a fair number of stores that wouldn't be too far afield from US distribution networks. Besides, it's already happening with smaller chains (Pottery Barn, Crate & Barrel, Abercrombie & Fitch, and on and on) and it wont be too long before some big chains take the plunge.

 

[Tewder]

For the same reason stores like the Gap and Pottery barn kill themselves to put lost-leader retail outlets in the most upscale locations.

Most locations on 5th Avenue or Michigan Ave. are probably lost leaders too, given the rents, but I do see how it adds to the brand image to have a flagship location in a prime retail area that fits nicely with the establishment's image and target demographic. I'm just not convinced that Sear's is the right fit for Yonge Dundas and for me the evidence for this is that the Eaton Centre location is way more upscale than what is typical for the chain. I don't deny they must make money here for other reasons you suggest (signage and advertising etc) but I don't really think the location contributes to their brand recognition overall.

 

[Mustapha]

Most locations on 5th Avenue or Michigan Ave. are probably lost leaders too, given the rents, but I do see how it adds to the brand image to have a flagship location in a prime retail area that fits nicely with the establishment's image and target demographic. I'm just not convinced that Sear's is the right fit for Yonge Dundas and for me the evidence for this is that the Eaton Centre location is way more upscale than what is typical for the chain. I don't deny they must make money here for other reasons you suggest (signage and advertising etc) but I don't really think the location contributes to their brand recognition overall.

I agree that Sears is not the right fit here. They seem to know it too. The shoe department on the ground floor is shameful in look, upkeep and merchandise. The watch department's 'high end' is the Roots brand (or was it Kenneth Cole ).

I can't say I have the answer either. The recycled Eatons was a - what - an 18 month lifespan failure. It's not like Sears didn't try. The launch certainly was a stylish affair.

Looking at smunky's German trip photos I am left wondering if the Eaton Centre gets by simply because Toronto hasn't a European city style pedestrian street. So, the strollers default to walking up and down through the Centre and the stores get their revenue in this way.

 

[TKTKTK]

From the Toronto Eatons Center wiki:

"Redevelopment

The exterior of the Eaton Centre store was designed in the style of the 1970s, intended at that time to be a statement of Eaton's dominance and its future aspirations. However, the "modern" design of this mustard-coloured box has not aged well and is generally considered (from an architectural perspective) to be a poor replacement for the demolished Main Store.[3][5]"

Can someone please re-write this? Source [3] is an old archive illustration of the original buildings, and [5] is HumbleHoward's blog (is that the architectural perspective?)

 

[Dan416]

Everyone: I thought about the Eaton Centre some more and I wonder how many stores or tenants have been there since it opened in 1977? I realize that stores turn over,change names or enter or leave business but which ones have been there for all 31 years of the Eaton Centre? LI MIKE

That's an interesting question. Too bad no one has answered it! I have a feeling the number is probably close to, I dunno, zero.

 

[sketched]

Sears paying $1 in rent for the next 100 years

A friend of mine told me that the main reason that Eaton's moved from their college street location to the Eaton centre in the 1970's was because of the lease terms that cadillac fairview offered them. The terms of the lease were that Eaton's would pay 250K / month for 30 years, then it would drop to $1/year for the next 100.

When Sears purchased the Eaton's brand back in 2000 they retained the same lease rights, so Sears is probably paying $1 / year in rent right now. On top of that they were able to use the tax losses from the bankruptcy which totalled $120 million dollars to extensively renovated the stores. Sears pretty much relauched the new "eatons" for free. Its too bad that they decided to shutter the stores only after 1 year in operation. It is also probably the reason that they decided to sell their Jarvis street location and move the HQ into the shuttered upper floors of the store. The upper floors were pretty much isolated every time I would go up there.

In the 1st year of operation the chain lost $100 million dollars, investors were probably really anxious and it was right around Sept 11th, when the economy started to retreat. This was probably one of the main reasons why Sears no longer decided to say in the "high end" market. My friend also told me that "eatons" tried to get high end vendors such as versace, ferragamo etc (the brands that are sold @ holts and harry) however these brands balked at the idea of sears running the operation even though it was positioned as a higher brand. IMO Sears will probably not sell the TEC location because of their sweet "lease agreements"

 

[MetroMan]

So SEARS will be there until 2100...

 

[freshcutgrass]

A friend of mine told me that the main reason that Eaton's moved from their college street location to the Eaton centre in the 1970's was because of the lease terms that cadillac fairview offered them. The terms of the lease were that Eaton's would pay 250K / month for 30 years, then it would drop to $1/year for the next 100.

When Sears purchased the Eaton's brand back in 2000 they retained the same lease rights, so Sears is probably paying $1 / year in rent right now.

Well, it's actually $1/sqft...but still, practically nothing.

I'm not privy to the CF-Sears deal, but i doubt it was automatic, but rather negotiated. I'm sure CF was so happy to have Eatons revived they would have made any deal. I wonder how they felt about the switch to Sears?

The reason Eatons would have gotten such a lease deal back when TEC was first built, was because Eatons was part owner ( 60% CF, 20% TD, 20% Eatons), as well as the largest tenant and namesake of the project.

The exterior of the Eaton Centre store was designed in the style of the 1970s, intended at that time to be a statement of Eaton's dominance and its future aspirations. However, the "modern" design of this mustard-coloured box has not aged well and is generally considered (from an architectural perspective) to be a poor replacement for the demolished Main Store.

Yea...it was a bit of an odd design, but it would have been better to keep it dead original, than to mess it up with all manner of remodeling. Funny...the Eatons store itself was the only part of Eaton Centre that was not designed by Zeidler...I wonder why they didn't use him?

And I don't know why they destroyed the fantastic Dundas Mall part and left the store itself relatively intact.