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Sears Canada (1952-2017)

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Admiral Beez

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IMO, Sears Canada as we know it will be gone by end of 2014. The value of Sears is not in its real estate holdings or leased mall locations, but is in its brands (Die Hard batteries, Kenmore appliances and service/support, Craftsman tools, Discover credit card, Allstate insurance, Lands End, etc.)

Sears Canada will divest itself of its real estate and leased properties, abandon the malls, and for fashion concentrate on e-commerce via its Lands End brand. Furniture will only be sold through the Sears Home centres. Craftsman tools are already being sold via Costco, and Consumers Reports suggests that Kenmore may follow, see http://news.consumerreports.org/app...lling-craftsman-will-kenmore-soon-follow.html. DieHard batteries will soon follow.

Mark my words, Sears Canada as an anchor store in malls is toast. The whole concept is toast. My family buys everything except food on-line or at Costco or other stand-alone stores (vs. malls). By 2020 the Eaton Centre and other big malls will be in big trouble.
My prediction above is moving along, though my 2014 date is more likely 2020.

My family will continue to buy nearly all our clothes at Sears' Lands End on-line division. Now that part of the company is well run.
 

Skeezix

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Sears Canada could disappear by 2014. It's not improbable that the U.S. parent will sell its 51%, paving the way for someone else to acquire the whole of the company and to either rebanner it or to sell it for scrap.

If Sears does survive in Canada, it will be as a less prominent retailer in second-tier suburban malls. It will have figured out how to fill that niche well. Big "if", though.
 

DaninToronto

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If they stick with mid sized cities and suburbs then they really expose themselves more to the Targets and Walmarts. Although given both of them are looking to expand into downtown areas, maybe Sears sees the writing on the wall. I bet we will see a Macy's move in to take some of the leases from Sears with Square one going to Holt Renfrew. Target would be stupid to go into STC and Square one with Walmart already there and I think Yorkdale is too high end. For them to buy Sears leases back, Oxford must have something planned like Cadillac Fairview did with Nordstrom.

Would be nice to see smaller Sears stores in areas that lost Zellers and didn't get Target or where other big department stores aren't represented.
 

Johnny Au

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If they stick with mid sized cities and suburbs then they really expose themselves more to the Targets and Walmarts. Although given both of them are looking to expand into downtown areas, maybe Sears sees the writing on the wall. I bet we will see a Macy's move in to take some of the leases from Sears with Square one going to Holt Renfrew. Target would be stupid to go into STC and Square one with Walmart already there and I think Yorkdale is too high end. For them to buy Sears leases back, Oxford must have something planned like Cadillac Fairview did with Nordstrom.

Would be nice to see smaller Sears stores in areas that lost Zellers and didn't get Target or where other big department stores aren't represented.

That is what Lawrence Square is for. It lost Zellers, Target is not going there, and Sears would not move too far from Yorkdale.
 

DHLawrence85

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The latest company rumoured for Sears leases is Simons. They could probably split the Eaton Centre site with Nordstrom.
 

samsonyuen

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ShonTron

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Target does seem to be going in, but not a bad idea for similar spots: http://www.riocan.com/Content/PDF/sitePlan/98A.pdf

While on the topic, what would Scarborough Town Centre draw for Oxford (if exercised)? I'm not sure it has the same cachet.
I passed by Lawrence Square last Saturday and saw no sign of construction/conversion to Target, unlike the first batch of stores that proudly announced the new tenant months before opening. Is it simoply Target still has the lease (not sold to Wal-Mart or elsewhere) and isn't using it?
 

TOareaFan

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Oxford could now turn around and sell the leases that it is buying back from Sears selling to Nordstrom, industry observers suggested.
This is a bit of a sloppy piece of writing from the G&M. Oxford will not turn around and sell the leases....they will, however, re-lease the space.

Essentially what is going on here is landlords being far more pro-active after seeing HBC make a huge pile of cash selling leases to space that is owned by them. The value in those Zellers leases was that they were at low rates for long terms in prime real estate.....letting another retailer fill the space while the outgoing retailer made the profit cannot sit well with landlords.....after all, the real estate belongs to them and they should be the ones profiting.

So, with Sears ailing and seeking cash and other prospective tenants looking to this market for good/prime locations, the landlords are being more proactive and are willing to, essentially, pay Sears to leave so that they can then present the space to the new retailers on current market terms/conditions. The $2B "mark to market" exercise that was the Zellers/Target transaction was a painful and expensive lesson for these retail landlords that they are not keen to repeat.
 

bAuHaUs

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This site was one of the second wave of Zellers locations they acquired. This batch of sites may open sometime in 2014. Target still has to formally announce what they plan on doing with about 26 locations across Canada (they own the leases on these, and may transfer in bulk to another retailer - e.g., Walmart's 39) or convert to Target in 2014-15.
 

Skeezix

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I missed this "death spiral" piece last week. Also, includes most hopeful comment I have seen thus far that Sears is just waiting for the right offer to vacate the Toronto Eaton Centre.

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Sears Canada’s ex-CEO says chain is in ‘death spiral’

Simons joins Nordstrom in pursuit of the locations that landlords are buying back


Marc Weisblott
Canada.com
Published: June 18, 2013, 3:00 pm

Following word that Sears Canada would close at least two stores in the Toronto area, presumably due to demand from shopping mall owners to bring in more desirable tenants, one former chief executive is speaking out about its failure to connect with consumers.

Mark Cohen, an American who ran the department store operations north of the border between 2001 and 2004, lambasted the CEO and majority owner of the U.S. operation during a Tuesday interview with Bloomberg News.

“Sears is slowly and steadily failing at the hands of a ruthless, methodical asset-stripper,†Cohen said of Eddie Lampert, who has been widely lambasted for his management style, including restructuring moves likened to a losing game of Jenga.

“Lampert will come up with some cash every quarter or two to make sure the balance sheet is still viable,†added Cohen. “It’s a tragedy because Sears is a legacy brand that needed to be and could’ve been repositioned.â€

The retail operations in Canada — a public company with 51 per cent of shares owned by Sears Holdings — were in a relatively unflattering spotlight last week as northern CEO Calvin McDonald confirmed that it would sell back its leases for anchor locations in Yorkdale Shopping Centre in Toronto and Square One Shopping Centre in Mississauga and close them by next spring.

An option for a similar deal was signed with Toronto’s Scarborough Town Centre.

The arrangement promised a cash infusion for the company and has also boosted its stock. But the prevailing assumption was that Sears was no longer the kind of big-box tenant that these malls were looking for when other retailers are eager to take the space.

Nordstrom, the higher-end U.S. department store which will move into former Sears spaces at the Pacific Centre in Vancouver, Chinook Centre in Calgary and the Rideau Centre in Ottawa, was expected to make a bid to take over at least part of the vacated Yorkdale and Square One locations.

Yet the Quebec-based Simons has expressed similar interest in those locations via a report published by the Toronto Star.

Much curiosity surrounds the fate of the prominent Sears store at the Toronto Eaton Centre in downtown Toronto — one of several that was abruptly rebranded after a failure to keep the more prestigious Eaton’s name intact after the bankrupt department store chain was acquired in 1999.

“We haven’t had any discussions that are progressing to suggest we would be exiting,†McDonald told the Globe and Mail in response to ongoing speculation about the coveted location, which doesn’t mean they wouldn’t happen soon enough.
 

Skeezix

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Has anyone noticed any improvements when shopping at Sears? Does anyone shop at Sears? Or did they ship their customers overseas too?
======

Sears Canada sees progress as ‘transformation’ hits half-way point

The Canadian Press

Published Wednesday in The Globe and Mail, Aug. 21 2013, 7:24 AM EDT

Last updated Wednesday, Aug. 21 2013, 8:12 AM EDT

Sears Canada Inc.’s second-quarter revenue was down 9.6 per cent from the same time last year, and it would have lost money except for a one-time deal, but the struggling national retailer says its transformation plan is beginning to pay off.

The national retailer’s overall revenue for the 13 weeks ended Aug. 3 was $960.1-million, down from $1.06-billion a year earlier.

Part of the revenue decline was a reduced number of locations but same-store sales were also down 2.5 per cent.

Sears would have posted an $11-million loss during the quarter except for an agreement to vacate two Toronto-area stores by next March.

Sears Canada, a publicly traded subsidiary of Sears Holdings Corp., reported Wednesday that its net income was $152.8-million or $1.50 per share, including an after-tax gain of $164-million.

Excluding the one-time gain related to giving up leases at two to three stores in Toronto and Mississauga, Sears would lost 11 cents per share. Its loss a year earlier was $9.8-million or 10 cents per share.

On Tuesday, Sears said it is cutting 245 jobs, mostly at its head office in Toronto, and moving some of the work overseas. The reductions will affect 138 of the jobs in its information technology department, 99 in finance and eight in payroll.

Sears Canada let go 700 workers across the country earlier this year in a bid to “right-size” and restructure its business. About 360 of those jobs were from its department stores, and another 300 from the distribution centres. The remaining cuts were to head office and other support areas.

“This period marks the half-way point of our three-year transformation plan, and although we have much work to do, we are starting to see progress, thanks in large part to our 29,000 associates coast to coast who are continuing to plan and execute strategies that are designed to drive increased consideration for Sears as a shopping destination of choice for Canadian families,” Sears Canada CEO Calvin McDonald said Wednesday in the second-quarter earnings report.

“The success we are seeing in the merchandise categories where we have focused most of our transformation efforts continues to be an indication that Canadians are responding positively to the changes they are seeing at Sears.”

McDonald emphasized the results from its apparel and accessories business, although that was offset by decline in its home and hardlines business – especially home furnishings, mattresses and home electronics.

“On a broader basis, we reduced total expenses by 10.3 per cent in the second quarter this year versus the second quarter last year, as management continues to adjust to revenue trends,” McDonald said.

About 200 of the latest cuts at Sears are in the Toronto area, 38 are in Montreal and six in Belleville, Ont.

Sears said the workload will be transferred to “external third-party providers whose business expertise includes updated systems and processes that can more efficiently perform the work involved.”

While the company didn’t provide a specific breakdown on how the work will be re-assigned, spokesman Vincent Power said a “contingent of workers” will be in Canada while the majority of the IT work is expected to be done in the Philippines and the majority of the finance and payroll work in India.

Employees were notified of the cuts Monday and will leave during the next three to six months.
 

Skeezix

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And why do companies use the term "right-size"? Makes them sound like douchebags and it is so insulting to the people given pink slips. If you are laying people off, have the decency to admit that the company is downsizing.
 

Torontovibe

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I bought a TV from the Sears in the Eaton Centre, three weeks ago. They did not have it in stock, so they had to order it for me. Delivery was to be Sept. 19th. (it states that right on the recite) I go to pick it up on the 19th and surprise, it's not there. I was told it would come in Fri or Sat and that they would call me. Saturday comes and no call. So, I call them.

Before anybody orders something from Sears, please call their number 416-349-7111 and see how good their customer service is and how well their dysfunctional phone system works. It took me over an hour to track down someone who said they could help me. He promised to call me back SOON and tell me if my TV was in. I waited but no phone call.

On Sunday I called 4 times and was disconnected each time. It took a very long time to finally reach a manager. He promised to check and call me back in 10 minutes. Again, no phone call. I call back and could not even get ahold of a real person.

So, now it's the 23rd and I'm still calling Sears to find out where my TV is and so far, not a single person seems to know. I'm waiting for another call from a manager. Who wants to place bets that I won't get that call.

Before you order something from Sears phone the number I posted and then you can decide if it's worth your time and the frustration. You would think after being in business for over 50 years, that they would have designed a phone system that actually works. If they can't even figure out that, how the heck can they run a store/company? Sheesh!

I'll never make that mistake again.
 
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James

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^ Thanks for sharing your experience. Stories like these need to be passed along so that us, as consumers, can decide where to take our business.

As an aside, I walked through the Sears in Promenade Mall up at Bathurst & Centre St in Vaughan not too long ago. The first thing I noticed, as expected, was how empty the entire place was. There were individual attendants in their designated departments who literally had nothing to do. Some were on their personal phones, texting or e-mailing. Others were just sitting and waiting for customers. It was actually a very sad image and I felt bad for the organization. I don't know how much longer they can sustain their current business model.
 

NorthYorkEd

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The "warehouse sale" at Square One location was hopping last Sunday. Place was a disaster zone; lineups everywhere, merchandise all over the floors, racks in disarray. I almost thought I had gone back in time to a Zellers. ;)
 

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