Sears Canada has announced that it will close 11 of its stores across the country, as the company continues to fight for survival after filing for bankruptcy this summer. Several of the announced locations are in significant shopping centres, providing opportunities for redevelopment. Of the 11 announced locations, 10 are full-line Sears stores, and one is a Sears Home Store. Leases will be returned to their respective landlords.
The company announced the store closures in a press release on the evening of Friday, September 29, also noting that the company has also entered into an agreement of purchase and sale relating to its Garden City Shopping Centre location in Winnipeg, and has entered into a lease transfer agreement relating to the small-parcel fulfillment centre in Calgary. As part of the store closures, an additional 1,200 people will lose their jobs.
The 10 full-line Sears Canada stores announced for closure include the following:
–Nanaimo North Town Centre, Nanaimo, BC
–Brentwood Town Centre, aka ‘The Amazing Brentwood’, Burnaby, BC
–Orchard Park Shopping Centre, Kelowna, BC
–CF Polo Park, Winnipeg, MB
–CF Lime Ridge, Hamilton, ON
–Oakville Place, Oakville ON
–CF Fairview Mall, Toronto, ON
–Scarborough Town Centre, Toronto, ON
–CF Fairview Pointe-Claire, Montreal QC
–Avalon Mall, St. John’s, NL
As well, a separate Sears Home Store will also close at Kelowna’s Orchard Park Mall.
Landlords will need to identify opportunities to fill these locations, at a time when some are still struggling to tenant spaces vacated by Target in 2015 — Target shuttered all 133 of its Canadian stores when it exited Canada after suffering considerable financial losses. Several of the malls announced above are actually very strong centres, according to Retail Council of Canada’s Shopping Centre Study (the 2017 report will be released in November). The following is a discussion of the malls where Sears is closing, including challenges and opportunities.
Nanaimo North Town Centre, Nanaimo: The 600,000 square foot mall will lose its only major fashion anchor with this closure. Other anchors include Lowe’s, London Drugs, and a freestanding Canadian Tire store.
Brentwood Town Centre, Burnaby: Now being overhauled and rebranded as The Amazing Brentwood, it was unclear if Sears would have remained as a tenant here regardless — the centre is being positioned as being more upscale, in partnership with L Catterton group, the private equity firm associated with French luxury conglomerate LVHM. While luxury brands will be added to the expanded centre, landlord SHAPE says that there will be retailers at a variety of price-points.
Orchard Park Mall, Kelowna: Kelowna’s leading mall will lose one of two fashion anchors — Hudson’s Bay will continue to operate in the centre. Sears operates a fashion store and a separate Sears Home store in the mall, which is also anchored by Sport Chek and Best Buy.
CF Polo Park, Winnipeg: This could be a blessing in disguise — CF Polo Park is one of Canada’s most productive malls, according to Retail Council of Canada’s Shopping Centre Study. Sears’ occupies 263,240 square feet of space in the centre, and its space could be developed to house more productive retailers, as well as to add new retailers currently not available in the Winnipeg market.
CF Lime Ridge Mall, Hamilton: Hamilton’s leading mall is seeing exceptional gains in productivity, and its 143,640 square foot Sears space could provide redevelopment opportunity that could include adding some retailers that are currently not available in Hamilton, such as Zara. Sears occupies a strategic location at the end of the mall adjacent to a large H&M store. Other anchors at CF Lime Ridge include Hudson’s Bay, Home Outfitters, and Sport Chek.
Oakville Place, Oakville: RioCan’s Oakville Place will lose one of two major fashion anchors — Hudson’s Bay will remain in the centre, along with H&M, Sport Chek and an upscale Pusateri’s Fine Foods store that opened in the summer of 2016. Oakville is one of Canada’s wealthiest communities, located between Toronto and Hamilton.
CF Fairview Mall: The Toronto mall is one of Canada’s most productive, with annual sales per square foot close to $1,000. Hudson’s Bay is the mall’s other major anchor, with 152,400 square feet of space over two levels, and the mall also features a large Cineplex Cinema. In the past, rumours circulated that Saks Fifth Avenue would replace Sears’ 149,550 square foot space in the mall, though nothing is confirmed.
Scarborough Town Centre, Toronto: The popular and highly productive mall, located at the heart of Scarborough, is also anchored by Hudson’s Bay and Walmart. Sears occupies a 231,500 square foot space in the busy centre. A couple of years ago, La Maison Simons’ President Peter Simons revealed that he was negotiating to open in the mall, though the retailer has slowed its plans to open new stores, instead focusing on renovating existing locations while opening a new distribution centre. Nordstrom was also said to be a contender to move into the mall as part of its Canadian expansion, though Nordstrom has also halted opening full-line stores in Canada as it begins the rollout of its Nordstrom Rack banner in Canada in early 2018.
CF Fairview Pointe-Claire, Montreal: The suburban Montreal mall will lose its largest anchor when its 181,800 square foot Sears location closes. Hudson’s Bay is the mall’s other main fashion anchor, with smaller anchors including Winners, Déco Découverte (Home Outfitters), Best Buy, and Sports Experts.
Avalon Mall, St. John’s, NL: This is unfortunate news for the mall, and the city — Sears is currently the primary fashion anchor at the mall, with 129,000 square feet of space, with Winners and Cineplex also anchoring the productive centre. St. John’s has a metro population of just over 200,000 people, and it lacks a Hudson’s Bay store — Sears is the only traditional department store left in the city, though smaller retailers and off-price stores will continue to operate when it closes.
Court approval is required prior to store liquidations, and the closures will result in 1,200 job losses. That’s in addition to 2,900 previously announced job losses, when Sears closes 59 smaller stores this weekend. About 12,000 people continue to remain employed with Sears Canada.
Sears Canada filed for bankruptcy protection in June of 2017, following comments that it had “significant doubt” about its future as a retailer. The company is seeking a buyer, though it’s unclear who would purchase the company in its current form. In the press release, it was revealed that S.L.H. Transport Inc. is acquiring part of Sears Canada’s Home Improvement Business, and Sears Canada is otherwise seeking an extension of the stay period of its CCAA protection to November 7, 2017, from October 4.
Sears Canada executive chairman Brandon Branzl reportedly stepped down as head of the company to launch a bid for the insolvent retailer in August, with plans to reduce its store count with a goal to return it to profitability.
For more on this story:
–Sears Canada to ask court for more time to close deal with chairman (Marina Strauss, Globe & Mail)
–Sears Canada to close 10 more stores, including Fairview and Scarborough locations (Francine Kopun, Toronto Star)
–Sears Canada to close 10 more stores, including Lime Ridge Mall location (Hamilton: The Spec)
–Kelowna Sears store closing (Castanet)
–Sears planning to close Polo Park store (Winnipeg Free Press)
– Sears announces it will close Nanaimo North Town Centre store (Nanaimo News Bulletin)
–Sears to surrender lease to Avalon Mall store (The Telegram)