Sears Canada Concentrating on Small Markets: Good News for Nordstrom?

Sears Canada will concentrate on rural and mid-market communities for future growth. These markets provide less competition and, according to Sears Canada CEO Calvin McDonald, will allow Sears to grow like it did initially in its 1950's Canadian inception.

Granted, this isn't the 1950's. But is Calvin on to something? And will Sears Canada give over more prime retail space for Nordstrom's Canadian expansion?

An industry insider speculates Sears will concentrate on smaller markets and suburbs while selling-off its larger downtown and some prime suburban space to increase cashflow. This could pave the way for more Canadian Nordstrom locations. This is speculative and Calvin McDonald, himself, says he wants Sears Canada's flagship location to remain at the Toronto Eaton Centre.
Toronto's Yorkdale Mall includes a 190,000 sq ft Sears. Nordstrom wants it. Image: Wikipedia

An insider at Oxford Properties expressed frustration with Sears' lack of cooperation in releasing some prime leases, including Sears' Yorkdale Shopping Centre location. Nordstrom is said to want it, and Oxford wants to deliver. Yorkdale recently went through a major expansion as we previously reported.

Sears might just become a successful retailer. Sears Canada is using its credit card database to study past consumer spending. It hopes this information will direct it to target shoppers and increase sales.

Sears Canada's customer database was initiated in 1953 and includes about 4.5 million credit card holders. Analysis led to the re-introduction of Sears' Jessica fashion line, and management hopes further analysis will be able to determine consumer wants and needs, including the requirement for a new bed mattress or new shoes, for example.

Sears Canada is struggling financially, and its CEO Calvin McDonald wants to make it profitable by 2014. This is a tall order considering that Sears has reported losses for the past 12 quarters.

Sears CEO Calvin McDonald. Possibly describing Dolly Parton. Image:
Sears is still either #1 or #2 market-share retailer in Canada for such product categories as bed mattresses, women's dresses, men's formal wear and major appliances. At the same times, Sears is significantly reducing its concentration of electronics and toys, deferring to strong Canadian competitors.

We are watching Sears Canada closely, as it may still be a viable Canadian retailer. At the same time, we're rooting for Sears to give up prime retail leases so Nordstrom, Simons and other interested retailers can comfortably continue their Canada-wide expansions in a market with limited retail space.

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