According to mall management, Saks Fifth Avenue will replace the Sears store at Toronto's Sherway Gardens. Saks will occupy over half of Sherway's 225,000 square foot Sears store location which Sears sold back to landlord Cadillac Fairview in October. Saks is expected to open in the spring of 2016, about one year before the Sherway Nordstrom store which will now open in the spring of 2017.
We've been told by a source at Cadillac Fairview that Sherway's Saks Fifth Avenue will be about 132,000 square feet, even larger than Holt Renfrew's recently announced store at Mississauga's Square One. The same source tells us that Saks at Sherway will feature a 25,000 square foot 'food hall', differentiating it from Holt Renfrew as well as from American Saks stores.
We had initially speculated that Saks would to open shops-in-store within existing suburban Hudson's Bay stores, and this is obviously not the case now for all Canadian Saks stores. In December we noted that the entire 225,000 square foot Sears might be a bit too large for Saks at Sherway, especially as only two American Saks locations are larger than 225,000 square feet, and both are 'urban' flagships, being the Manhattan (646,000 square feet) and Beverly Hills (275,000 square feet) stores.
Sherway Gardens is one of Canada's most productive malls, enjoying per-square-foot sales of almost $900/year according to its landlord. Hudson's Bay anchors the opposite end of the mall from Sears. Other anchors include Holt Renfrew (which is possibly staying at Sherway and expanding) and, in 2017, a Nordstrom store which will be one of two Toronto locations.
Sears will be vacating its Sherway location by February 28th, 2014. Hudson's Bay Company CEO Richard Baker previously discussed opening Saks at Toronto's Yorkdale Shopping Centre, as well. We'll update you when we hear more on this and other possible Canadian Saks Fifth Avenue stores.
Top Image - adapted from a Sherway Gardens rendering provided by Cadillac Fairview
Sources tell us that
could open at Montreal's
Shopping Centre. If talks are successful, it would occupy part of the 181,795 square foot
store that currently anchors the mall's eastern portion.
The 1 million square foot Fairview Pointe-Claire Shopping Centre is owned and operated by landlord
. It features almost 175 stores and is one of Montreal's most productive malls with yearly sales per square foot of $617.
Simons is expanding across Canada and plans to open new stores in
, Ontario. It may also open a
. We'll keep you updated on Simons' Canadian expansion including this possible new suburban Montreal store.
- La Maison Simons' Canadian expansion: Interview with Peter Simons
- La Maison Simons to open first Toronto-area store at Square One, Mississauga
- La Maison Simons to open 2nd Ottawa area store
- La Maison Simons to open at Park Royal in West Vancouver
- La Maison Simons could open at Calgary's Southcentre Mall
Company spokesperson Vincent Power says that Sears will consider selling leases back to mall landlords if the lease sale prices are in excess of the estimated profitability of a Sears store over 20 years. Sources tell us that talks are already under way for several of these Sears stores, and that La Maison Simons could be close to securing one of the Sears store locations.
Since April 2012, Sears Canada has sold back 11 of its store leases to mall landlords for a total of about $762 million. The sale of the first four Sears stores paved the way for Nordstrom's entry into the Canadian market. Sears has since sold back more leases paving the way for even more Nordstrom stores, as well as a La Maison Simons store in suburban Toronto.
A source familiar with the company tells us that Nordstrom currently has no plans to expand by opening stores in the Province of Quebec, at least for now. Nordstrom turned down our request to interview its Canadian President, Karen McKibbin, on this subject.
Industry sources say that talks are already in place between landlords and Sears Canada to sell off more store leases. We'll keep you updated as Sears Canada continues to liquidate its assets.
- Analysis: Sears Canada sells 5 store leases, including Toronto flagship
- More at play as Sears Canada sell off 8 more store leases
- Sears: Parking available for lack of customers
- Sears Canada sells its Yorkdale and Square One leases
- Sears may sell more store leases. Good for Canada.
[Sears Canada website]
Sears Canada has laid off over 1,600 employees, representing more than 7% of its entire workforce. Included in these layoffs are 283 warehouse jobs across Canada as well as 1,345 associate jobs at three customer call Centres in Montreal, Belleville Ont. and Toronto. Call centre jobs will be eliminated over the next nine months, and will be outsourced to IBM.
Sears spokesperson Dan Madge says Sears warehouses affected by the most immediate layoffs are in Calgary, Montreal, Belleville and Vaughan (both in Ontario) and in a Vancouver suburb.
The following is their press release:
[Source: Press release]
[Sears Canada website]
Happy New Year from Retail Insider. 2013 was an busy year for Canadian retail news, and we think 2014 will be equally busy. Here is our top 10 list of Canadian retail news stories, with topics provided by readers. This article is by Retail Insider writer Adam Ramsay.
1) LOBLAW PURCHASES SHOPPERS DRUG MART
One of Canada's biggest retail stories of the year involved a huge corporate takeover. On July 15th, Loblaw announced that it had acquired Shoppers Drug Mart for $12.4 billion in a cash and stock agreement. The deal was groundbreaking as the nation’s leading grocer had acquired the nation’s largest pharmacy chain. Under terms of the purchase, Shoppers Drug Mart will continue to keep its identity and will operate as a new division of Loblaw.
Loblaw also announced in the deal that Shoppers will continue to use an ‘associate owner’ system - one that helped make the chain one of the country’s top 10 most fail-proof franchises. Because of this, no store closing or rebrandings have taken place and none are anticipated. A ‘cross marketing’ of Loblaws and Shoppers signature products, services and loyalty programs has also begun and will continue to expand in 2014.
|Rana Plaza, Bangladesh [Image Source]|
In April, a devastating collapse of an illegally built clothing factory in Bangladesh killed 1,129 people and injured more than 2,500. The factory, Rana Plaza, was used by several well-known inexpensive fashion labels including Canadian retailer Loblaws for its Joe Fresh line. The disaster is now regarded as the world’s worst modern-day industrial tragedy.
The building collapse has led to international discussions over corporate and social responsibility across global supply chains. Advocacy groups have been working on awareness campaigns and accords meant to highlight and fix the terrible working conditions and treatment of Bangladeshi workers and many consumers have revolted against companies that not only have connections to the building which collapsed, but also to those who use Bangladesh factory sourcing in general.
In December, five global retailers who source from Bangladesh, along with other manufacturers and labour groups, created a $40 million compensation fund for victims of the Rana Plaza disaster. Those retailers include Britain's Primark, Spain's El Corte Inglés, France's Bon Marché and Canadian Loblaw.
|Target Canada [Image Source]|
After years of rumours, market research and anticipation, Target - the #2 department store chain in the United States - made its long awaited Canadian debut in March. The company would open up 124 locations from coast to coast in 2013 and with it promised Canadians a “distraction-free” shopping experience with products, brands and loyalty programs much akin to those found south of the border.
Reaction from consumers proved to be a disappointment for Target, as supply issues in many departments left store shelves empty in a problem that is still not fully rectified going into 2014. There was also concern amongst shoppers that the prices found in the former Zellers locations were higher than their American counterparts. In September, Target had to move quickly to correct a nasty PR issue that saw veterans forced outside of their stores to sell poppies for Remembrance Day. Target Canada President Tony Fisher has been adamant that although Canadian operations have been a drag on total company earnings so far, they are committed to growth and will "continue to show positive progress as [they] continue to go forward."
|Lululemon store, Vancouver [Image Source]|
Lululemon has had a year for the ages, but not the kind that they’ll necessarily want to remember. First there was the sheer yoga pants recall that began in late 2012 that cost the company $67 million in lost revenue, affecting almost a fifth of its entire inventory. In June, well-liked company CEO Christine Day, who had lead the brand for more than five years and steered the company through the above mentioned recall, announced that she was leaving.
Perhaps the most damaging PR mishap of the year came in November, when founder Chip Wilson stated in an interview that "some women’s bodies just actually don’t work" with Lululemon pants, when complaints began to grow that the pants are sheer and pill too easily. Wilson quickly came under fire for his comments, and many believe he exasperated the situation by offering an apology that didn’t retract his remarks. Early in December, he resigned from the organization that he himself created.
It’s not all doom and gloom for Lululemon, as sales continue and they enjoy some of the most productive retail space in Canada. The West Edmonton Mall Lululemon location, the company’s highest selling, brings in upwards of $26 million annually with a store of only 3,200 square feet, and that Lululemon stores enjoy average revenues of $1,936 per square foot annually.
|Calvin McDonald, Sears Canada [Image Source]|
It was another rough year for Sears Canada, as in September CEO Calvin McDonald resigned as head of the company that has been struggling to both find itself and keep up with competitors in recent years.
As he moved on to head up the North American operations of Sephora - a French cosmetics chain - Sears continued to actively sell back some of its most valuable leases to landlords in an attempt to secure the much needed capital just to continue its operations.
As the company continues to divest of some of its most valuable assets, it has begun to pave the way for some major new entrants into Canada’s retail space. Upscale American department store retailers Nordstrom and Saks Fifth Avenue (purchased this year by HBC) have already announced plans to open up locations in this country. And with La Maison Simons focusing aggressively on new development outside of Quebec and the long-running rumour that Bloomingdales locations might not be far from a reality in this country, Sears is opening the door to increased competition amongst retailers to allure the type of consumer it has historically tried to attract. 2014 will prove to be a pivotal year for Sears Canada, not just for its long-term success, but for its very survival.
Back in June, Sobeys invested $5.8 billion in a cash deal that saw them acquire Western Canadian grocer Safeway. The deal included hundreds of locations with in-store pharmacies, plus gas stations, liquor stores, manufacturing facilities and a handful of distribution centres and related wholesale business. The Competition Bureau approved the sale in October, but would demand that Sobeys divest of 23 stores in British Columbia, Alberta, Saskatchewan and Manitoba. The move is expected to save Empire (Sobeys parent company) more than $200 million annually in operational costs.
The Safeway acquisition wasn’t the only substantial business move for the company in 2013. In addition to teaming up with Target to supply their new 124 stores with grocery items through the Sobeys distribution network, they have also finalized the purchase of the Shell gas stations in Quebec and Atlantic Canada. There’s been the sell-off of their Theatre business (through parent company Empire) to Cineplex and even the recent opening of the first of their new 'Sobeys Extra' format stores in Burlington, Ontario. In this fall it was announced that long-time company executive Marc Poulin - who became the President of Sobeys in June 2012 - is taking over as the head with the retirement of Paul Sobey.
The summer proved to be a very busy time for North American retail business purchases, takeovers and acquisitions. That was certainly felt by American luxury retailer Saks Fifth Avenue who had seen keen interest from several potential buyers. The Hudson’s Bay Company made its $2.9 billion purchase of Saks public on July 28 by announcing that they will open 7-8 full line Saks and up to 25 'Off 5th' (discount outlet chain) locations in Canada. It was also reported that a REIT could be set up to hold Saks' real estate assets, which are valued at $1.5 billion.
In early December, it was revealed that the flagship location for Saks in Canada will be built on the corner of Yonge and Bloor Streets in Downtown Toronto, and will in fact replace a 342,000 square foot Hudson’s Bay store. Once the more than $100 million renovation is complete and the location opens its doors, it is expected to be the second largest Saks in the world, after the Manhattan store in New York. The arrival of Saks and Nordstrom north of the border, combined with the already existing presence of the likes of Holt Renfrew means that upscale department store retailing will soon to heat up in Canada.
For many, delivery drones may quickly come to mind when thinking about the kind of year Amazon had in 2013. But for Canadians, it’s a different story altogether, as the online retail giant announced its intentions in October to enter into the ultra-competitive Canadian grocery market.
Amazon launched the grocery and gourmet food section on its website on Halloween, offering more than 15,000 different food items including packaged beverages, breakfast foods, pantry supplies and snacks. All major brands are represented on the site, with very competitive pricing. This leaves many in the industry to believe that the already heated Canadian 'grocery war' is about to get even fiercer, and that as a result prices will be driven down. In fact, Amazon believes it already has a pricing advantage on its bricks-and-mortar competitors, citing its 'dynamic pricing' model, which analyzes massive amounts of data to adjust prices in real time on certain items when necessary.
Amazon's move has Canadian grocery retailers taking notice. Loblaws and Sobeys, for example, anticipated the increased competition earlier this year when each made substantial investments in future sustainability by taking over Shoppers Drug Mart and Safeway, respectively. With Walmart’s further expansion into the Supercentre format across the country, and Target’s 2013 foray into the ring, the Canadian grocery industry both in-store and online will no doubt remain the most competitive retail space in 2014.
|Black Friday shoppers [Image Source]|
Black Friday and Cyber Monday, two of the biggest shopping days on the calendar in the United States, have become a major force in Canadian retail as well. This year, more Canadians than ever before shopped in-store and online during these major sales days hoping to find outstanding discounts on products and services. Mall landlords and large national retailers have led the charge, all but forcing businesses of any scale or type to offer their very best prices and offers to compete.
Although more Canadians than ever before took part in the shopping frenzies, the numbers were still lower than anticipated earlier in the year. Part of the blame is thought to be placed on the fact that savings north of the border simply weren’t as attractive as those found in the States. As an example, many retailers offered up to 80% discounts down south, while most of the sales experienced in Canada were only in the 40-50% range, which proved to be not much better than the normal savings found in a typical sale in many stores.
The general belief is that the shopping events will continue to grow in Canada, but proper marketing is needed amongst retailers, and a 'one size fits all' approach will not necessarily work for Canadians.
|La Maison Simons, West Edmonton Mall. Photo: Darrell Bateman (darrellinyvr on Flickr, Image Source)|
La Maison Simons has had another busy year of strategic planning. After opening their first location outside of Quebec in 2012 - a 118,000 square foot store in the West Edmonton Mall - plans have been unveiled that will see the chain expand further into other major Canadian cities including West Vancouver 's Park Royal Shopping Centre, Ottawa (at Rideau Centre and Les Promenades Gatineau) and at Mississauga's Square One Shopping Centre.
La Maison Simons CEO Peter Simons has also identified Winnipeg and Calgary as cities that are ‘on the radar’ of the company, which could see as many as two locations open up in Calgary. He went on to say in an interview with Retail Insider in September, that there is no preference as it relates to urban vs. suburban development, and that all future growth must be “gradual and intelligent” so that the company, which has existed for more than 175 years, can continue to exist for future generations. La Maison Simons currently operates 10 stores in Canada, all in the neighbourhood of 80-100,000 square feet. The highest-selling locations remain inside their home province of Quebec, at Place Ste Foy and Downtown Montreal, though this may change in 2014 as its West Edmonton Mall store continues to see significant sales growth.
Feel free to submit your top choices to our comments section below. You may also post to our Facebook Page and comment to our Twitter Feed.
We found this Sears commercial both amusing and a bit sad for the fact that it states "Sears always has parking." Despite the subsequent shopping spree, the reality is that Sears stores are struggling and more Canadian store closures are likely.
This Bloomberg news article indicates that Sears Canada may choose to close even more store locations. Sources tell us that Sears Canada is likely to announce substantial store closings and layoffs in the New Year, including more suburban store locations than may be initially expected. Sources also indicate that Sears Canada could be sold to a large Canadian retailer in 2014, and we'll update you more when we are better able to confirm this.
(Thank you 'Skeezix' of Urban Toronto for posting this article)
[Sears Canada website]
Sears Canada will likely continue selling off its store leases including those held as joint ventures, according to sources. It just sold off 8 more store leases for a total of about $315 million in the province of Quebec, though these particular Sears stores will be staying open for now. Each of these leases is a 50% joint venture interest that Sears Canada holds with The Westcliff Group of Companies. The purchaser of these leases is Montez Income Properties Corporation.
More interestingly, Sears Canada is seeking to liquidate real estate assets before its possible bankruptcy, according to another source. Page 73 of Sears Canada's 2012 Annual Report provides a list of joint venture leases (see below). Of the 10 joint venture leases that Sears Canada had with Westcliff Group, only 8 have been sold, meaning that Sears could possibly sell two more. The company also has three joint venture leases with landlord Ivanhoe Cambridge, namely for Sears stores at Winnipeg's Kildonan Place, Les Rivières Shopping Centre and Les Galeries de Hull. These three joint ventures are only 15-20% interests that our source thinks could be sold next.
|From Page 73 of Sears Canada's 2012 Annual Report. |
1) The 8 joint venture leases sold to Montez,
2) Two Westcliff joint venture leases, still held at 50% by Sears Canada,
3) Three joint venture leases held by Sears Canada and Ivanhoe Cambridge
A retail analyst further notes that Sears Canada's dividend payouts point to an otherwise gloomy future for the retailer. Keith Howlett of Desjardins Securities mentioned to the Toronto Star that in the first half of 2013, Sears Canada generated a loss from its retailing operations before tax of $56.9 million, while its profit before tax from joint venture real estate investments was $5.8 million. Howlett expects Sears Canada to pay a special dividend to shareholders before the end of 2013, and he estimates it to be as high as $6/share given recent lease sell-backs.
We see these dividends as indicative of a company seeking to cash-out its real estate, rather than a company looking to reinvest profits in a turnaround.
We'll continue to report on the winding-down of Sears Canada, as our source speculates that the company may no longer be in operation by the Spring of 2014.
[Sears Canada website]
Photo: Google Streetview screenshot
has sold five more of its store leases to mall landlords for about $400 million. This creates an opportunity to redevelop these spaces as well as possibly pave the way for more Canadian
Sears has sold its store leases back to its mall landlords in the following locations:
- Toronto:The Toronto Eaton Centre
- Toronto:Sherway Gardens Shopping Centre
- Markham, Ontario:Markville Shopping Centre
- London, Ontario:Masonville Place
- Richmond, BC:Richmond Centre
All of these malls are owned and operated by landlord
except for Richmond Centre, which is co-owned by Cadillac Fairview and
The following is our analysis of what could replace these Sears Canada locations:
Toronto Eaton Centre
The 816,000 square foot crown jewel of Sears Canada's real estate offers plenty of options for redevelopment. We think that
that it would occupy 225,000-275,000 square feet.
Other possible department store anchors include
(which would occupy about 100,000-130,000 square feet) and Bloomingdale's,
in the Canadian market. Saks Fifth Avenue is a further possibility, though we believe Downtown Toronto's Saks
, closer to the luxury shopping area of
and its anchor,
Some of Sears' current Toronto Eaton Centre space could also be subdivided for use by multiple retailers. We'll elaborate soon in an article devoted specifically to Sears' Toronto Eaton Centre real estate.
The top four floors of the store will remain Sears Canada's corporate headquarters, at least in the shorter term. Sources tell us that Sears Canada will continue to utilize its $1/square foot/year lease for this office space (which would have expired in the year 2077), making it far less costly than other available office space.
Sears will be vacating the lower retail portion of this location by February 28th, 2014.
Sherway Gardens Shopping Centre
There are plenty of options to reuse the 225,665 square foot Sherway Sears space. The store could even be demolished for redevelopment, to be replaced by multiple smaller stores and one or more anchor stores. Sherway attracts affluent shoppers and the mall could see
occupy part of the current Sears space, though Saks would likely not occupy more than about 130,000 square feet.
Sherway Gardens is one of Canada's most productive malls, enjoying per-square-foot sales of almost $900/year according to its landlord. Hudson's Bay anchors the opposite end of the mall from Sears. Other anchors include
) and, in 2016,
Sears will be vacating its Sherway location by February 28th, 2014.
Markville Shopping Centre
Markville's Sears store is 130,626 square feet according to its landlord, and we think the store space has limited potential for an upscale replacement anchor store. The mall already features Hudson's Bay and Walmart as its anchors, and the entire mall spans close to a million square feet. Sales per square foot at Markville are only about $490/square foot/year according to the mall's landlord.
La Maison Simons could replace part of Sears' space. The space could also be subdivided for multiple smaller anchors and other stores. We doubt that, given the mall's demographics and sales, Nordstrom, Bloomingdale's or Saks Fifth Avenue will replace Markville's Sears any time soon.
Sears will be vacating Markville by February, 2015.
This 127,205 square foot Sears store is in London, Ontario's most productive shopping centre. The mall, in fact, boasts sales of about $770/square foot according to its landlord. Other anchors include a relatively small Hudson's Bay store (at about 85,000 square feet) as well as a 91,200 square foot Target store.
One could speculate that Sears' space could be replaced by Nordstrom, as the city and store arguably share some of the same characteristics. London is a conservative but relatively well-to-do city whose population could possibly support a Nordstrom. Nordstrom, itself, has been described as being both conservative and upscale. We doubt London would have the quantity of luxury-oriented shoppers to support Saks Fifth Avenue, and we don't expect La Maison Simons to target London in the next several years.
Sears will be vacating this space by February 28th, 2014.
This 122,000 square foot Sears store could be reconfigured into multiple-tenant retail or be occupied by the likes of Nordstrom or La Maison Simons. Richmond has considerable household wealth, despite income statistics that might indicate otherwise. The mall enjoys sales of about $700/square foot, but may require renovations to entice any new upscale anchors.
Sears will be vacating this space by February, 2015.
Further Details on Sears Leases
In the past 14 months, Sears Canada has sold off several of its leases to mall landlords. In the summer of 2012, Sears sold its leases in Vancouver, Calgary and Ottawa,
. Sears subsequently
, resulting in
. Sears also announced
Sears is making a large profit from selling its leases. Its
in the summer of 2012 generated about $170 million. The
gained the company over $190 million, and a
for Sears' Scarborough Town Centre lease could further be realized. This is easy money for Sears, and it leads us to anticipate that more Sears Canada leases will be sold in the coming months.
Sears Canada has sold 5 more leases back to mall landlords to the tune of about $400 million. The Sears locations scheduled to close include:
Toronto: The Toronto Eaton Centre
Toronto: Sherway Gardens Shopping Centre
Markham, Ontario: Markville Shopping Centre
London Ontario: Masonville Place
Richmond, BC: Richmond Centre
We'll be following up this brief article with an extensive analysis of what may replace these Sears stores.
Needless to say, an opportunity has been created for more exciting new retail in Canada, including the likelihood of a flagship Nordstrom store for Downtown Toronto.
[Sears Canada website]
Sears Canada's CEO Calvin McDonald has resigned. He leaves behind a struggling retailer which may now be more open to selling back some of its valuable leases to its landlords, possibly leading to more Canadian Nordstorm stores. Not to mention, the possibility of Sears stores being subdivided or being occupied by the likes of La Maison Simons, Saks Fifth Avenue or Holt Renfrew. The following is our analysis of what could replace several valuable Sears locations.
In the past 14 months, Sears Canada has sold off several of its leases to mall landlords. In the summer of 2012, Sears sold its leases in Vancouver, Calgary and Ottawa, paving the way for Nordstrom's first Canadian stores. Sears subsequently sold two leases in the Toronto area, resulting in speculation that La Maison Simons may move in. Sears also announced a $1 billion project to redevelop its Burnaby BC real estate at Metrotown.
But what about Sears Canada's most valuable retail space? We're referring to the 816,000 square foot flagship Sears at the Toronto Eaton Centre. Calvin McDonald held on to the store, repeatedly saying that its lease wasn't up for sale and that it would continue to operate as the chain's Canadian flagship. With McDonald gone, we think the Toronto Eaton Centre Sears will be sold to landlord Cadillac Fairview for a fortune, and that we'll see it redeveloped to include at least one anchor store (Nordstrom? La Maison Simons?) as well as other smaller retailers willing to pay good money for prominently-located smaller retail spaces.
Sears Canada has other potentially valuable leases that we think could be sold to landlords, possibly paving the way for more Nordstrom, La Maison Simons and Holt Renfrew locations, and other uses. Here's our analysis of some of Sears Canada's more "valuable" spaces:
GREATER TORONTO AREA:
Sears, Sherway Gardens, Toronto: This Sears store is over 225,000 square feet and anchors an entire wing of the mall. Hudson's Bay anchors the other end. Other anchors include Holt Renfrew (which is possibly staying at Sherway and expanding) and, in 2016, Nordstrom which will open one of two Toronto locations. We would expect Sears space to be subdivided and for part of it to be occupied by the likes of La Maison Simons or even Saks Fifth Avenue.
Sears, Fairview Shopping Centre, Toronto: The 149,600 square foot Sears store could be redeveloped into new mall space or could possibly accommodate retail as well as a La Maison Simons store. We don't see Saks or Holt's moving into this mall at the moment. It's interesting to note that, decades ago, Holt Renfrew had a small store at Fairview.
Sears, West Edmonton Mall: This 149,000 square foot Sears would make an excellent location for a new Nordstrom store. And we hear that there have already been talks regarding this possibility. Simons wouldn't be a possibility as it already has a store at West Edmonton Mall which opened last year. Holt's or Saks? We're not sure.
Sears, Southgate Shopping Centre: At 263,000 square feet, this large Sears is positioned in the mall such that it could be easily subdivided into multiple-tenant retail. Part of its space could be used for a department store be it Nordstrom, Holt Renfrew or Saks Fifth Avenue. As a side note, we've heard there are expansion plans for Edmonton's downtown Holt Renfrew so we're not sure if a Southgate location would be considered.
Sears, Le Carrefour Laval, suburban Montreal: This 150,000 square foot Sears store is located in one of Canada's most productive malls, also featuring Hudson's Bay and La Maison Simons. The space could be subdivided or could possibly become Quebec's first Nordstrom store, given that it's the right size.
Sears, Les Galeries d'Anjou, Montreal: This 147,000 square foot Sears store is in a mall that has seen substantial renovations, including a renovated Hudson's Bay store and a La Maison Simons store that opened last month. Its value may lie with its subdivision.
RICHMOND BC: Sears, Richmond Centre: This 122,000 square foot Sears store could be configured into multiple-tenant retail or could be occupied by the likes of Nordstrom or La Maison Simons. Richmond has considerable household wealth, despite income statistics that might indicate otherwise.
CALGARY: Sears, Southcentre: The 234,000 square foot Sears at Southcentre could become part of a mall expansion. Landlord Oxford Properties intends to make improvements to this mall and we're expecting La Maison Simons to open at Southcentre within the next three years (for those reading closely, we just dropped you a hint).
WINNIPEG: Sears, Polo Park Shopping Centre: The 263,000 square foot Sears store could be converted to multiple-tenant retail and part of it could eventually house either a Nordstrom or La Maison Simons. Holt Renfrew might also consider re-opening a full-sized Winnipeg store, though we're not aware of any such plans.
The above list is by no means exhaustive - Sears has other excellent retail locations but we've limited discussion for now. Please keep reading our website, as we'll be watching Sears Canada's real estate closely in the coming months.
[Sears Canada website]
Last month we reported that Macy's could possibly open in Canada by buying Sears Canada. We've got an update which may disappoint - Macy's has no interest either in Sears Canada or in opening Canadian stores.
Macy's has been looking at opening in Canada over the years and has examined numerous possibilities, from buying The Hudson's Bay Company to opening newly-built stores at selected Canadian malls. In the early 2000's, Macy's thought it had secured almost 20 Canadian locations within Cadillac Fairview malls. Negotiations stalled and the deal fell through.
Macy's CEO Terry J. Lundgren says that the company no longer has interest in the Canadian retail market, especially now that so many other American retailers have moved north of the border. Nordstrom will open Canadian stores, Saks Fifth Avenue will open within selected Hudson's Bay real estate, and Hudson's Bay itself is similar to Macy's in many ways.
Hudson's Bay and Macy's are both large-format department stores generally catering to the middle market, with some luxury thrown in for good measure. Some of Macy's flagships carry more comprehensive designer selections. Same for Hudson's Bay. Macy's is spending a fortune to renovate its New York City flagship, and Hudson's Bay is doing the same with its Toronto and Vancouver flagships (though not nearly as much as Macy's $400 million Manhattan store renovation, the most expensive in retailing history).
Canada's population is about the same as the state of California's, and our land mass is huge. Canadians' income and wealth is, on average, slightly above Americans. Our population is, however, generally less likely to display expensive designer labels, limiting most of Canada's luxury retailing to Toronto and Vancouver. We may appear to be a desirable retail market, but we're small, spread-out and more likely to save our money or put it into homes and leisure.
Target is already finding its Canadian business challenging, and Nordstrom has expressed frustration coordinating its Canadian expansion. In hindsight, Macy's might be smart not moving into Canada, at least for now.
We don't expect many more foreign department store announcements for Canada in the next while. La Maison Simons is expanding, Holt Renfrew will spend hundreds of millions on store expansions/renovations, and Hudson's Bay will hopefully increase spending on store renovations to bring stores into the 21st century. Buying Saks Fifth Avenue may have been what Hudson's Bay needed for an update, and we'll report more on this soon.
So don't expect Neiman Marcus or Barney's New York to open in Canada, though if they did, we'd be first in line for their openings.
Sears Canada has been struggling and has already laid off a substantial number of employees. A couple of days ago, it let go 245 Canadian employees and announced that it was moving some of its IT, finance and payroll operations to India and the Philippines. We noticed that this announcement didn't come as part of a "broader strategy" for Sears. In fact, it's just more cost cutting. And this cost cutting, in our opinion, looks more like a retailer trying to make itself attractive for a takeover than a retailer trying to turn itself around.
Readers may remember that it was originally Sears Canada's selling back some leases that led to Nordstrom's coming to Canada. Sears also recently sold back three prime Toronto area store leases, possibly opening the door for La Maison Simons in Toronto.
Several insiders tell us that morale at Sears Canada is low, both in its offices as well as its stores. We encourage everyone working at Sears Canada to hang in there, as there may be new positions coming available at some new, exciting retailers.
[Sears Canada website]
Sears' American website is selling a $32,000 Rolex watch and a pair of Chanel boots marked down to 'only' $897. It's an interesting strategy for Sears, as the retailer struggles to maintain customer interest.
Items are listed on the website's 'Marketplace'. It should be noted, however, that these items are sold by third-party vendors who pay Sears a commission of up to 20% on items sold, plus a $40 per month fee. These items are not technically in Sears' own inventory.
Some shoppers might question if these items are real or counterfeit. If we were in the market for Rolex or Chanel, we're not sure if we'd buy it online from Sears.
Nevertheless, the appearance of Rolex and Chanel products on Sears' website is a far cry from what's actually in store. We're not sure if this marketing tactic is smart or misguided, and we'd hope Sears doesn't let anything 'slip by' like, say, pornographic material or something else potentially controversial.
Our source for this article is this Wall Street Journal article.