Those who are old enough can vaguely remember the excitement when a glossy new Sears catalogue arrived in the mail (it was discontinued back in 1993). Of course, those were much better days for the now failing department store, which got its start in 1893.
Though Sears fought a long and hard battle, the onetime mall staple just couldn’t compete in the 2000s retail climate.
The company filed for Chapter 11 bankruptcy on October 15 2018, listing $6.9 billion in assets and $11.3 billion in liabilities. It announced it would close an additional 142 stores by the end of the year (which have now presumably closed their doors), in addition to 46 stores that were to close by November of last year. Of course, this didn’t come as a huge surprise to anyone.
For the past decade, Sears – once the largest retailer in the U.S.– has experienced declining comparable sales, as well as annual losses since 2010. In response to slumping sales, Sears began to close stores in the past ten years, and had shuttered nearly three-quarters of its stores when it announced its bankruptcy filing.
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So, what went wrong?
A handful of things, it appears. While it focused on the home in its early days, some point to a diversification into other products and services as contributors in the company’s gradual demise.
Sears ventured into insurance in 1931 and stock broking and commercial properties in the 1980s. In his book “The Hard Road to the Softer Side: Lessons from the Transformation of Sears,” former Sears CEO Arthur Martinez blamed the diversification for a loss of focus for the brand.
Sears lost its title as the largest retailer in the U.S. to Walmart in the early 1990s, thanks to Walmart’s wider variety of goods at lower prices and a culture of educated consumers with options. At the same time, people began to turn to places like Home Depot, Target, and Costco for their home needs.
Instagram/ @mitcheleno
Though the emergence of online shopping has undoubtedly impacted the store closings, Sears was actually an early adopter of the online world, introducing the sale of everything from electronics and home appliances to toys on sears.com in 2000.
This was just eight months after online retail giant Amazon started to expand its offerings from books, to include computer goods, home improvement items, and video games. By this time, job cuttings and store closings had already become commonplace for Sears in order to maintain profitability.
In recent decades, attempts to keep with the competition included things like the rollout of Internet cafes in 2006 and 2007 in some 100 locations.
Sears also attempted to adopt a “store within a store” model of business, an initiative that began with the purchase of retailer Lands’ End, which Sears owned from 2002 to 2014. Clearly, the model didn’t stick.
Sears merged with a failing Kmart in 2005 to become Sears Holdings in an $11-billion dollar deal that was engineered by Wall Street hedge fund billionaire Eddie Lampert, who took control of Sears in 2013, becoming its CEO. Today, many people blame the billionaire for the company’s bankruptcy, citing the lack of sense it made for Sears to buy another retailer who was not doing well. In the decade following the merger, Sears really began to slide.
Instagram/ @sears
Lampert’s clearly failed strategy was to cut costs and sell the real estate occupied by underperforming stores.
The problem was, according to experts, that he didn’t invest this to rebuild the business. While the company was valued at $11 billion on the stock market at the time of its merger, by October 2018, it was just $37 million. He stepped down from his role as CEO at this time, but remains chairman and Sears’ largest shareholder and has stated publicly that he wanted to save the company.
Some point to the rise in online shopping and the shift away from the mall for the demise of Sears. But it hasn’t seemed to hurt Canada’s forever-iconic Hudson’s Bay Centre. While stores like The Bay have made efforts to upgrade the in-store experience to retain foot traffic, Sears stores became almost dingy and in need of repair.
The arrival of big name department stores Saks Fifth Avenue and Nordstrom to Canada in recent years likely added more competition in the country.
There are no more Sears stores left in Canada as of January 2018.
Instagram/ @noticiastelemundoAs if the abandoned stores across North America weren’t enough, Sears saw the departure of some of its largest longtime vendors in October 2017, including Maytag, KitchenAid, and – most notably – Whirlpool, which Sears started selling in 1916.
While Sears is still in business – with some 425 locations still up and running in the U.S. – the company is clearly holding on for dear life.
On Monday, January 14, a bankruptcy court held an auction that pitted Lampert and his over $5-billion offer (made by ESL Investments, the hedge fun run by Lampert) against companies wanting to sell Sears for scrap value. While Sears’ creditors and independent board members want to shut down operations of both Sears and Kmart, Lampert wants to keep the existing stores up and running, saving roughly 50,000 jobs in the process.
At time of writing, the winning bidder was yet to be announced. Either way, it generally doesn’t look good for Sears, as the company remains on life support. So, if you have Sears gift certificates collecting dust, you may want to cross the border and spend them ASAP.
Featured image: Instagram/ @pthibz
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As you know, many retailers filed for bankruptcy at a record rate and the trend continues. According to Retail Dive, by December 2017 we saw 26 major retail bankruptcies (defined in this case as companies with more than $50 million in liabilities). That surpassed the 20 bankruptcies posted in 2008 when a major recession ravaged the sector. Take a look at the retailers that have filed plans to restructure, find a buyer or liquidate through Ch. 11.
Disclaimer: MANY of these only affect the retail in the United States.
1. Nine West
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2. Claire’s
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3. The Walking Company
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4. KIKO Milano
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6. A’gaci
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7. Sears
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Source: Retail Dive
Recent headlines predict the end of traditional retail stores, but what is really going on? We’ve all seen the huge players, from Sears to HMV, shuttering their windows, while others, such as Le Chateau, have shrunk in size. Even the king of Canadian retail, Hudson Bay, our oldest and now only traditional department just teamed up with WeWork to turn their empty spaces into temporary offices. And many malls are converting into condos.
But now for the good news on the retail horizon. According to the Financial Post, even with Amazon’s takeover of retail, there are still many signs that the traditional retail market is not declining, but only being reinvented. Just look at all the impressive Canadian newcomers in 2017: Moose Knuckles, Hunter, Woolrich, and Miniso. Lululemon, our star of athleisure, has not only grown in sales, but increased the number of stores in the U.S., U.K., Canada, and Australia, and opened 3 stores in the fashion capital of Paris. Canadian icon Roots is also on an upswing, opening new stores in the U.S. and Canada, and renovating and enlarging existing stores. And other popular brands, such as Aritizia, H&M, Mackage, and Canada Goose, are expanding throughout Canada.
What two trends are causing the positive uptick in Canadian retail sales? Pop-up stores in malls and street fronts, and stellar brands, such as Mackage and Canada Goose, are opening their own stores instead of being sold at department stores and high-end boutiques. These new stores have reinvented retail with their diverse selections and have made shopping fun again. According to Noah Stern, President of Moose Knuckles, which just opened their store in Yorkdale, “a standalone store allows the company to showcase a breadth of alternative styles and promote the brand in a way that is different than what traditional retailers do.”
“There’s a transformation in retail, not an apocalypse. A lot of retailers are still doing great, such as HBC.” – Edward Sonshine, top real estate CEO
According to Edward Sonshine, top real estate CEO,”There’s a transformation in retail, not an apocalypse. A lot of retailers are still doing great, such as HBC.” As retail gets more competitive, retailers are coming up with new strategies. Other experts note that in Canada, unlike the U.S., there are less empty store spaces this year than last, even considering the exit of Sears, and predict that sales will increase even more in 2018. So say bye bye to the doomsday retail news.
Source: The Financial Post
Do you agree that it’s too early to say goodbye to traditional retailers? Let us know in the comments!
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This year has been a tough one for retailers. Stores that have been around as long we can remember have shut their doors due to lack of sales. As previously mentioned, the decline in department store purchases has led to the demise of many businesses. With so many people preferring to shop online, there’s less need for malls. This has vastly changed the overall retail landscape. Instead of wading through the crowds at department stores, people are able to shop without the hassle on their phones while traveling on a bus or passing time in a waiting room. According to Global News, millennials are teaching the older generation how to use these new technological advances. “Speeding up the learning process when it comes to new shopping venues is the rise of the millennial generation and the fact that four out of 10 young people, these days, are still living with their parents,” noted Kruh.
Below, we’ve summed up the biggest store closings in Canada in 2017:
1. Sears
2. Bebe
3. BCBG
4. hr2
5. Express
7. HMV
10. Le Chateau
Are we missing any major retailers who have closed locations in Canada this year?
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Failing malls are turning into prime condo real estate projects. With the high number of store closures, it’s the most beneficial way to keep revenues up for property owners. This might mean massive changes for department stores. Canadian mall owners seek to capitalize on a supply-constrained housing market while minimizing their vulnerability to the struggling retail market. They are creating new mixed spaces, with specialty stores, restaurants, and residential units. According to RioCan REIT, Canada’s largest property trust, this will create lively, well-located neighborhoods as well as foster a community and ensure safer spaces. “The population is growing and there’s no real land left in Canada’s biggest cities,” states RioCan Chief Executive Ed Sonshine. “Demand for retail space isn’t growing…it makes perfect sense on so many levels.”
According to the Financial Post, developers, such as RioCan REIT and the property units of some Canadian pension funds, are turning major lands that have not been put to best use historically into housing in one of the world’s priciest, supply-constrained residential markets. This includes lands containing parking lots and low-rise retail stores.
RioCan is creating ePlace in Toronto, a development with about one-fifth of the retail space typically in its other malls, 1,100 condos and apartments, and some offices. The development is expected to be finished by early 2019, and the condos have already been sold. Buyers and owners of other malls are also joining in.
Did you know that the most productive mall in Canada is Yorkdale Shopping Centre? According to a Retail Council of Canada study, the mall received $1,653 in sales per square foot for the year ending June 30. In addition, the owner of Oxford Properties plans to add as many as 1,496 residential units, offices and a hotel. “Oxford is betting that better public transit and technological changes, such as autonomous vehicles, will reduce demand for parking,” said Bradley Jones, head of retail at Oxford.
With the recent closings of big retail outlets like Sears and Target, real estate owners are rethinking how to plan and change their properties in the future.
Source: Financial Post
What do you think about these changes? Let us know in the comments!
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After Sears Canada announced this fall that they were liquidating all their operations across the country for good, we were heartbroken to hear that thousands of employees lost their jobs.
Today, on the ruins of what once was one of the most successful retail giants in American history, a group of 25 Canadian companies have come together to open a 150,000-square-foot, two-story mega liquidation centre in Markham to sell Sears inventory direct to the public.
The new outlet will not only help sell thousands of items of orphaned Sears inventory but also will hire many ex-Sears employees to help run the outlet, making it a win-win solution that serves both parts.
“Aside from the tremendous pain to employees, pensioners and vendors who have lost millions of dollars as a result of Sears’ bankruptcy, customers have lost a reliable source of high-quality merchandise and many vendors lost their largest customer,” said Ari Starr, the founder of Bobby’s Liquidation Outlet and one of Sears’ former suppliers.
Bobby’s Liquidation Outlet offers clothing, accessories, leather goods and jewelry to toys, bath, bedding, kitchenware and home decor items, with the exception of appliances at deeply discounted prices. Visitors can also find such brands as Armani, Columbia Sportswear, Dolce & Gabbana (D&G), Gucci, Cavalli, Moschino and Dsquared – at bargain prices.
According to the official news-release, sample bargain prices at Bobby’s Liquidation Outlet include $9.99 for Sears’ Jessica Brand dresses, $59 for Columbia Sportswear winter jackets, $49 for designer jeans from D&G, Gucci, Dsquared, 40-50 percent off socks and undergarments, $14.99 for a four-piece set of twin or queen sheet sets ($15.99 for king sets), and much more.
The outlet located at Steeles Avenue and Highway 404 at 2900 Steeles Avenue will also surprise vintage lovers with a 3,500-square-foot Antique & Vintage Market, featuring vintage furniture, lamps, appliances and jewelry at below market prices.
Good news is that by purchasing any item at the outlet sale you will also support people with special needs, as a portion of the profit will go to organizations supporting people with disabilities, including Thornhill-based DANI, Yachad and Reena.
What do you think about Bobby’s Liquidation outlet? Let us know in the comments.
Featured image: Bobby’s Outlet
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Every day it seems like another chain retail store is struggling to stay afloat in Canada. We’ve seen some of our favourite retailers close their doors so far in 2017. Whether the closure is a result of increased competition or aggressive expansion, we are disappointed when we lose beloved brands and employees are put out of work. Keep reading for a list of all of the major retailers that closed locations in Canada this year (so far).
HMV
At the start of 2017, struggling HMV announced the closure of all of its stores. While we were sad to see this music and movie mecca close, it’s understandable that the retailer could not compete against endless streaming services. Since closing 102 stores in April 2017, at least 70 Sunrise Records stores have popped up in former HMV locations.
Bebe
In March 2017, ladies apparel retailer Bebe announced the shutdown of 170 stores (including eight Canadian locations,) in an effort to reduce expenses and focus on online sales. Given the sameness of this women’s fashion retailer, was anyone really disappointed to see Bebe close their doors?
BCBG
We were surprised in March 2017 when upscale women’s fashion apparel and accessories brand BCBG announced the closure of all 51 Canadian locations. Fashion-forward BCBG ladies wear can still be purchased through major department stores including Hudson’s Bay and off-price retailers like Winners.
EXPRESS
May 2017 saw the demise of Express as they announced the closure of 17 Canadian locations. The Canadian marketplace proved to be all too difficult for Express, as they decided to not only close stores but also discontinue Canadian operations through its subsidiary, Express Fashion Apparel Canada.
Gymboree
In July 2017, children’s retailer, Gymboree announced the closure of 350 stores in an effort to restructure after filing for Chapter 11 bankruptcy, like so many other struggling brands.
Teavana
Starbucks announced in July 2017 that it would be closing all 379 Teavana stores (mostly located in shopping centres.) Landlords and employees are angry! Lucky for customers, Teavana products can still be purchased at any Starbucks location.
Shoes.com
No retailer (or e-tailer) is safe… In January 2017, Shoes.com announced the shutdown of all operations including two physical retail stores in Vancouver and Ontario. While we weren’t surprised to see this brand fold (given the heavy competition in the footwear market,) it is impressive how long they dominated the online shoe market for.
Sears
Sears Canada is closing forever. After serving Canadians since 1953, Sears Canada announced in October 2017 the closure of all Canadian operations and the start of liquidations sales across the country. Attempts to restructure and reinvent the Sears brand over the past 18 months failed miserably, leaving Sears with no choice but to close all remaining full-line Sears, Sears Home and Hometown locations.
Are you sad that these retailers closed store locations in 2017?
Featured image: Cristina Avila
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Sears Canada Wants to Liquidate All of its Remaining Stores
Unless you’ve been living under a rock, you have heard that Sears Canada has filed for bankruptcy and announced that they planned on liquidating their stores. A video appeared on youtube showing what the liquidation process was like and let us tell you it looks out of control.
The overall theme of the video is that if you were planning on checking out Sears Liquidation sale, especially at Fairview Mall, don’t waste your time. Items have been picked over and we haven’t seen madness like this almost ever. The store looks like it has been looted not liquidated.
In the words of low-brow television – You’ve gotta see this.
As you definitely have already heard, Sears Canada is preparing for its departure from the Canadian market. While it’s sad to see another retailer with a deep rooted history in Canada depart, a bigger concern for customers is the fact that everyone has been left in the dark with respect to the status of warranties, gift cards and Sears Club points. But in Sears’ latest press release, the company let customers know exactly what’s going to happen.
Here’s where it gets pretty shitty for customers who have shopped with Sears. According to their new policy, if you have purchased appliances from Sears in the past and bought an extended warranty, you are going to be out of luck. Sears announced that they will no longer be in a position to honour any Sears Protection Agreements after October 18th. According to Sears, if you have purchased an extended warranty in the last 30 days, you will be able to get a full refund, so make sure you check your receipts. If you purchased an item in the last year, the one-year warranty will still be applicable but you will have to go directly to the manufacturer to make a claim.
If you have a Sears Gift Card (thanks, grandma!), obviously don’t wait long. The good news is that you will be able to use the gift card during Sears’ liquidation process. Although it should be obvious when Sears Liquidation process is over and the stores have closed, you will not be able to redeem your any gift cards.
Sears will begin its liquidation process on October 19th.
We can’t say we didn’t see this coming.
According to a recent report from CBC, Sears Canada wants to liquidate its remaining stores and assets. The retailer plans to seek court approval and hopefully begin the liquidation process as soon as mid-October. The news comes just a week after announcing they would be closing additional stores, including two in the GTA, on top of the 59 stores they closed earlier this year.
“Sears Canada, with the recommendation of its advisers and approval of the monitor, FTI Consulting Inc., is seeking an order to commence a liquidation that would result in a wind-down of its business following court approval,” Sears Canada said in a release. “The company deeply regrets this pending outcome and the resulting loss of jobs and store closures.”
If Sears Canada receives court approval, the liquidation would begin no sooner than October 19, and continue for 10 to 14 weeks.
We’ll keep you updated as the story develops.
Are you surprised that Sears Canada will be closing?
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