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Macy’s won’t buy Sears Canada, according to a Macy’s spokesperson. Speculation arose that Macy’s would buy Sears Canada, after Sears revealed that it’s considering selling its Canadian operations. Other purchasers are possible and although Sears Canada continues to occupy some valuable retail space, most of its best store locations have already been divested.
On an analyst conference call yesterday, Macy’s CFO Karen Houget noted that Macy’s won’t open in Canada, reiterating what CEO Terry Lungren said late last year. Macy’s is interested in international expansion, however, and Ms. Houget indicates that Macy’s could open in China. Macy’s operates its mid-priced namesake stores, as well as its more upscale Bloomingdale’s division.
It’s clear that Sears Holdings wants to sell Sears Canada, given that it has already hired an investment banker. Sears Holdings currently owns 51% of Sears Canada.
Sears Canada’s Canadian operations include: 113 department stores, 48 big box Sears Home stores, 234 Hometown (rural) stores, over 1,400 catalogue and online merchandise pick-up locations, 11 outlet stores, 97 Sears Travel offices, as well as its repair and service network. Of its department stores, 14 are owned outright while the rest are leased.
Other possible Sears Canada purchasers include Canadian Tire, British fast-fashion chain Primark, and American discounter Kohl’s. Seven of Sears Canada’s top locations were already sold off, including several key flagship locations. Several former Sears stores will become Nordstrom locations, with Nordstrom’s first Canadian store scheduled to open in Calgary this September. Saks Fifth Avenue will also occupy about 130,000 square feet in part of the former Sears at Toronto’s Sherway Gardens. Sears Canada still occupies several prime store locations, and we’ll discuss those further, tomorrow.
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If no one buys Sears, I could see it just collapsing and going out of business. Given that the top real estate is already gone, any new entrant would have lower-level locations primarily to start with. It may just be real estate space that goes unoccupied…and many malls may lose their top (and, in many cases, only) anchor store.
Macys would be crazy to want to be up here considering the beating target has gotten and Nordstrom’s soon to come rude awakening.