Sears Canada Launches New Off-Price Strategy [Feature]

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Sears Canada has launched a new designer brand off-price concept called ‘The Cut’, which features designer brands at 30% to 60% off regular prices. 

Sears will carve out about 20,000 square feet in each Canadian Sears store for its new ‘The Cut’ off-price division. The Cut will be evenly split between apparel and home goods. While The Cut’s planning, marketing and back-office operations are based in Toronto, Sears has also added a team of seven buyers in New York City.

The Cut officially launches in Canada on April 1, and it will eventually be rolled out to all 94 Sears Canada locations.

The Cut’s eCommerce website launched last week, and it features a wide range of designers, all at discounted prices. Men’s Versace ties are featured on the main page, and upscale women’s designers such as Joan Vass and Catherine Malandrino are carried in the women’s section. Sunglass brands include Tom Ford and Gucci. None of these brands were previously carried in Canadian Sears stores. Various home goods designers are also featured on the eCommerce site, with Laura Ashley bedding currently at 50% off.

The Cut offers designer labels at a discount in a manner similar to competitors under the TJX Companies banners (Winners, Marshalls and HomeSense) as well as Hudson’s Bay Company-owned Saks OFF 5TH and Nordstrom Rack.

TJX has been aggressively expanding its Winners, Marshalls and HomeSense banners across the country. The latest round of expansions was partly made possible by the exit of Target from Canada in 2015 as well as Best Buy’s discontinuation of the of Future Shop banner, providing large amounts of retail space that have been repurposed to house some TJX nameplates. TJX has said that it plans to eventually operate about 100 Marshalls locations in Canada, up from about 60 to date. Winners now has more than 250 stores Canada-wide, while HomeSense operates just over 100 locations.

Hudson’s Bay Company division Saks OFF 5TH, which entered the country with its first stores about 12 months ago, plans to operate 25 Canadian stores by the end of 2018. Nordstrom’s off-price concept Nordstrom Rack will also enter Canada in early 2018, with plans to operate between 10 and 15 locations in this country.

Sears Canada is taking a page from U.S. retailer Macy’s off-price strategy, which includes opening discount Macy’s Backstage locations within some existing Macy’s locations. At the same time, Canada’s Hudson’s Bay has but just one Hudson’s Bay Outlet left in existence (at Premium Outlets Montreal), while Holt Renfrew will shutter its two-store off-price ‘hr2’ division this summer. 

The Cut also offers Sears the opportunity to further expand off-price retail into mainstream shopping centres, where Sears Canada operates many of its stores. Off-price retailing in malls isn’t new (TJX and Saks OFF 5TH operate locations in several major Canadian malls), though many off-price units are located in outlet centres, strip plazas and big-box retail centres. 

Sears Canada unveiled its new, simple ‘bold’ logo in the summer of 2016, featuring upper-case black lettering and a maple leaf outlined in red. In September of 2016, Sears unveiled its new ‘WTS’ simplified store format with polished concrete floors and a smaller floorplate. The company also disclosed that it was looking to partner with complementary retailers, including grocers, to open stores by carving out space within existing Sears Canada locations.  

Article Author

Craig Patterson
Located in Toronto, Craig is the Editor-in-Chief of Retail Insider and President/CEO of Retail Insider Media Ltd. He is also a retail analyst and consultant, Director of Applied Research at the University of Alberta School of Retailing in Edmonton, and consultant to the Retail Council of Canada. He has studied the Canadian retail landscape for over 25 years and he holds Bachelor of Commerce and Bachelor of Laws Degrees.

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