5 Years Since Sears Canada Shut All Stores [Retrospective]

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It was five years ago this month that Sears Canada shut down all of its stores, resulting in millions of square feet of vacated retail space and the loss of nearly 12,000 jobs. The final Sears Canada stores shut on January 14, 2018. 

The impact on Canada was profound, with many malls losing an anchor store and the loss of a chain that had been in the country for decades. That included a network of physical department stores as well as a catalogue business that became so successful that it put a major competitor’s catalogue — Eaton’s — out of business.  

Chicago-based Sears entered the Canadian market in 1952 when it struck a joint venture with Toronto-based Simpsons department stores. New co-branded Simpsons-Sears stores expanded across the country, as well as a national mail-order business that became the iconic Sears Catalogue, including its popular Christmas ‘Wish Book’. 

The Hudson’s Bay Company purchased Simpsons in 1978, and the Simpsons-Sears joint venture was dismantled when HBC sold its shares to Sears — in 1984 Simpsons-Sears was renamed Sears Canada while in 1991 Simpsons stores were decommissioned, with some becoming Hudson’s Bay stores. 

Former Sears Canada flagship store and headquarters at CF Toronto Eaton Centre in downtown Toronto. Photos via Wikipedia
Image: Sears Canada

In 1999, Sears Canada made a bold move and acquired department store chain Eaton’s, which was facing bankruptcy, and attempted to revive it under a new concept. That included a new store model with upscale brands and the efforts were a failure with Eaton’s 2.0 shutting down in 2002. 

ESL Investments was the largest shareholder of publicly-traded Sears Canada. Eddie Lampert is chairman and CEO and also leads the US division of Sears which has almost no stores left in operation as of press time. ESL also owns US-based Kmart which is now on its last legs. 

As early as 2016, Sears Canada was a pretty big business. The retailers had a network of 140 corporate stores (including full-line, Sears Home, and Sears Outlet stores), 71 Hometown stores, over 900 catalogue, and online merchandise pick-up locations, 69 Sears Travel offices, and a nationwide repair and service network. The Sears Catalogue was published until the last quarter of 2016 and offered online shopping at sears.ca until October 2017. 

Sears Canada filed for creditor protection in June of 2017 and immediately announced that it would lay off 2,900 employees and shut 20 full-line locations, 15 Home stores, 10 Outlet stores, and 14 Sears Hometown stores. A series of further store closure announcements culminated with the October 10, 2017 announcement by Sears Canada that it would seek court approval to shutter all of its remaining stores in Canada and lay off 11,240 remaining staff. The Ontario Superior Court granted the Order and liquidation sales began on October 19, 2017. Store fixtures and equipment from the closed stores were sold until January 26, 2018.

The last day of Sears at CF Fairview Mall in Toronto. Photo: wyliepoon via Flickr

In December 2016, Sears Canada announced plans to add grocery sections in three-to-five remodelled stores in 2017 — the selection would be primarily organic, with a focus on low cost and e-commerce, and none of these efforts gained traction to save the business.

Prior to its bankruptcy, Sears Canada CEO Brandon Stranzl put forth further efforts to revive the chain, which included smaller more modern looking stores as well as a new set of lines which were showcased in a pop-up retail space on Queen Street West in Toronto. The efforts were ultimately unsuccessful as the retailer continued to flounder amid negative consumer sentiment. 

Prior to the bankruptcy, Sears Canada sold some of its best leases to landlords in return for hundreds of millions of dollars. That move helped Nordstrom enter the Canadian market with its first store opening in September of 2014 in a former Sears location at CF Chinook Centre in Calgary. Nordstrom subsequently opened in former Sears Canada store locations in Ottawa, Vancouver, and Toronto including at the CF Toronto Eaton Centre where Sears Canada’s 800,000 square foot flagship once stood. Other leases were sold in other malls and other retailers moved in. At Square One in Mississauga, La Maison Simons occupies part of the mall’s former Sears box after the retailer sold that lease back to the landlord. At CF Sherway Gardens in Toronto, a Saks Fifth Avenue and Sport Chek occupy a former Sears store that was once Eaton’s.

After its demise, former Sears boxes across the country have been re-tenanted, which often involved demising space and reconfiguring former department stores for multiple retailers. One recent example is at Southgate Centre in Edmonton — the former Sears store in the mall (once a Woodward’s) is now home to London Drugs and Sporting Life

In 2017, some mall landlords quietly told Retail Insider that they were not unhappy at the demise of Sears Canada — the shuttering of the retailer meant that some covenants could be lifted on shopping mall properties. Many Sears Canada leases, some of which were legacy leases from former department store retailers, included covenants restricting what landlords could do with their properties where Sears was located. Fast forward to today, Canada has become a global leader in shopping centre site intensification that includes the addition of residential uses in an effort to create ‘complete communities’, with the Toronto and Vancouver markets leading the way for theses redevelopments.

Craig Patterson
Craig Patterson
Located in Toronto, Craig is the Publisher & CEO of Retail Insider Media Ltd. He is also a retail analyst and consultant, Advisor at the University of Alberta School Centre for Cities and Communities in Edmonton, former lawyer and a public speaker. He has studied the Canadian retail landscape for over 25 years and he holds Bachelor of Commerce and Bachelor of Laws Degrees.

4 COMMENTS

  1. I worked for Eaton’s 2.0 (or the “aubergine eatons”, as we called it) from start to finish, which was such a fascinating experiment to see unfold from the inside. I remember when the announcement was made that the Eaton’s division was being discontinued in favour of Sears, a customer had defaced an in-store notice with the words: “They are closing the wrong one”. I agreed then and I agree now, as Eaton’s had successfully managed to attract the young, urban professionals that Sears struggled to connect with, despite its flaws. That being said, Sears’ new format and merchandising mix at the end was promising. It’s unfortunate that we’ll never see how that would have played out.

  2. For someone like myself who grew up in a home where every other item had a Kenmore lable and an extended warranty on it , to watch the slow agonizing death of Sears Canada was pretty tough.
    What was hardest though was the disgraceful way the staff were treated while the company went through its final death throws. My father and the other long term employees who had been proud to wear a Sears name tag must have turned in their graves.

  3. I stumbled across this article while writing my own memoir piece relating to the Calgary “eatons” (Eaton’s 2.0) store. We went through several months of training before the store ever opened. We were given a sort of “elite” level of expertise in the brands we were meant to represent, sales training, security training, nose to the grindstone back room logistics, management training for people who would eventually be let go after the NYE sale. Sears was a MONSTER company, incapable of pivoting. Incapable of seeing Mr. Water’s vision for a “High End” luxury retailer. I’m still sold on the idea. Hell, what kind of company could IMAGINE Sear’s generic “NEVADA” brand being placed in the same space as Hilfiger, DKNY, Tommy Bahama, Silver, Lucky, JM Underwear, etc.? Nope, simply incapable of “Getting it”, they threw the entire concept away because it didn’t fit their “Culture of Logistics”. Canadians can be pretty “snooty” at the best of times. As CHRIS above stated, “The WRONG Sears” was closed. Decades of marketing and retail experience later, I agree. Some might say that, “At least we still have Holt Renfrew”, but the last I checked, theirs is still a pretty elitist marketplace which is having a difficult time dealing with the internet. Yeah, luxury will always have its place. But, like those young up and comers in Beijing promising their beautiful brides to be a REAL BURBERRY brand scarf as a wedding gift, Canada’s fashion wannabes will still have to travel elsewhere to find something a little less …. Canadian.

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