The timing for the re-introduction of retailer Zellers in the Canadian retail landscape couldn’t be better, says Madeleine Nicholls, Senior Managing Director, Vancouver Brokerage and National Retail Brokerage Lead for Canada for Colliers.
As Zellers opened a number of its first locations within Hudson’s Bay in Ontario and Alberta on Thursday, there was a buzz in the air about something new, albeit an old brand, opening for business at a time when other retailers such as Nordstrom are closing their doors in Canada.
“I’m pretty excited about it,” said Nicholls. “I think it makes sense on a number of levels. There was so much goodwill I think associated with that brand – nostalgia, recognition. I love that the Hudson’s Bay is the oldest retailer in Canada from 1670. I just love that and the fact they’re bringing back a concept that resonates with so many Canadians.
“I think the timing is excellent. I don’t know that they could have necessarily foreseen last year when they made the announcement exactly what would be happening in the spring of this year but their timing is excellent.
“It’s the combination of a few things. We’ve still got high inflation. Consumers are still feeling the brunt of all those interest rate hikes if they have mortgages. So people are feeling the pinch in the pocketbook all over the place. And this is a brand (Zellers) that they have said is going to lead with design and value. So that’s a wonderful thing. That’s exactly what Canadians are looking for. Canadians are a middling bunch. Some will buy the luxury. For sure, there is a market and a demand for that. But by and large if you look across Canada or at Canadians, and you look at that sweet spot of consumer, call it 25 to 55 years old with families and kids, they are looking for value buy especially now.”
Nicholls said she loves the idea that Zellers is being reintroduced as a store-in-store concept. It could be a test run for the brand for something bigger in the future.
“I think it makes a lot of sense because they can execute very quickly on it. The other thing that’s great is they’re launching zellers.ca, an ecommerce platform at the same time, and they’ve already got the Bay ecommerce and all that so probably a very natural kind of extension or add on. I think they’ll be very successful at that,” she said, adding that Zellers is a recession-proof brand.
“And there’s this other nod. They’re going to be able to supply all Canadians in all markets. I love that that’s also a nod to the nostalgia. The original Hudson’s Bay fur trappers have been around since 1670 that were trading in the most remote areas of Canada and I hope Zellers can also provide great products, design-led value priced to the northern regions of Canada. I think it’s a great story.”
In a LinkedIn post, Bruce Winder, author of RETAIL Before, During & After COVID-19 and President of Bruce Winder Retail, said: “Checked out the new Zellers store format Thursday at 7am . . . I was impressed with the vibe as the store reminds me of a combo of IKEA , Miniso and Joe Fresh. Biggest challenge will be getting enough traffic post launch to add material sales and earnings to Hudson’s Bay Company.”
The Ontario and Alberta Zellers within Hudson’s Bay locations are:
- Erin Mills Town Centre, Mississauga
- Burlington Mall, Burlington
- White Oaks Mall, London
- Scarborough Town Centre, Scarborough
- Pen Centre Shopping Plaza, St. Catharines
- Cambridge Centre, Cambridge
- Rideau Centre, Ottawa
- St. Laurent Centre, Ottawa
- Cataraqui Town Centre, Kingston
- Kingsway Garden Mall, Edmonton
- Medicine Hat Mall, Medicine Hat
- Sunridge Mall, Calgary
Over the first opening days, the Zellers Diner on Wheels will visit different store locations.
The retailer has plans to open 25 stores within existing Hudson’s Bay locations. Zellers as Canadians knew it ceased to exist in March of 2013 after the Hudson’s Bay Company sold most of the store leases to Target and shuttered a majority of the stores — the remaining two Zellers-branded stores shut in 2020.
The retail sector in Canada has been hit hard with bad news recently with the shuttering of stores such as Nordstrom, Nordstrom Rack, Bed Bath & Beyond and Buy Buy Baby. But at the same time, new concepts have entered the marketplace as well as companies expanding.
Nicholls has looked at how many retailers have opened recently versus how many have closed. And the results are surprising.
“It’s astonishing because it’s about three times more opening than closures yet the mind seems to gravitate towards these closures and these closures stick in the mind and they become the talking point. But people forget, hang on a second, there’s this whole new wave of retailers that have survived and thrived,” she said.
“We tracked 624 news articles since March 2020. 94 retailers said they were closing, 22 said they were at risk, 501 said they were growing, and seven said they were keeping their spaces closed.
“It tells you that people’s minds stick on the negative and not on the positive. The good is completely lost. There’s been a period of change of course – necessity-driven change because retailers did have to adapt to e-commerce when the physical stores had to close. But that has really done well for them because now that the physical stores are open, you have the e-commerce platform, omnichannel. That’s a winning formula.”
Nicholls said she took a walk to the flagship Nordstrom store in Vancouver the other day when the retailer’s liquidation sale began. The place was packed. She counted close to 400 people on the ground floor.
“And you know why? Because Canadians being a value-loving bunch, could smell blood in the water and they’re looking for the deals,” she said. “I just thought how interesting. They announced they’re leaving and they’re the busiest they’ve ever been.”