The writing has been on the wall for some time. Sears in Canada has been suffering at the hands of the parent in the U.S. for years now. Every chance to modernize the department store was nixed by head office in the U.S. with ever growing demands to send cash south to bail out Sears/Kmart. Shares of the parent company dropped from 73% in 2006 to 10% today. All attempt to stem the downturn in Sears Canada was met with selfish resistance and the money still flowed south.
Sears joined with Kmart in the U.S. but the brand was old and tired and all investors wanted out of the company was the real estate holdings and credit business. The market was changing to more online sales but any re-investment in the company to other areas was quashed.
In Canada stores closed or leases sold back to the malls. The money was once again sent south rather to get Sears Canada better equipped for the new retailing. In Winnipeg and Brandon came the closures of Sears Hometown stores and Sears Home stores and then Sears Outlet store at Garden City.
Sears in 2017 was left with three stores at Polo Park, St. Vital and Kildonan. The big whale and once one of the most profitable stores in the country for the department store was the 270,000 square foot Polo Park store. It was the original anchor in the mall and a major funder that got the place built in 1959.
Polo Park has expanded many times since the 1959 opening and Sears has been a major anchor and profitable for decades there. In 1999, Sears operated the old Eaton’s as owner for a time making it a double anchor. That Eaton’s eventually failed along with the other stores across Canada and HBC became the anchor on the north side.
For a few years now the rumour has been that Sears was going to sell the lease off or go under nationally. Several retailers such as Nordstrom and Simons have sniffed around waiting to see what would happen. It is one of the reasons why new development has not popped up immediately in the recently built Target building north of the mall. Why would a big retailer want to go in there when the 12th largest mall in Canada awaits your arrival?
The last large space to come available Polo Park came as the result of Zellers closure. Rather than looking for a one or two big retailers to take over the spot, the mall reconfigured it into a horseshoe-corridor that added 22 stores including a Disney store.
The Sears location is so enormous covering three times the size. It seems unlikely but not impossible the mall would be convert it to 40 to 60 new stores. Moreover, it is doubtful that Cadillac Fairview wants to leave the space empty for too long into 2018. The competition from Seasons of Tuxedo is not to be taken lightly.
Sears began in 1953 as a collaboration between Simpsons in Canada and Sears, Roebuck. The original sign on Polo Park of the store said Simpsons-Sears for years and was shopped at by many. It was the first credit card many young people ever got. The demise of the store in Canada can be laid at a changing market but hastened by the worst example of branch plant economy management. Selfish, stupid and ultimately self-defeating U.S. demands busted Sears in Canada. In the end it didn’t help Sears in the States either.
There will be 159 people who lose their jobs at Sears in Polo Park. Pensions and benefits have been torpedoed as well as vulture strip off the carcass. Pretty shabby treatment from a once great icon of retailing.
Malls are changing for sure in the face of the new economy but Polo Park is probably going to do just fine re-inventing itself. After all, it once was a horse racetrack. They have changed before.
This has been a editorial by John Dobbin.
To read more from John, visit his blog Observations, Reservations, Conversations
