News: Sears Closes Flagship at Toronto Eaton Centre

Struggling retailer closes flagship Toronto store.

Sears Toronto Eaton Centre

This past Sunday Sears Canada closed the door on its Toronto Eaton Centre location, making way for Nordstrom which will open on the site in 2016.

Sears acquired the store in 1999 with its purchase of the bankrupt T. Eaton Company. It operated the store under the Eatons banner until 2002 when it converted the location to Sears.

The struggling department store retailer has been selling store leases as it reorients itself towards a suburban customer. Last year Sears announced it would be vacating their Toronto Eaton Centre store as part of a $400 million sale of store leases to Cadillac Fairview. Also closing this week was the Sears location at Sherway Gardens. Stores at Square One and Yorkdale will close next month.

Below are the flagship store's final days.

Sears Toronto Eaton Centre as seen from Yonge-Dundas Square

Looking into the escalator well on the lower level, Sears Toronto Eaton Centre

The counters are gone at the main level jewellery department, Sears Toronto Eaton Centre

Closing down the main level's cosmetics department, Sears Toronto Eaton Centre

All cleared out on the second level, Sears Toronto Eaton Centre

The empty escalator landing on the second level, Sears Toronto Eaton Centre

Looking for new homes, mannequins await shipment to other Sears stores

Countdown to the end at Sears Toronto Eaton Centre

Everything's for sale including the doors

The road ends here, though Sears corporate offices will remain at the store's uppermost floors

News: Nordstrom to open at Toronto Eaton Centre in 2016

American department store Nordstrom to occupy key retail site.

Sears Toronto Eaton Centre - Yonge Street Facade

This morning Cadillac Fairview confirmed the much speculated new tenant of the Sears location at Toronto Eaton Centre will be Nordstrom.

"We're excited to be coming to downtown Toronto at Toronto Eaton Centre," said Karen McKibbin, President, Nordstrom Canada in the official announcement. "We want to serve those who live and work downtown as well the many visitors to the city and think Toronto Eaton Centre is a great place to do so."

Construction will begin in March and will reconfigure the space into a three-level 213,000 square foot full line Nordstrom store. The new store will open in the fall of 2016 along with locations at Yorkdale Shopping Centre and Sherway Gardens. The first Canadian store opens this fall at Calgary's Chinook Centre, with locations in Ottawa and Vancouver opening in 2015.

Sears Toronto Eaton Centre - Mall Entrance

"We are excited to welcome Nordstrom to Toronto Eaton Centre," said Wayne Barwise, Executive Vice President, Development, Cadillac Fairview. "Over the past three years we've spent $120 million in enhancements to Toronto Eaton Centre. This second phase of redevelopment will include an additional $400 million. We are delighted to have Nordstrom be part of this exciting venture as we continue to bring a premier urban retail shopping experience to the city."

Sears announced last year that they would be vacating their Toronto Eaton Centre store in February as part of a $400 million sale of store leases to Cadillac Fairview. Sears obtained the site with its acquisition of Eaton's in 1999 and has operated it as a Sears for over a decade with mediocre results.

Nordstrom will occupy the main level as well as the second and third floor, according to WWD. The lower level will be divided into other retail (a second lower level was similarly reallocated after Eaton's closed). The lower level features a central area dubbed the "Well" where escalators feed into the rest of the store. This could provide an interesting point of entry from the lower level into the new Nordstrom.

Sears Toronto Eaton Centre - Lower Level "Well"

Sears will continue to occupy the upper floors where it maintains its corporate offices. The embattled retailer sold their 222 Jarvis Street head office to the Ontario government in 2007 and converted the upper levels at their Toronto Eaton Centre location into office space. Sears was reportedly paying annual rent of $1 a square foot. This legacy lease was inherited from Eaton’s which co-developed the site with landlord Cadillac Fairview. The store has been steadily shrinking since opening in 1977 as a nine level 1,000,000 square foot Eaton's flagship.

[Click here for the official press release.]

News: Sears Confirms Details of $400 Million Deal

Sears flagship at the Toronto Eaton Centre

As Toronto Shopkeper reported yesterday, Sears Canada confirmed today the sale of 5 store leases in a transaction worth $400 million.

Sears will close their Toronto Eaton Centre, Sherway Gardens, and London-Masonville locations by February 28, 2014. A year later they will close their stores at Markham's Markville Shopping Centre and Richmond Centre in British Columbia. In total 965 associates will be affected by the closures. Sears has said qualified associates could be offered positions in other stores. All the malls in question are owned by Cadillac Fairview (except Richmond Centre which is co-owned with Ivanhoe Cambridge).

"Unlocking the value of assets is one of the three levers we have said we will use as a way to create total value for the Company," said incoming Sears CEO Douglas Campbell.  "When proposals such as this one are presented to us, we must weigh the value of the transaction against the value we will obtain from continuing to operate those stores in their current locations.  In this case, we were presented with an opportunity that gives us a significant financial benefit without changing our plans to improve the business and make Sears more relevant to Canadians. Our primary focus of creating long-term value for the Company is best approached by focusing on the basics of the business and continuing to become more relevant with Canadian consumers coast to coast."

Last month former Sears CEO Calvin McDonald resigned from the retailer in the midst of a three year planned turned around. McDonald focused on key product categories and shed store leases to some high profile Sears locations. Today's announced closings combined with those previously announced mark the company's retrenchment from some key urban markets.

"The Company will operate 111 full-line department stores after Sears vacates these five stores," continued Mr. Campbell, "which continues to be a substantial retail presence across Canada, especially in suburban and mid-size markets where Sears plays a major role in the marketplace."

When Sears acquired the bankrupt T. Eaton Company Limited in 1999, it gained entry to a number of prime urban spaces. Prior to that the retailer had operated primarily in suburban markets. The Toronto Eaton Centre and Sherway Gardens stores were both former key Eaton's stores and Sears was reported to have inherited their advantageous lease rates.

There has been intense media speculation about the future tenant (or tenants) of the Eaton Centre location with both Nordstrom and La Maison Simons being touted as most likely.

As part of the deal Sears will retain the upper four floors of the Eaton Centre location where it maintains its head office.

It was also reported today that Sears Canada's struggling US parent Sears Holdings is considering spinning off their Lands' End and Auto Center businesses.

[Click here for the official press release.]

News: Sears Selling Additional Store Leases

Toronto Eaton Centre and Sherway Gardens locations to close in 2014.

Sears flagship at the Toronto Eaton Centre

October 29th Sears Canada will officially announce that it has sold additional store leases to some of its highest profile locations.

Sears has come to an arrangement with Cadillac Fairview to sell a total of five store leases, three are in the Toronto area: Eaton Centre, Sherway Gardens, and Markville Mall. Last year it sold leases to several high profile locations paving the way for Nordstom's entry into Canada.

The Eaton Centre and Sherway Gardens locations are slated to close in February 2014, with the Markville location closing in 2015. The official announcement was delivered to Sears employees.

Last month it was announced that Sears CEO Calvin McDonald was resigning from his position at the retailer (he has since been named head of Sephora Americas). During his time at Sears, McDonald refocused on key product categories and shed store leases to such ionic Sears locations as its Vancouver Pacific Centre store. However he was reluctant to vacate the flagship location at the Toronto Eaton Centre (where the retailer also keeps its head office and for which it paid a very low lease).

In a recent Globe and Mail article, incoming Sears CEO Douglas Campbell confirmed that Sears would consider selling additional leases (including the Eaton Centre location) if the price was right.

Nordstrom has reportedly coveted the Eaton Centre location, and landlord Cadillac Fairview has been craving a more productive anchor retailer.

[Image via Cadillac Fairview]

News: Sears Canada CEO Calvin McDonald Resigns

Calvin McDonald leaves as retailer continues to attempt revival.

Calvin McDonald

In a surprising new development, Sears Canada has announced that its CEO Calvin McDonald is leaving the company. McDonald, a former executive at Loblaw, spent two years at Sears working to revive the ailing retailer by focusing on the so-called “hero” categories of appliances and apparel. Under his watch the retailer sold leases to several high profile stores (paving the way for Nordstrom’s entry into Canada).

Sears has been struggling as it loses market shares to a host of rivals and is being squeezed in the middle of the market. At the lower end it has encountered intense competition from discounters Walmart and Target (which has been rolling out stores across Canada), and at the higher end to a newly resurgent Hudson’s Bay.

McDonald is being replaced by former Sears COO Douglas C. Campbell, who first joined Sears in March 2011. He is a former principal with Boston Consulting Group and has experience in many sectors including retail, manufacturing, and pharmaceuticals.

"I am excited about the opportunity to lead a company with such a great brand and history, and to continue to improve the performance of Sears," commented Campbell.  "I am eager to move us forward, to work closely with our management team and to continue to engage our customers and our 25,000 associates to better serve families and communities across Canada."

The Globe and Mail is reporting that McDonald’s departure is tied to a disagreement with Edward Lambert, the chief shareholder of the US parent company Sears Holdings Corp. over the pace of change. McDonald is leaving for a position with an undisclosed international company.

[Click here for the official announcement]
[Photo via Sears Canada]

News: Sears Launches 2013 Wish Book with iPad Edition

It may be the last gasps of summer in Toronto, but Sears is ready for the holidays.

 

The Sears 2013 Wish Book Catalogue

For many Canadians the Sears Wish Book is a seasonal reminder that the festive season is around the corner. The holiday annual is a part of the department store retailer’s catalogue business and trades heavily on its focus on toys and gifts.

This year Sears is introducing iPad editions to complement the release of their Wish Book as well as LOOK! (a quarterly fall fashion look book first introduced last year). Both are also available in print and online editions.

"Sears wants to engage with customers in ways that are relevant and meaningful to them," said Calvin McDonald, President and CEO, Sears Canada in a release.  "For many Canadians who have grown up in the electronic age, the Catalogues iPad app provides an easy and familiar way to see what's new and place an order at the same time. As the country's leading gift guide and fashion trend barometer for the season, the Wish Book and LOOK! report iPad apps, respectively, are the retail industry's leading publications in shopping technology and innovation."

The Wish Book iPad edition features a search engine, the ability to bookmark items, and a Wish List maker. Also available is a social media component that allows customers to share products and Wish Lists with Facebook and Twitter.

The news Wish Book can be viewed via the Sears Catalogue app (available to download from iTunes) or viewed online at sears.ca.

Though the retailer's troubles are well documented, their catalogue and online business remains one of the most extensive in the Canadian marketplace. Sears has combined their long standing catalogue business with e-commerce and has over 1,400 catalogue/online pick-up locations across the country. Annually over 3 million Canadian households receive the Sears catalogue.

News: La Maison Simons Coming to Toronto?

Do Sears store closures open a window for Simons?

According to the Toronto Star, Quebec-based department store La Maison Simons is actively seeking real estate in the Toronto area. The recent sale of store leases by Sears Canada has provided a point of entry for Simons in two of the most coveted shopping centres in the region.

Last week Sears announced that as part of a continuing strategic review of its real estate assets it has decided to sell its Yorkdale and Square One store leases back to the mall landlord (the malls are co-owned by Oxford Properties and the Alberta Investment Management Corp.). The $191 million deal will result in the stores closing in March of next year. The retailer also sold an option for their Scarborough Town Centre location (which the landlords have 5 years to exercise for $53 million).

“In this case, we were presented with an opportunity that gives us a significant financial benefit without changing our plans to improve the business and make Sears more relevant to Canadians,” said Sears Canada President and CEO Calvin McDonald. Sears previously sold store leases back to mall operator Cadillac Fairview, which facilitated the entry of Nordstrom into Canada starting in 2014.

Simons confirmed that they are interested in the spaces being vacated by Sears at Square One and Yorkdale. Last year the retailer opened its first location outside Quebec at Alberta’s West Edmonton Mall and an additional location is planned for Ottawa’s Rideau Centre. The retailer is known for its mixture of on-trend fast fashion and high-end designer brands.

Also, at this week’s Annual General Meeting of the Hudson’s Bay Company, CEO Richard Baker welcomed the competition of both Nordstrom and Simons saying it benefits HBC and would rather have them as neighbours than embattled Sears.

[Click here for Sears press release]

[Photo via Simons]

News: Sears Canada Considers Options

The Globe and Mail is reporting that at today’s Sears Canada annual general meeting, CEO Calvin McDonald confirmed the possibility that the retailer might sell additional assets as it seeks to increase productivity and streamline operations.

Last year Sears sold back the leases to three high profile stores to landlord Cadillac Fairview, which opened the door to US department store Nordstrom to enter the Canadian market. McDonald said there are no current plans for any additional store closings.

In a further consolidating of its store categories, Sears is eliminating electronics and window coverings, and scaling back on its signature Craftsman hardware line as it focuses on fashion and appliances.

From the Globe and Mail:

“We’re here to remain in Canada to trade and become a relevant retailer,” Mr. McDonald, a former Loblaw Cos. Ltd. executive said in reply to a shareholder’s question. “In that there are non-strategic assets that we own today, if the opportunity is right to create value through those, we will explore those opportunities.”