Sears Canada

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Sears Canada Inc.
Type Public (51% of common stock owned by Sears Holdings)
Traded as TSXSCC
Industry Retail
Founded 1952 (joint venture of Simpson's and Sears)
Headquarters 250 Yonge Street (Toronto Eaton Centre) Toronto, Ontario, Canada
Key people Douglas C. Campbell Former President & CEO
Products Clothing, footwear, bedding, furniture, jewellery, beauty products, appliances, housewares, tools, and electronics.
Revenue $3.991 billion (2013)
Net income $35.7 million (2013)
Total equity $1.0764 billion (2012)[1]
Employees 11,240 (2011)[2]
Parent Sears Holdings
Website www.sears.ca

Sears Canada Inc. is a retailer, headquartered in Toronto, Ontario, that operates in all provinces and territories of Canada with a network of 196 corporate stores (Sears, Sears Home, Sears Outlet/Fashion Outlet, Sears Central Services), 195 dealer stores, 38 home-improvement showrooms, 108 Sears Travel offices and a nationwide home maintenance, repair, and installation network. SLH Transport, a freight trucking company and wholly owned subsidiary headquartered in Kingston, Ontario, provides the company with transportation and logistics services and comprises 620 trucks, 3,700 trailers, and 900 associates with terminals located throughout Canada.[3] Sears also has a general merchandise catalogue with over 1,800 catalogue merchandise pickup locations. There is a Sears location within a 10-minute drive of 93% of Canadians. About 33,000 people are employed throughout the company.

Sears Canada was formed in 1952 as a joint venture of Simpson's and United States retailer Sears, which now owns a 51% share.[4]

Corporate history[edit]

The Sears store at Chinook Centre in Calgary, Alberta, which closed in 2012.

Simpsons-Sears[edit]

Simpsons-Sears logo

Sears Canada began its operations as Simpsons-Sears Limited, a catalogue and mid-market suburban retailer, as a joint-venture between the Robert Simpson Company (Simpson's), an existing Canadian department store retailer, and Sears, Roebuck and Co. of the United States. In 1952, General Robert E. Wood, the Chairman of U.S. retailer Sears, Roebuck and Company, sent a letter to Edgar G. Burton, President of the Robert Simpson Company of Toronto, proposing a partnership between their two companies in order to serve the Canadian market. The deal to create Simpsons-Sears Limited, a Canadian catalogue and department store chain separate from the Simpsons chain, was signed on September 18, 1952 and the terms were 50-50. Each company put up $20 million and had equal representation on the new company's Board of Directors. The new company was to have two main objectives. The first was to expand Simpsons' existing mail order business, which was sold to the new company. The second goal was to build a string of stores modelled on Sears, Roebuck's format right across the country.

The agreement also contained a provision that would prove to be a major bone of contention in the coming years. Under its terms, Simpsons-Sears could not open a retail store within 25 miles of Simpson's existing stores in Toronto, Montreal, Halifax, Regina and London. In return, Simpson's promised not to build any stores outside of those five cities. Simpsons-Sears mail order business, however, was free to operate anywhere in Canada and so was the new Simpsons-Sears Acceptance Company, the credit arm of the operation.

The business operations of Simpsons-Sears began when the first Simpsons-Sears Spring/Summer Catalogue rolled off the presses of Photo-Engravers and Electrotypers, Ltd. and were delivered to 300,000 Canadian homes in early 1953.

On Thursday, September 17, 1953, the first Simpsons-Sears retail store opened in Stratford, Ontario at 9:15 a.m. The second Simpsons-Sears store opened in Kamloops, B.C. in December of that year.

In 1972, Simpsons and Simpsons-Sears agreed to end the 25-mile restriction and permit Simpsons and Simpsons-Sears stores anywhere. The following year, when Simpsons-Sears opened a store in the city of Mississauga, approximately 30 km (19 mi) west of Toronto, the company decided to use the Sears name alone in order to prevent confusion with Simpsons stores operating in Toronto.

In 1971, the Simpsons-Sears opened its new head office building in downtown Toronto.

In 1973–1974, Simpsons-Sears opened its first stores in metropolitan areas already served by Simpson's (although in suburban areas well away from the downtown Simpson's stores), the first such being in Mississauga, Ontario. So, to avoid confusing customers, these new stores were opened under the "Sears" banner. All existing Simpsons-Sears stores were rebranded to the Sears banner as well. However, the name of the entity remained Simpsons-Sears.

In 1976, Simpsons-Sears inaugurated a Sears store at Galeries d'Anjou, its first location in a mall with a Simpsons store.

Hudson's Bay acquisition of Simpsons[edit]

The Hudson's Bay Company acquired Simpsons in 1978. Because of federal competition laws, the Hudson's Bay Company was required to divest itself of its interest in Simpsons-Sears, which had been held by Simpsons, and the chain was formally renamed Sears Canada Inc. in 1984. The Hudson's Bay Company eventually merged the remaining Simpsons stores into its the Bay division in 1991, and the Simpsons name disappeared from Canada's retail landscape. As a result of this move, Sears Canada took over eight former Simpson's and Bay stores and finally gained a major foothold in Toronto.

Sears Whole Home and Sears.ca[edit]

A Sears Home location in Moncton, New Brunswick
Interior of Pacific Centre store, a former "eatons" location.
A Sears store in Toronto
Sears mascot for the Great Canadian Chill, a polar bear dip to raise money for children's cancer charities, Ottawa, Canada
A Sears outlet store in Ontario

In 1995, Sears Canada launched a chain of specialty stores called Sears Whole Home. These furniture stores located in power centres, and renamed them Sears Furniture and Appliances stores in 1999, to reflect the addition of major appliances. In 2003, the Furniture and Appliances stores were renamed to Sears Home stores. This change was intended to reflect their broader appeal for customers seeking a one stop experience for re-making their home decor. The stores' product line was expanded to include Home Installed Products and Services such as floor coverings, customer drapery, and other installed home related products in many locations.

In 1998, Sears Canada's website, www.sears.ca, became an active channel, allowing customers to order from a selection of over 500 products. By 2001, the website became Canada's most popular retail internet destination with over a million orders placed that year.

Eatons[edit]

In 1999, Sears Canada acquired the assets and the trademark name of the bankrupt chain, The T. Eaton Company Limited. For the first time in its history, Sears Canada gained the leases to a number of prime downtown locations in Toronto (Eaton Centre), Vancouver, Victoria, Winnipeg, Ottawa, and Calgary, all former Eaton's flagship stores. The Simpsons-Sears agreement had largely shut out Sears from the urban core, and that remained so even when the restriction was lifted, as The Bay and Eaton's long held a duopoly in the downtowns of major Canadian cities. Sears Canada had intended to obtain the former Eaton downtown Montreal store but lost out to the incumbent Les Ailes de la Mode.

Sears relaunched Eatons (rendered with the lowercase "e" logo) in November 2000 as a seven-store upscale mini-brand, with locations in Vancouver, Victoria, Calgary, Winnipeg, Toronto (Eaton Centre and Yorkdale) and Ottawa, all of which were formerly flagship Eaton stores. At Yorkdale, this meant that Sears Canada managed two anchor stores (eatons and Sears) in that mall for a short period of time. This operation was unsuccessful, however, and Sears converted the Eatons stores to the Sears brand in 2002. Many said that the Eatons stores were too upscale and/or too thinly scattered across the country for the mini-chain to have ever been profitable and worthwhile. The retail environment has changed with more of the population shopping at big box outlets and/or specialty stores squeezing out the middle market which is the base of the traditional department store.[5]

Management changes and outsourcing of Sears Card[edit]

On August 26, 2004, Sears Canada Chairman and CEO Mark A. Cohen's contract was terminated and he was replaced by Brent Hollister. Cohen was formerly President of Softlines and Chief Marketing Officer of the US parent Sears.

In 2005, Sears Card financial services was outsourced to JPMorgan Chase Bank, N.A. with Sears receiving $3 billion CDN for the sale, while Sears Club points system was retained by the retailer. Sears also paid a special dividend upon the completion of the transaction. CEO Brent Hollister said that the move would allow Sears to refocus on its retail operations; as the chain had been lately relied heavily on its financial services division.

Privatization attempt by parent[edit]

In January 2006, Sears Holdings Inc, the parent company and majority shareholder of Sears Canada Inc. made a bid to purchase the remaining shares to take the company private. Some members of the board opposed the move.

Pertaining to the attempt of privatization on behalf of its parent company, Sears Holdings Limited; a recent ruling by the Ontario Securities Commission, made in August 2006, has stalled progress on this front.[6] While the ruling does not dispel the future possibility of the privatization of Sears Canada, it does pose a significant obstacle by ruling three major shareholding blocks ineligible to vote as the blocks were given extraordinary privileges by Sears Holdings Limited.[7]

On November 14, 2006 Sears Holdings' move to privatize Sears Canada at a bid of $17.97/share fell through by voting amongst the minority shareholder groups.[8]

Recent developments[edit]

Sears at Markville will be closing in 2015

On March 31, 2005, the majority ownership stake was transferred to Sears Holdings which then owned 73.1% of Sears Canada common shares, while Pershing Square Capital held 17.3%, and the remainder of the shares were publicly traded on the Toronto Stock Exchange.[9]

On September 26, 2007, Sears Canada announced the sale of its Jarvis Street headquarters to the Government of Ontario. The company relocated its head office to surplus space at its flagship store in the Toronto Eaton Centre.

In 2010 same store sales were down 4% compared to 6.8% in 2009.[1][10] In December 2011, after slow sales in the holiday season, it laid off 70 employees from its head office after losing nearly $47 million in the previous quarter.[11]

In June 2011 Calvin McDonald became CEO and president of Sears Canada Inc. after an 18-year career with Loblaws.

In 2012, Sears Canada sold three stores in Vancouver, Calgary and Ottawa back to the landlord, Cadillac Fairview Corp. Ltd., for $170 million.[4] A second, smaller Sears location in Calgary was also closed.

In 2012, Sears, Roebuck distributed a large number of its Sears Canada shares to its own shareholders, reducing its holdings from 96% to about 51%. Sears Holdings Corporation's Chairman and CEO, Edward Lampert, has a 27% stake in Sears Canada.[4]

In May 2013, the Canadian Broadcasting Corporation, in its extensive coverage of the hiring of temporary foreign workers in Canada and the unemployment issues faced by Canadians, reported that Sears had laid off Information Technology staff and outsourced operations previously.[12]

In June 2013, Sears announced that it had sold leases at the Yorkdale and Square One malls back to the landlord for $191 million. Sears will close the locations by April 2014. Sears sold an option on another location at Scarborough Town Centre mall to give the landlord an offer to buy back its lease for $53 million.[13]

In September 2013, Calvin Macdonald was replaced as CEO by Douglas C. Campbell, Sears Canada's COO.[14]

On October 29, 2013, Sears Canada announced the closure of five stores including the flagship Toronto Eaton Centre (to be replaced by Nordstrom in 2016 [15]) location, Markville Shopping Centre (Markham, Ontario - 2015), Sherway Gardens (Toronto 2014), Masonville Place (London, Ontario - 2014) and Richmond Centre (Richmond, BC - 2015).[16] The closure will result in 965 employees being laid off, with some offered positions elsewhere.[16] Sears Canada's head office will remain at the Eaton Centre.[17]

On November 26, 2013, reports indicated Sears Canada would layoff 800 staff across the Canadian operations (including head office and service department areas[18]) as part of its plan to reduce costs.[19]

In late 2013, SHS Services Management Inc, a Markham-Ontario based contract partner went into receivership, but Sears Canada promises to honour warranty through services offered by SHS on behalf of Sears Canada.[20]

On January 15, 2014, Sears Canada Inc. announced the layoffs of more than 1,600 employees. The company, which has sold back the leases of prime stores to landlords to raise cash and has outsourced some IT, apparel design and finance positions in a bid to trim its cost structure, has let go 283 employees in its logistics organization, effective immediately.[21]

See also[edit]

References[edit]

  1. ^ a b "Annual Report Sears Canada Inc.". February 24, 2011. 
  2. ^ "Company Profile for Sears Canada Inc (TSE;SCC)". Retrieved June 21, 2011. 
  3. ^ "About Sears" - Sears Canada website
  4. ^ a b c National Post, "Are Sears Canada’s days numbered? Poor results could have U.S. retailers circling soon", 8 January 2013
  5. ^ A National Institution: The Eaton's Chronology The Globe and Mail. February 19, 2002 (table reprinted by Western Libraries)
  6. ^ "OSC stalls Sears buyout". CBC News. August 8, 2006. Retrieved January 6, 2007. 
  7. ^ McFarland, Janet; Strauss, Marina (September 8, 2006). "Sears Holdings smacked by OSC ruling". Globe and Mail Update. Retrieved January 6, 2006. 
  8. ^ Shaw, Hollie (November 15, 2006). "Shareholders block privatization of Sears Canada". Financial Post. Retrieved January 6, 2007. 
  9. ^ "Sears Canada pourrait-elle être bientôt vendue?". Canoe. Retrieved April 13, 2009. 
  10. ^ Sears faces uncertain future in Canada: analyst | CTV News
  11. ^ Sears faces uncertain future in Canada: analyst | CTV News
  12. ^ "Canadian on EI shut out amid foreign worker influx - British Columbia - CBC News". Cbc.ca. May 20, 2013. Retrieved October 30, 2013. 
  13. ^ Marina Strauss (June 14, 2013). "Struggling Sears divests key Canadian leases". The Globe and Mail. Retrieved October 30, 2013. 
  14. ^ "Sears Canada replaces CEO with chief operating officer - Business - CBC News". Cbc.ca. September 24, 2013. Retrieved October 30, 2013. 
  15. ^ "Nordstrom coming to Toronto Eaton Centre - Toronto - CBC News". Cbc.ca. January 15, 2014. Retrieved January 22, 2014. 
  16. ^ a b "Sears Canada to close Eaton Centre store and 4 others in $400M lease sale". 680News. May 31, 2010. Retrieved October 30, 2013. 
  17. ^ "Sears Canada to close Toronto Eaton Centre store, four others; will Nordstrom move in? | Toronto Star". Thestar.com. October 29, 2013. Retrieved January 22, 2014. 
  18. ^ "Sears Canada to lay off almost 800 people | Toronto Star". Thestar.com. November 26, 2013. Retrieved January 22, 2014. 
  19. ^ "Sears Canada to cut nearly 800 staff in repair parts and service". 680News. November 26, 2013. Retrieved January 22, 2014. 
  20. ^ Canadian, The (December 14, 2013). "More trouble for Sears: 640 jobs lost as company ally goes into receivership - Yahoo Finance Canada". Ca.finance.yahoo.com. Retrieved January 22, 2014. 
  21. ^ "Sears Canada to cut 1,600 call centre, warehouse jobs", CBC.ca 16 january 2014

External links[edit]