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During the "Festive Finale" campaign in 2011, Zeddy was reintroduced in weekly flyers for Zellers' Toyland before closing their stores for [[Target Canada|Target]] or [[Walmart Canada|Walmart]]. The character was used as a static picture, but no animated television commercials of him were made during this season. However, some employees decided to wear the Zeddy costume to celebrate the return of this teddy bear. Shortly thereafter, in December 2011, Zellers launched a "Zeddy Bucks" promotion. Those who spend at least $50 before taxes on toys would receive a pair of red [[2012 Summer Olympics]] mittens, plus a $10 Zeddy Bucks voucher. This voucher could only be used on a later date.<ref>Zellers December 2011 Flyer.</ref>
During the "Festive Finale" campaign in 2011, Zeddy was reintroduced in weekly flyers for Zellers' Toyland before closing their stores for [[Target Canada|Target]] or [[Walmart Canada|Walmart]]. The character was used as a static picture, but no animated television commercials of him were made during this season. However, some employees decided to wear the Zeddy costume to celebrate the return of this teddy bear. Shortly thereafter, in December 2011, Zellers launched a "Zeddy Bucks" promotion. Those who spend at least $50 before taxes on toys would receive a pair of red [[2012 Summer Olympics]] mittens, plus a $10 Zeddy Bucks voucher. This voucher could only be used on a later date.<ref>Zellers December 2011 Flyer.</ref>


With the last Zellers stores set to close in 2013, the Hudson Bay Company announced in September 2012 that it was looking for a charity organization to adopt Zeddy so that the mascot can live on post-Zellers. <ref name = "Zeddy contest"/> In a social media ad campaign, ''Zellers Everything Must GO -- Including Zeddy'', Zeddy is featured in an online video where the mascot is abandoned in the woods by a Zellers executive who tells Zeddy "Zellers is liquidating, and everything must go -- That includes you." Organizations are invited to submit on Zellers' Facebook page what their plans for Zeddy are. <ref name="Zeddy after Zellers">http://www.thestar.com/business/article/1257789--zellers-prepares-to-close-so-what-happens-to-zeddy-the-bear</ref> The grand winner will acquire the rights to Zeddy and receive a 5000$ donation from the HBC, but secondary prices are also available for other contestants. <ref name="Zeddy contest"/> <ref name="Zeddy after Zellers"/>
With the last Zellers stores set to close in 2013, the Hudson Bay Company announced in September 2012 that it was looking for a charity organization to adopt Zeddy so that the mascot could live on post-Zellers.<ref name = "Zeddy contest"/> In a social media ad campaign, ''Zellers Everything Must GO -- Including Zeddy'', Zeddy was featured in an online video where the mascot was abandoned in the woods by a Zellers executive telling Zeddy "Zellers is liquidating, and everything must go -- That includes you." Organizations were invited to submit on Zellers' Facebook page what their plans for Zeddy were.<ref name="Zeddy after Zellers">http://www.thestar.com/business/article/1257789--zellers-prepares-to-close-so-what-happens-to-zeddy-the-bear</ref> There were over 30,000 votes, with the final three contenders being Autism Ontario, Camp Trillium and [[Cystic Fibrosis Canada]]. Voters eventually selected Camp Trillium as the winner, and chosen adopter.<ref name="Camp Trillium">http://www.newswire.ca/en/story/1072675/zellers-iconic-mascot-zeddy-finds-new-home-with-camp-trillium</ref>



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Revision as of 01:44, 17 November 2012

Zellers, Inc.
Company typeDivision
IndustryDiscount retail store
Founded1931
HeadquartersBrampton, Ontario
Number of locations
≈162[1]
ProductsClothing, grocery, footwear, bedding, furniture, jewellery, beauty products, electronics, toys, sports equipments, appliances, and housewares
OwnerNRDC Equity Partners
ParentHudson's Bay Company[2]
Websitewww.zellers.com

Zellers Inc. is Canada's second-largest chain of mass merchandise discount stores, with locations in communities across Canada. A subsidiary of the Hudson's Bay Company (HBC), it has, as of September 18, 2012, approximately 162 locations across the country.[1]

In 2011, Target Corporation acquired the leaseholds of 189 Zellers stores (including locations being resold to other retailers) as the chain prepares to expand into Canada in 2013 and 2014. [3] HBC will continue to operate these locations until at least early 2012, at which point they will close for renovations, with individual closing dates varying by location. HBC announced on July 26, 2012, that it will close most of the remaining 64 stores not acquired by Target and likely retire the Zellers banner from Canadian retail by March 31, 2013.[4]

History

1930s–1960s: Early years, partnership with W. T. Grant

Zellers advertisement in the Toronto Star for its 1931 grand opening in Toronto. The announced location later became the Toronto Eaton Centre.

The company was founded in 1931 by Walter P. Zeller as "stores for thrifty Canadians". The chain began with the purchase of the fourteen Canadian locations of American retailer Schulte-United, all of which were in Southern Ontario. Almost immediately, Zellers initiated an aggressive expansion strategy. Within 25 years, Zellers operated sixty stores and employed 3,000 people. In 1952, in a move to expand into Atlantic Canada, it acquired the Federal Stores chain of variety stores, adding more than 12 new Zellers locations.

During this period of expansion, Zellers concluded a deal with W. T. Grant, a similar chain of American mass merchandise department stores. This arrangement allowed W.T. Grant to purchase 10% of Zellers shares, and eventually a 51% ownership in 1959. In exchange, the Grant Company made available to Zellers its experience in merchandising, real estate, store development, and general administration. Zellers employees were sent to Grant stores and head office for training and the two companies made common buying trips to East Asia. In the 1950s, the chain again began opening new locations, and in 1956, opened its first self-serve location at the Norgate shopping centre in Saint-Laurent, Quebec. Stores opened in 1960 employed many new innovations, including the first in-store restaurant, the first auto centre, and the first suburban location.

1970s–1980s: Zellers acquires Fields, HBC acquires Zellers

In 1975, Zellers adopted its current logo. By 1976, Zellers had grown to a chain of 155 stores, with annual sales of $407 million.[5]

Although Zellers was prospering, W.T. Grant was facing intense competition in the United States, and was forced to withdraw entirely from its Canadian operations. In 1976, Zellers management and shareholders were presented with an offer from Fields, a clothing retailer based in Vancouver, British Columbia, to purchase a 50.1% stake in the company for $32,675,000. Zellers shareholders, unhappy with the idea of Zellers becoming a subsidiary of Fields, reversed the takeover, and purchased Fields and its hardware store division, Marshall Wells. This sale added 70 Fields stores and 162 franchised Marshall Wells stores to the company. Fields President and founder, Joseph Segal, was appointed as President of Zellers.[6]

In June 1978, Zellers presented a bid to acquire 100% ownership of the Hudson's Bay Company. HBC management, recognizing Zellers' profitability and the potential to enter a new retail segment, decided to purchase Zellers instead. Zellers and Fields, operating in very different retail segments than HBC, were kept intact, and established as separate divisions of the company. HBC acquired full ownership of Zellers and Fields in 1981, and Marshall Wells, in 1982. By 1985, HBC had sold Marshall Wells for $20 million, because it was not relevant to its department store business.

Counterfeit video games for the Atari 2600 were manufactured and sold by Zellers. All games were clones of titles created either by Atari itself or by third-party developers such as Activision. Zellers was eventually forced by Atari to stop selling these games.[7]

1990s–2000s: Zeddy mascot, further acquisitions

In 1990, HBC acquired the 51 stores of the Towers/Bonimart chain from the Oshawa Group, and converted most of them to Zellers outlets, including its flagship location in Toronto. Zellers advertisements at the time featured both the Towers mascot "Sparky", and the Zellers mascot "Zeddy", walking arm-in-arm. During this period, Zellers had the popular and well-known slogan "the lowest price is the law".

In 1993, HBC purchased the assets of the bankrupt Woodward's chain, including 21 store locations. These were converted into both Zellers and the Bay stores, and greatly expanded the Company's presence in Western Canada. In 1998, Hudson's Bay Company acquired Kmart's Canadian division, and merged it with the Zellers division to create a larger combined chain under the Zellers name. While some Kmart locations were closed, many sites became full Zellers outlets.

In 1996, Hudson's Bay Company closed its Zellers head office in Montreal, Quebec and merged it with the HBC headquarters in downtown Toronto. By 1998, HBC regained a Zellers head office after Zellers took over Kmart's Canadian head office in Brampton, Ontario.

On February 28, 2006, Zellers was taken private when South Carolina businessman Jerry Zucker finalized a takeover bid for the Hudson's Bay Company. Following Zucker's death in 2008, HBC (including Zellers) came under the ownership of a New York-based company, NRDC Equity Partners, the owner of the Lord & Taylor.

2010s–present: Leases sold to Target, liquidation and closures

Zellers closeout sale at the Gloucester, Ontario location. It was one of the 39 Zellers converted to a Walmart.
A Zellers sign-holder for the store closing at Galeries d'Anjou in Montreal.

On January 13, 2011, it was announced that Target Corporation of the United States will purchase the lease agreements of up to 220 Zellers stores for C$1.825 billion.[8] Under the agreement, Zellers will initially sublease the properties and continue to operate them as Zellers locations until at least January 2012, and at latest the end of March 2013.[9] After the Zellers stores at these locations close, Target will renovate 100 to 150 of them and reopen the stores under the Target banner during 2013 and 2014. The remaining acquired sites will be transferred to other retailers.[10] Upon this announcement, the HBC said that it would continue to operate Zellers as a smaller chain in specific communities.[11]

Of the maximum 220 locations, 105 to be transferred to Target were identified in late May 2011,[12] and another lot of 84 locations in late September 2011, bringing the total number of Zellers stores acquired by Target to 189.[3] Of these 189 stores, 125–135 stores will be converted into Target stores,[13] 39 others were resold to Walmart Canada,[14] and the remaining 15–25 leases will either be sold to other retailers or returned to the landlords who own the sites.[13]

In March 2012, 50 Zellers stores from the Target purchase were put in liquidation. This included all 39 Zellers stores slated to become Walmart outlets. By mid-June, the latter locations were closed to the public. On June 25, 2012, 17 more stores in Ontario were put in liquidation.[15]

The Hudson's Bay Company announced on July 26, 2012, that it will close most of the 64 remaining stores that were not acquired by Target and that were supposed to continue operating as Zellers outlets. A company spokesperson stated that these stores employ 6,400 people, or approximately 100 per location. The closings are expected to happen prior to April 2013, and the company's main reason for closing the stores is due to Zellers' lack of profitability.[16][17][18][19] The HBC also remarked that it would not be viable to keep Zellers as an ongoing business due to the geographical locations of the remaining 64 stores.[20] The HBC does not exclude the possibility of keeping some stores open and re-branding them as the Bay or Home Outfitters outlets.[21][22]

Since July 2012, numerous Zellers stores across the country have either closed or are in the liquidation process. These closures involve both stores impacted by the Target deal and stores that were originally intended to stay opened as Zellers locations under the HBC. As of September 2012, the chain has an estimate of 162 stores.[1] It had 276 stores in January 2011, when the transaction with Target was first announced.[23]

Stores

A Zellers store in Moncton.
File:ZellersSelect.png
Zellers Select logo.

Zellers operates stores from St. John's, Newfoundland and Labrador, to Prince Rupert, British Columbia, and employs over 35,000 people. The average store size is 94,000 square feet (8,700 m2). "Zellers Select" stores are designed for smaller markets with populations under 25,000, with stores averaging 45,000 square feet (4,200 m2). Some multi-level stores are equipped with a shopping cart system known as the "Cartveyor", designed to transport shopping carts between floors next to a standard escalator.

In July 2010, Zellers unveiled its new format/look stores in five Winnipeg stores, with two more to open late 2010 and early 2011. One store opened on the lower floor of the downtown Winnipeg Bay store making it the first Bay/Zellers hybrid store in the HBC family of stores.

Restaurant

Many Zellers locations have a restaurant known as Zellers Family Restaurant. Weekly specials for the restaurants are advertised in store flyers, and special deals are available during "Moonlight Madness" events.

Pharmacy

Almost every Zellers location outside of Quebec had a pharmacy in it. A few stores in Quebec also had them. Prescription records were sold to other pharmacies in 2011, and Zellers pharmacies ceased operation throughout 2012. Zellers was subject to controversy regarding its sale of patient records.

Products

Products sold at Zellers include clothing, grocery, toys, electronics and home supplies. As of 2012, most pharmacies in the remaining stores have been closed and client lists forwarded to other pharmacies in the respective areas.

Grocery

All Zellers sell basic groceries such as dry snacks and other prepackaged foods. "The Neighbourhood Market", available at some locations, is Zellers' expanded section of grocery items which include frozen and dairy aisles. Prototype stores in Winnipeg featured full grocery departments including fresh produce and baked goods. Such plans have been dropped following Target Canada's acquisition of many Zellers leases. Some stores have even removed their "The Neighbourhood Market" section.

Exclusive labels

Zellers carries many of its own labels and also has exclusive rights in Canada to some other labels:

  • Alfred Sung Home
  • Beaumark
  • Big Star
  • Big Z (pillows)
  • Cherokee
  • Home Studio
  • Homestyles
  • Hunt Club
  • Marketsquare
  • Midtown
  • Mossimo
  • Nest by House & Home
  • Request by Ashlee Simpson
  • Sportek
  • Stuff by Hilary Duff
  • Truly
  • Wabasso Design Ideas
  • X Games
  • Zeddy (baby products)

Criticisms

Boxing Week sale

During the Boxing Week sales event in 2011, Zellers issued a coupon on Facebook allowing customers to get any one item (with some exceptions), including sale items, for 50% off by presenting the coupon.

Initially, people flocked to the sale, but Zellers said, three days later, it was printed in error and cannot be combined with flyer deals. This resulted in shoppers being angry and saying "Poor marketing. If this was going to be corrected, it should have been corrected the first day, not 4 days later. I imagine you'll be losing some customers from this." However, some stood up for Zellers saying it was still a good deal.[24]

Customer service

On January 6, 2012, CBC Marketplace announced that Zellers received the title of "Canada's Worst Customer Service" as a department store, based on a survey conducted by CBC with the Léger Marketing research firm in eight metropolitan areas. The retailer refused to be interviewed by Marketplace host Erica Johnson regarding its ranking, providing her with a written statement instead. Zellers also did not offer a refund to the mystery shopper who bought a used coffeemaker that was presented as new, and attempted to return the product after the advertised 30 day return period. Zellers instead offered the customer an exchange or store credit. Zellers Customer Service did not respond to this customer's Twitter message seeking satisfactory resolution.[25]

Advertising

Zellers ran a "Festive Finale" advertising campaign in late 2011. Zeddy was also used as a mascot to advertise the retailer's toy selection.

Festive Finale

The Festive Finale campaign was used to advertise Zellers' last Christmas and holiday season sale in December 2011. There is a website called ZellersFacebook.ca which allows customers to vote for their favourite coupon and musical genre. While Zellers recommends that customers have a Facebook account and "Like" the company, both of these steps are completely optional. It was also possible to record a radio commercial for Zellers' "Moonlight Madness" sale by using a computer microphone and reading the site's teleprompter. Zellers also has social networking service accounts on Twitter and YouTube. Festive Finale has been criticized for its Boxing Week coupon.

Loyalty program

Zellers shares a loyalty program, HBC Rewards, with The Bay and Home Outfitters, which are also owned by the Hudson's Bay Company. It was previously known as Club Z, but members of that program were migrated to that of HBC. There is no charge for the HBC Rewards card, allowing customers to collect points every time they shop at an HBC store. An HBC MasterCard issued by Capital One is also available, which rewards customers with one point for every dollar spent on the card at both HBC and non-HBC retailers. It can be used in conjunction with the HBC Rewards card for earning a total of two points per dollar spent at HBC stores. Cashiers are obligated to tell customers about the HBC MasterCard. Otherwise, the store must give 10,000 HBC Rewards points (previously a chocolate bar instead) to any shopper who made a purchase at Zellers without the cashier informing them of the credit card. The HBC Rewards program is not exclusive to Zellers, the closure of the chain should not affect the collection and redemption of these points.

Slogans

Numerous slogans were used by Zellers:

  • Early 1980s: "Les bas prix de Zellers sont en manchettes" ("Zellers' low prices are making headlines")
  • 1980s: "Only you'll know how little you paid"
  • 1980s: "Shopping anywhere else is pointless"
  • Late 1980s and 1990s: "Where the lowest price is the law!", followed by "Where the lowest price is the law every day" and "Because the lowest price is the law" as revisions
  • Late 2000s: "Everything from A to Z"

Zeddy

Zeddy encourages children to ride the Zeddy Wheel attraction at Zellers.

Zeddy is a teddy bear mascot used by Zellers all over Canada. He was first used in 1986 [26] as an advertising campaign, and then rose to his popularity by the early 1990s. The main purpose of Zeddy was to advertise Toyland, the toy section in Zellers stores. Zellers would provide a stuffed Zeddy bear for any child who had a birthday party sponsored by Zellers. There would also be a Zellers employee in a giant Zeddy costume hosting the party. Lineup toys of Zeddy were also created. [27]

Many stores feature a "Zeddy Wheel" ride, which accommodates one young child on a miniature ferris wheel-type ride. The ride costs $1 and plays carnival music when in use. When no one is riding the wheel, Zeddy says on a regular basis: "Come ride with me! All aboard the Zeddy Wheel!" in an attempt to attract customers.[28] Despite Zeddy being withdrawn as Zellers' official mascot in 2005, the Zeddy Wheel remained in operation at stores featuring it unless it is out of service, and the voice track was unchanged over the years. Some wheels removed the big Zeddy sticker in favour of multiple, small generic stickers.

Zeddy remains used as a baby brand for products such as diapers and baby bath products.[29]

During the "Festive Finale" campaign in 2011, Zeddy was reintroduced in weekly flyers for Zellers' Toyland before closing their stores for Target or Walmart. The character was used as a static picture, but no animated television commercials of him were made during this season. However, some employees decided to wear the Zeddy costume to celebrate the return of this teddy bear. Shortly thereafter, in December 2011, Zellers launched a "Zeddy Bucks" promotion. Those who spend at least $50 before taxes on toys would receive a pair of red 2012 Summer Olympics mittens, plus a $10 Zeddy Bucks voucher. This voucher could only be used on a later date.[30]

With the last Zellers stores set to close in 2013, the Hudson Bay Company announced in September 2012 that it was looking for a charity organization to adopt Zeddy so that the mascot could live on post-Zellers.[26] In a social media ad campaign, Zellers Everything Must GO -- Including Zeddy, Zeddy was featured in an online video where the mascot was abandoned in the woods by a Zellers executive telling Zeddy "Zellers is liquidating, and everything must go -- That includes you." Organizations were invited to submit on Zellers' Facebook page what their plans for Zeddy were.[31] There were over 30,000 votes, with the final three contenders being Autism Ontario, Camp Trillium and Cystic Fibrosis Canada. Voters eventually selected Camp Trillium as the winner, and chosen adopter.[32]

  • 1 – early 2000s
    1 – early 2000s
  • 3 – November 2011
    3 – November 2011
  1. Zeddy, on the far right, is walking in a parade in the early 2000s.
  2. Zeddy appears in the Toyland section of Toyland in November 2011.
  3. Zeddy is featured in the "Festive Finale" flyer for Zellers in late December 2011.

References

  1. ^ a b c "HBC Store Locator". Retrieved September 18, 2012.
  2. ^ "Contacts." Hudson's Bay Company. Retrieved on July 7, 2010.
  3. ^ a b "Hudson's Bay Company Confirms Final List of 189 Zellers Locations to be Assumed by Target". Canada Free Press. September 23, 2011.
  4. ^ The Star http://www.thestar.com/business/article/1232336--retailer-hudson-s-bay-co-to-close-most-of-its-remaining-64-zellers-stores. {{cite news}}: Missing or empty |title= (help)
  5. ^ "HBC Heritage → Our History → Acquisitions → Zellers". Retrieved May 12, 2009.
  6. ^ "HBC Heritage → Our History → Acquisitions → Fields". Retrieved February 2010. {{cite web}}: Check date values in: |accessdate= (help)
  7. ^ Retro Nouveau. "Les jeux Atari 2600 de Zellers" (in French). Tumblr. Retrieved September 16, 2012.
  8. ^ John Tilak, "UPDATE 2-Target to enter Canada with Zellers deal, own plans: Target plans to open up to 150 stores in Canada", Reuters January 13, 2011.
  9. ^ "Transaction Agreement between Zellers Inc., Hudson's Bay Company, Target Corporation and Target Canada Co". U.S. Securities and Exchange Commission. January 12, 2011. Retrieved March 28, 2011.
  10. ^ Marina Strauss and Steve Ladurantaye (January 13, 2011). "Target heads north in Zellers deal". Globe and Mail. Toronto. Retrieved January 13, 2011.
  11. ^ "Target buys Zellers leases for $1.8B". CBC News. January 13, 2011. Retrieved September 21, 2012.
  12. ^ Target Corporation (May 26, 2011). "Target Selects Initial Zellers Leases, Vast Majority to Become Target Stores". Retrieved May 26, 2011.
  13. ^ a b http://www.forbes.com/feeds/ap/2011/09/23/business-specialized-consumer-services-us-target-zellers_8697864.html. {{cite news}}: Missing or empty |title= (help); Unknown parameter |deadurl= ignored (|url-status= suggested) (help) [dead link]
  14. ^ The Canadian Press (June 24, 2011). "Walmart picks up 39 Zellers sites from Target". Canada: CBC. Retrieved June 24, 2011.
  15. ^ Liquidation. Zellers. Retrieved May 1, 2012.
  16. ^ http://www.globalnews.ca/canadas+remaining+64+zellers+stores+to+close/6442686687/story.html
  17. ^ The Star http://www.thestar.com/business/article/1232336--retailer-hudson-s-bay-co-to-close-most-of-its-remaining-64-zellers-stores. {{cite news}}: Missing or empty |title= (help)
  18. ^ "Most remaining Zellers stores to close by March 2013". CBC News. July 26, 2012.
  19. ^ http://m.theglobeandmail.com/report-on-business/hudsons-bay-to-close-remaining-zellers-stores/article4442797/?service=mobile. {{cite news}}: Missing or empty |title= (help)
  20. ^ "La fin de Zellers". Radio-Canada. July 26, 2012.
  21. ^ http://www.theprovince.com/business/Hudson+close+remaining+Zellers+stores+jobs+stake/6996113/story.html
  22. ^ http://affaires.lapresse.ca/economie/quebec/201207/26/01-4559709-la-plupart-des-zellers-restants-fermeront.php
  23. ^ "s Zellers a 'Target' for takeover as U.S. stores enter Canadian market?". Yahoo News.
  24. ^ Online reaction to retraction | CTV Calgary. Calgary.ctv.ca. Retrieved May 1, 20123.
  25. ^ "Canada's Worst Customer Service". CBC. Retrieved January 6, 2011.
  26. ^ a b "Zellers Announces Everything Must Go… Including Zeddy". Zellers. Retrieved December 21, 2012.
  27. ^ "Zellers' Festive Finale presents: "Pick the Playlist" with Jason the Cashier". Zellers. Retrieved November 28, 2011. {{cite web}}: |first1= missing |last1= (help)
  28. ^ Voice clips and pictures coming soon.
  29. ^ "Zeddy". Zellers. Retrieved November 25, 2011.
  30. ^ Zellers December 2011 Flyer.
  31. ^ http://www.thestar.com/business/article/1257789--zellers-prepares-to-close-so-what-happens-to-zeddy-the-bear
  32. ^ http://www.newswire.ca/en/story/1072675/zellers-iconic-mascot-zeddy-finds-new-home-with-camp-trillium
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