Sears Canada

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Sears Canada Inc.
Formerly called
 Simpsons-Sears (1952–1984)
Public
Traded as TSX: SCC
Industry Retail
Founded 1952 (joint venture of Simpson's and Sears)
Headquarters 290 Yonge Street (Toronto Eaton Centre) Toronto, Ontario, Canada
Key people
 Brandon G. Stranzl, Executive Chairman; Becky Penrice, Executive Vice-President & Chief Operating Officer[1]
Products Clothing, footwear, bedding, furniture, jewellery, beauty products, appliances, housewares, tools, and electronics.
Revenue $3.146 billion (2015)[2]
-$67.9 million (2015)[2]
Total equity $554.2 million (2015)[2]
Number of employees
 17,903 (2016)[3]
Website www.sears.ca

Sears Canada Inc. is a Canadian retail chain headquartered in Toronto, Ontario. The company's roots are in Simpsons-Sears, a joint venture with the Simpsons retail chain and the U.S. Sears chain, which operated a national mail order business, and co-branded Simpsons-Sears stores modelled after the U.S. Sears chain. Following the purchase of Simpsons by the Hudson's Bay Company in 1978, the joint venture was dismantled, and the Simpsons-Sears stores became solely owned by Sears. In 1999, Sears Canada acquired the remaining assets and locations of the historic Canadian chain Eaton's. Sears Holdings now owns a 11.7% share in the company.[4] ESL Investments Incorporated is the largest shareholder of Sears Canada.

Today, the retailer has a network that includes 140 corporate stores (including full-line, Sears Home and Outlet stores), 71 Hometown stores, over 900 catalogue and online merchandise pick-up locations, 69 Sears Travel offices and a nationwide repair and service network. The company also publishes a general merchandise catalogue and offers shopping online at www.sears.ca.[5]

Corporate history

Simpsons-Sears

File:Simpsons Sears.png
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 Simpsons Limited (the Robert Simpson Company Limited), a Canadian department store chain, and Sears, Roebuck and Co. of the United States. In 1952, General Robert E. Wood, the Chairman of U.S. retailer Sears, 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 Simpson's chain, was signed on September 18, 1952 and the terms were 50-50. Each company invested $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 Simpson's 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 across the country.

The agreement also contained a provision that would prove to be a major challenge in later 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 as 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 was printed by Photo-Engravers and Electrotypers, Ltd. and delivered to 300,000 Canadian homes in early 1953.

On September 17, 1953, the first Simpsons-Sears retail store opened in Stratford, Ontario. The second Simpsons-Sears store opened in Kamloops, British Columbia in December of that year. In 1954, Simpsons-Sears opened Canada’s first large suburban department store, in Vancouver – Burnaby, BC, based on new the modern Sears, Roebuck model, spreading across the U.S.

Simpsons-Sears introduced “We Service What We Sell”, in 1955, a slogan backed up by a highly trained nationwide corps of service technicians. In 1963, Simpsons-Sears opened its first full-line store in Quebec, in Quebec City’s Fleur de Lys complex.

The company made its public debut on the Toronto and Montreal Stock Exchanges on April 5, 1965, with the listing of its Class “A” non-voting shares. That year, Sears began its long-standing partnership with the Boys and Girls Clubs of Canada, to support its youth programming.

In 1968, Simpsons-Sears became the first Canadian retailer to begin buying products from Mainland China.

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

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. To avoid confusing customers used to Simpsons, 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 company remained Simpsons-Sears Limited.

Also in 1973, Sears achieved its first billion-dollar sales year.

In 1974, Simpsons-Sears opened a Sears store at Hillcrest Mall in Richmond Hill, Ontario, its first location in a mall that had a Simpsons store.

"Store Wars"

In 1978, Simpsons and Simpsons-Sears put forward a plan to merge their businesses. This plan had to have approval of the Foreign Investment Review Agency, as Sears, Roebuck would become the prime shareholder. Before approval could be attained, the Hudson’s Bay Company made a counter bid and acquired Simpsons Limited. Simpsons’ shares in Simpsons-Sears taken over by The Bay were eventually sold back to Sears, Roebuck. The company was renamed Sears Canada Inc. in 1984 to reflect its independence.

The Sears store in Fairview Mall, Toronto, one of the stores acquired from Simpsons in 1991.

The paths of Hudson’s Bay and Sears crossed again in 1991. The Hudson's Bay Company merged its remaining Greater Toronto 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 Simpsons and Bay stores and finally gained a major foothold in Greater Toronto, a market from which it had been excluded by the 1952 agreement with Simpsons. These new stores featured a new 60:40 fashions:hardlines mix and introduced new boutique shop arrangements and fashion lines, such as Le Chateau, Sung and Rouie.

Sears announced "The Store of the Future" in 1983. It represented a complete transformation and remodelling of stores along a new product-focused and customer-friendly merchandising program. The first remodelled store, in Mississauga, Ontario, was unveiled in 1985. Stores would be fully retrofitted over the following three years.

The Sears Catalogue Club points program began in 1986. The next year, it changed to "Sears Club" to incorporate all the company's trading channels.

Eatons

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 also entertained notions of obtaining the former Eaton downtown Montreal store but that location was eventually occupied by Quebec retailer 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 had been flagship Eaton stores. At Yorkdale, this meant that Sears Canada managed two anchor stores (Eatons and Sears) in that mall for a short time. This operation was unsuccessful, however, and Sears converted the Eatons stores to the Sears brand in 2002. Many said[who?] 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 specialty stores squeezing out the middle market which is the base of the traditional department store.[6]


Sears Canada's previous logo. Used From 2004-2016

In 2005, Sears Card financial services was outsourced to JPMorgan Chase Bank, N.A. Sears received C$3 billion for the sale, and the 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. Sears Canada announced it would end its credit card partnership with JPMorgan Chase when the agreement expires in November 2015.[7]

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. A ruling by the Ontario Securities Commission, made in August 2006, stalled progress the attempted privatization by its parent company, Sears Holdings Limited.[8] While the ruling did not dispel the future possibility of the privatization of Sears Canada, it posed a significant obstacle by ruling three major shareholding blocks ineligible to vote as the blocks were given extraordinary privileges by Sears Holdings Limited.[9] 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.[10] 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.[11]

On September 26, 2007, Sears Canada announced the sale of its 222 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, a new line of "Live Green” eco-friendly products were developed. Sears partnered with the Ontario Electronic Stewardship Council in a ‘take-back’ recycling program of e-waste, became a national sponsor of Earth Hour, a World Wildlife Fund environmental awareness event aimed at reducing power usage and received the BC Hydro Power Smart Excellence Award for its commitment to energy conservation in major appliances products.[12]

That year, Sears ‘Attitude’ women's fashion line made its debut on the runway at LG Fashion Week in Toronto.

Same-store sales were down 4% in 2010, compared to 6.8% in 2009.[2][13] 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.[14]

In June 2011, Calvin McDonald became CEO and president of Sears Canada after an 18-year career with Loblaws. McDonald initiated a‘transformation’ plan, with the aim of achieving sustainable growth in uncertain economic times and with ever-increasing competition. The plan included an emphasis on core businesses, the suburban and smaller sized-markets and exiting non-profitable facets of some departments. The emphasis was on ‘building customer relationships built on trust.’ ‘Hero’ categories were highlighted for renewal, such as mattresses, major appliances, children’s wear and related products, men’s dresswear and women’s traditional wear.[15] In line with the change in focus, Sears Canada sold three stores in Vancouver, Calgary and Ottawa back to Cadillac Fairview (the owner of the malls in which the stores were located).[4] Additional leased locations in Greater Toronto, Calgary and Richmond, BC were sold or optioned in 2013, to further the emphasis on mid-sized markets and away from urban downtown centres.

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 September 2013, Douglas C. Campbell took over as Sears Canada's COO.[16] Campbell brought continued transformational initiatives aimed at right-sizing the company and its retail, logistics and administrative support operations. Campbell left Sears Canada in October 2014 and was replaced by Ronald Boire, who served until June 2015. Brandon Stranzl was appointed Executive Chairman in July 2015, continuing in his role as chairman of the board and also assuming the duties of the CEO. In November 2015, Carrie Kirkman was appointed President and Chief Merchant, a role she held until July 2016.[17]

In late 2013, SHS Services Management Inc., a Markham, Ontario-based contract partner, went into receivership, but Sears Canada promised to honour home improvement warranty through services offered by SHS on behalf of Sears Canada.[18] Home Improvement services were late reinstated with new supplier agreements.

On August 24, 2016, Sears Canada unveiled a new corporate logo, replacing the blue striped wordmark that had been used by its U.S. counterpart. The new logo consists of a black wordmark and a red stencil of a maple leaf. Executive chairman Brandon Stranzl stated that the new logo "asserts the modern and streamlined image and consumer experience for which we are striving in-store and online."[19]

Early in 2016, Sears Canada announced plans to open what it termed "Sears 2.0" stores. Some of its current full-line stores were to undergo significant changes in their layout and offerings and become prototypes for the new Sears 2.0 store concept.[20] In September 2016, Sears unveiled this store concept at its locations at CF Promenade in Toronto and Mapleview Centre in Burlington, Ontario. The Promenade store hosted special associate events and a media launch day on September 27, and coverage of the new-look store included articles from The Globe and Mail,[21] Toronto Star (cited below) and BNN.[22] The new format has a reduced reliance on permanent fixtures and departments, allowing product displays to be manipulated as needed, and giving the stores an open atmosphere with fewer walls and partitions. The footwear department was moved to the centre of the store and switched to a "self-serve" concept, with product boxes accessible by customers (thus reducing the need for dedicated associates). Stranzl stated that the new format was meant to "take ideas from the best in the business, whether it's in shoes, outerwear or appliances", and return the chain to a "price-focused" strategy.[23][24]

Two more locations, in Guelph[25] and Oshawa, Ontario, opened before the end of 2016, followed by further store retrofits.

In December 2016, Sears Canada announced plans to add grocery sections in between three and five remodelled stores in 2017.[26] The selection will be primarily organic, with a focus on low cost and e-commerce.[27]

Store formats and channels

A former Sears Home location in Moncton, New Brunswick.
Interior of Eatons Pacific Centre store, a former T. Eaton Co. (Eaton's) location.
'Ben,' mascot for the Sears Canada Charitable Foundation, and its initiatives to support the development of Canadian youth. Pictured in Ottawa, Ontario.
A Sears outlet store at The Shops on Steeles and 404 in Thornhill, Ontario.

Full-line Stores

Simpsons-Sears began operating full-line (department) stores in 1953. Internally, these have been classified by size, volume and the extent of merchandise selection. In the early decades, classifications were based on a letter designation, mirroring founding American parent, Sears, Roebuck and Co.: 'A' Stores were large full-line stores, 'B' stores were smaller full-lines, serving more-mid-sized markets, while 'D' stores were early stores serving small markets, normally offering mostly hard-line and home departments, with a catalogue desk. the 'D' stores were phased out in the early 1960s. Small stores, denoted 'S.S.' and serving similar markets to the original 'D' Stores, were introduced in the 1980s. In latter decades, stores have been classified by more descriptive terms, such as 'Select,' 'Core' and 'Small.' When Hometown Dealer Stores were introduced, they mirrored the assortments of the early 'D' stores.

Clearance Centres and Outlet Stores

In 1971, adjacent to its new Kenmore Catalogue Service Centre in Toronto, Simpsons-Sears opened its first new concept "Clearance Centre", to assist in the rotation of its off-season and marked down catalogue merchandise. The concept was eventually expanded nationwide, offering consumers an off-priced selection of in-house and brand name products. In the 2000s, these stores were renamed "Outlet Stores" to reflect a broader assortment as well as channel-specific merchandise. Sears full-line stores in some markets were converted to this format in 2014. As of Fall 2016, Sears Canada operated 17 outlet locations.

Hometown (Dealer) Stores

In 1994, Sears Canada opened its first Hometown Dealer Store in Pembroke, Ontario. The "Hometown Stores". were designed to serve smaller-sized markets and bring a displayed selection of big ticket merchandise, along with the convenience of a local Catalogue counter, to consumers not near larger Sears stores nor other large retail firms. Stores of this format are operated predominantly in partnership with local community franchisers.

Home Stores

In 1995, Sears Canada launched a chain of specialty stores called "Sears Whole Home" in order to better showcase its home decor offerings. Furniture stores were located in power centres. they were renamed "Sears Furniture and Appliances" stores in 1999, to reflect the addition of major appliances. In 2003, the Furniture and Appliances stores were renamed "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 2004, new off-mall specialty formats were introduced, including four Sears Appliances and Mattresses stores and two Sears (Floor) Coverings Stores.

On-line Shopping

In 1998, Sears Canada's website, www.sears.ca, became an active channel, allowing customers to order from a selection of over 500 products.

In 2016, the company launched Initium, an initiative to overhaul existing legacy platforms into a new cohesive, functional, adaptable and user-friendly online retail enterprise for consumers. This new site provided for omni-channel availability of orders, integrated logistics and improved search and checkout experiences for customers.[28] In a related move, Sears Canada entered into an agreement with CGI to support Sears strategy to reengineer its technology platforms, with the goal of reducing costs and improving efficiency.[29]

Sears house brands

Sears Canada and its predecessors have long been associated with its well-known house brands, each having a history of its own. For Canadian and overseas vendor suppliers, it maintains a Vendor Code of Conduct which, amongst other things, prohibits the use of child labour.

Among some of Sears house brands over time:

"Craftsman" is Sears line of hardware, lawn and garden equipment, and work wear. In 2009, the readers of Popular Mechanics named Craftsman their favourite brand of hand tools in their Reader's Choice Awards.

The Craftsman trademark was registered by Sears, Roebuck and Co. on May 20, 1927. Arthur Barrows, head of the company's hardware department, liked the name Craftsman and reportedly bought the rights to use it from the Marion-Craftsman Tool Company for $500. The line has been carried in Canada since Simpsons-Sears began operating in 1953, first alongside such Simpson’s hardware brands as Beaver.

Sears tool line, like many of its other product lines, uses a "good, better, best" pricing structure, with the Craftsman brand as the middle tier and Craftsman Professional or Craftsman Industrial as the highest tier. The lower, value-priced tier was branded Sears. The "Dunlap" name was also used for from the late 1930s until the late 1950s. The Sears tool line was discontinued in the late 1980s and replaced by the "Companion" tool line. The Companion tool line was discontinued and replaced by the "Evolv'" tool line in 2008, with a focus on homeowners and do-it-yourselfers.

"Kenmore" is Sears Canada's primary line of household appliances. The first Kenmore branded product was a washing machine marketed by Sears, Roebuck and Co. in 1927. The first Kenmore vacuum cleaners were sold in the U.S. in 1932. Simpsons-Sears began selling the Kenmore line in Canada in 1953. Kenmore's upscale line of appliances is known as the Elite line. Kenmore also has a professional line of appliances called Kenmore Pro. In the 1960s and 1970s, many housewares and personal electrics in the line were branded “Lady Kenmore” but its use was discontinued with the rise of sexism sensitivities.

In Canada, Kenmore appliances are available exclusively through Sears.

"Silvertone" was the brand name used by Sears, Roebuck and Co. for its line of sound, radio, stereo and home entertainment equipment from 1915 to 1972 and by Simpsons-Sears in Canada from 1953 to 1972. Probably best known for the line of inexpensive guitars, the brand became popular with novice musicians. Jerry Garcia, Chet Atkins, Bob Dylan, John Fogerty, Jack White, Mark Knopfler, and Brad Paisley had a Silvertone for their first electric, bass, or acoustic guitar. The Canadian band Chad Allan and The Silvertones, which became The Guess Who, took its name from this line of instruments. Pete Townshend would employ them in live performance with The Who for the purposes of smashing them.

The name was placed on guitars from several different manufacturers over the years, including Danelectro, National, Harmony, Kay, and Teisco. The guitars, especially the 1960s models, are prized by collectors.

"Coldspot" was a Sears brand that existed from 1928 to 1976. The brand was created for a line of refrigerators. Other products sold under the Coldspot brand included freezers, dehumidifiers, and window air conditioning units. Sears, Roebuck had supplied this brand to Eaton’s for distribution in Canada, but the line switched it to Simpsons-Sears upon its founding.

"Jessica" is Sears Canada’s primary private label brand of women’s apparel and accessories, catering to the modern woman. It was introduced in 1987 and is the top-selling ladies’ fashion label in Canada.[30]

"Attitude" was a fashion-forward ladies’ fashion collection appealing to fashion conscious women with a sense of style and flair. It had been an Eaton’s exclusive house brand and Sears continued the name. In 2010, when Canadian fashion designer Jay Manuel became its exclusive designer, the line became Attitude by Jay Manuel. Manuel also added a men’s dresswear line to the collection. In 2013, Sears entered into a strategic alliance with the ALDO Group to design and manufacture Sears entire line of Attitude and Nevada footwear for men and women.[31]

"Nevada" is Sears Canada’s main line of denim and casual wear for both children and adults. Introduced along with a revamp of apparel house brands in 1987, it features updated styling with attention to detailing, fit and durability, reminiscent of the quality found in contemporary western fashions. It followed in the footsteps of another long-popular but more utilitarian Sears jeans line, "Toughskins", which dominated in the 1970s. In 2013, Sears entered into a strategic alliance with Buffalo International Inc. to design and manufacture Sears' entire line of Nevada denim-based apparel (cited above).

See also

References

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  6. ↑ A National Institution: The Eaton's Chronology The Globe and Mail. February 19, 2002 (table reprinted by Western Libraries)
  7. ↑ Lua error in package.lua at line 80: module 'strict' not found.
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  12. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  13. ↑ Sears faces uncertain future in Canada: analyst | CTV News
  14. ↑ Sears faces uncertain future in Canada: analyst | CTV News
  15. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  16. ↑ Lua error in package.lua at line 80: module 'strict' not found.
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  25. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  26. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  27. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  28. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  29. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  30. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  31. ↑ Lua error in package.lua at line 80: module 'strict' not found.

External links

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