Sears Canada

Sears Canada Inc.

Formerly called	Simpsons-Sears (1952–1984)
Type	Public
Traded as	TSX: SCC
Industry	Retail
Founded	1952 (joint venture of Simpson's and Sears)
Headquarters	290 Yonge Street Suite 700 (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 and tools.
Revenue	$3.146 billion (2015)[2]
Net income	-$67.9 million (2015)[2]
Total equity	$554.2 million (2015)[2]
Number of employees	17,903 (2016)[3]
Subsidiaries	SLH Transport
Website	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 10% share in the company.^[4][5] ESL Investments is the largest shareholder of Sears Canada.

In 2016, the retailer had 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.^[6]

After filing for creditor protection in June 2017, Sears Canada announced that they would be closing 20 full-line locations, 15 Home stores, 10 Outlet stores and 14 Sears Hometown stores.^[7] The store closings will result in 2,900 employee layoffs.^[8]

Corporate history

Simpsons-Sears

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 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 and Winnipeg's Polo Park, this meant that Sears Canada managed two anchor stores (Eatons and Sears) in those malls for a short 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 specialty stores squeezing out the middle market which is the base of the traditional department store.^[9]

In 2005, Sears Card financial services were outsourced to JPMorgan Chase. 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.^[10]

Attempted privatization, new leadership

In January 2006, Sears Holdings Inc., the parent company and majority shareholder of Sears Canada. 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.^[11] 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.^[12] 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.^[13] 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.^[14]

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.

Same-store sales were down 4% in 2010, compared to 6.8% in 2009.^[2][15] In December 2011, after slow sales over the holiday season, Sears laid off 70 employees from its head office after losing nearly $47 million in the previous quarter.^[16]

In June 2011, Calvin McDonald, formerly of Loblaw Companies, was named president of CEO of Sears Canada. McDonald planned to restructure the company's operations under a three-year plan, in the wake of increased competition and economic uncertainties. He explained that "we are in the situation that we are in because we stopped doing the things that make great retailers great. We traded ourselves into this challenge and we will trade ourselves out of it." The company had posted a $44.1 million loss in 2010, but had recovered to $21.9 million by the third quarter of 2011. Among the planned changes were to build upon market segments where Sears had historically performed well (including appliances, dresses, children's wear and related products, and mattresses), and introduce a new store format with a more "engaging" layout.^[17] In 2012, Sears sold three stores in Calgary, Ottawa, and Vancouver (Chinook Centre, Rideau Centre, and Pacific Centre) back to Cadillac Fairview for $170 million.^[5] Sears also sold its Deerfoot Mall location in Calgary, as well as its locations at Square One Shopping Centre and Yorkdale Mall.^[18] Sears Holdings also distributed shares in the company to Sears Canada's shareholders, reducing its holdings to 51%. Sears Holdings Corporation's chairman and CEO, Edward Lampert, has a 27% stake in Sears Canada.^[5] In April 2013, the company began to scale back some of its product offerings, dropping electronics and window coverings, and making toys online-only.^[19]

In September 2013, Douglas C. Campbell took over as Sears Canada's COO.^[20] The following month, Sears Canada announced that it would close five of its major urban stores and sell them back to their respective landlords, including its flagship Toronto Eaton Centre location, as well as two other locations in Toronto, one in London, and one in Richmond, British Columbia. Campbell explained that "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. 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".^[18]

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.^[21]

In late 2013, SHS Services Management, 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.^[22]

Rebranding, new store formats

On August 24, 2016, Sears Canada unveiled a new corporate logo, consisting of a black wordmark and a red stencil of a maple leaf, to replace the blue striped wordmark that had previously been used by its U.S. counterpart. The new logo . Executive chairman Brandon Stranzl stated that the new logo presented a "modern and streamlined image".^[23]

In its second quarter earnings report, Sears Canada announced that it was developing a new store concept dubbed "Sears 2.0", which it planned to test at several of its current locations.^[24] In September 2016, Sears officially unveiled the new store format at its Promenade and Mapleview Centre locations, with a media launch day on September 27, 2016.^[25] The new format was designed to have a more open layout with fewer permanent displays and partitions, providing more flexibility in how departments are arranged and stocked. The footwear department was also 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.^[26][27] The new format was also being implemented as a renovation of the Stone Road Mall location in Guelph.^[28]

In December 2016, Sears Canada announced plans to add grocery sections in three-to-five remodelled stores in 2017.^[29] The selection would be primarily organic, with a focus on low cost and e-commerce.^[30]

Restructuring

On June 13, 2017, citing that there were "material uncertainties" over whether the company would have enough cash flow to meet its financial obligations over the next year, and "significant doubt as to the company's ability to continue as a going concern", Sears Canada announced that it had hired advisors to explore a potential restructuring or sale of the company.^[31] On June 22, 2017, Sears Canada announced that it had commenced Court-supervised restructuring proceedings under the Companies' Creditors Arrangement Act, and that it would close a total of 59 stores (including 20 department stores, 15 Sears Home stores, 14 Sears Hometown stores, and 10 Sears Outlet stores) over an unspecified time period. These closures will result in the loss of 2,900 employees. The company also planned to exit several market segments (including home appliances and electronics, auto parts, and tools) in order to focus more on profitable segments such as fashion. Despite these moves, the company stated that its new strategies and positioning were "starting to resonate with consumers", citing increasing same-store sales over the previous two quarters.^[32]

On July 18, 2017, Sears Canada received court approval to begin liquidating the inventory of the 59 closing locations on July 21, 2017, appointing Gordon Brothers and Merchant Retail Solutions to manage the liquidation of the department and Sears Home stores. Per the formal plan submitted in court documents, the terms "bankruptcy", "going out of business", or "liquidation" cannot be used to promote these sales.^[33][34] Liquidation of the Hometown stores will be managed by their franchisees; the move to close the stores was criticized by several of their owners; the owners of five Alberta dealers reported that most of their locations were still profitable, and stated that due to the restructuring proceedings, they were losing out on compensation prescribed by their contracts with Sears if the retailer terminates their them early.^[35]

Amid the restructuring, Sears Canada was criticized for its treatment of the laid off employees, including that the company planned to issue a total of $7.6 million in retention bonuses to 43 executives and senior managers, and $1.6 million to senior employees at stores that are closing, but did not plan to offer severance pay to the laid off employees. These concerns resulted in calls over social media to boycott the company. Sears Canada defended the decisions, stating that the retention payments were necessary in order to maintain its senior staff going forward.^[36][37]

Store formats and channels

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. In June 2017 Sears announced 10 remaining outlet stores would also close.

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.^[38] 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.^[39]

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.^[40] 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.^[41] 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.^[42] 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.^[43] 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" was Sears Canada’s primary private label brand of women’s apparel and accessories, catering to the modern woman. It was introduced in 1987 and was the top-selling ladies’ fashion label in Canada.^[44]

"Attitude" was a fashion-forward ladies’ fashion collection appealing to fashion conscious women. 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.^[45]

"Nevada" was 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 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).

In 2016, with the rollout of the Sears 2.0 concept, Sears Canada amalgamated most of its house brands into the Sears Woman, Sears Man, Sears Kids and Sears Home labels.

See also

• List of Canadian department stores
• Sears (Mexico)
• Merchandise Building

References

External links

Wikimedia Commons has media related to Sears Canada.

• Official website