The times they are a’ changin’. And that was made clearer than ever for retailers last week as former mega-store Sears Canada announced it is going out of business.
According to a release put out Tuesday, October 10, 12,000 people are losing their jobs in the aftermath of the decision. Sears Canada has 74 full department stores, eight Sears Home stores, and roughly 49 Sears Hometown stores facing closure.
Liquidation sales are starting October 19 and will last 10 to 14 weeks.
While a large decision, the news is far from a surprise. Sears Canada has been scaling back its operations since 2013 when it shut down five locations, including its flagship store at the Toronto Eaton Centre.
The struggles continued until June of 2017, when Sears Canada sought creditor protection and began liquidating its assets. The company was delisted from the Toronto Stock Exchange in July. On September 29, the company announced its decision to close 11 stores.
Of the 12,000 employees being laid off, about three-quarters are part-time. Roughly 800 employees in Sears Canada’s home office will leave next week.
“The company deeply regrets this pending outcome and the resulting loss of jobs and store closures,” Sears Canada said in a statement on Tuesday.
In addition to its in-store presence, Sears was known widely for its catalogue department. Many of us can remember getting the Christmas Wish Book and circling the toys we wanted most for the holidays. When Sears first came to Canada 65 years ago, they were entirely mail-order based. Over time, they began opening stores as demand increased. In 1998, they became one of the first retailers to open an e-commerce website. But despite early innovations, they failed to keep up with changing times.
A recent study determined that 28% of Canadians have shopped at a Sears store in the past years. In-store visits were strongest in small towns with more frugal fashion taste. 65% of shoppers in the past year were over the age of 45.
The study was conducted in a partnership between DIG360 and Leger. David Ian Gray of DIG360 told Retail Insider that loyal Sears shoppers, who tend to be older and don’t spend as much, will miss the store the most.
With the closure comes opportunity and a butterfly effect for all retailers. The stores that are leaving malls will leave vacant retail space — some of the most valuable retail space in Canada as Sears has occupied many of those locations since the 1970s and 1980s. Especially in malls where Sears was the anchor store, those shopping centres could struggle as they search for a replacement. In addition, Sears Canada could sell some real estate to third parties, which means mall landlords might not even get a say in who fills the spaces.
The times, they are a’changin’ — and it looks like they will continue to change as Canadians adjust to the loss of an iconic retailer.