Beginning of the end for Zellers

[retailisking]

OK, they aren't closing, just having most of their leases purchased by Target, but another Canadian retail institution is clearly on the way out.  Question for our Canadian friends: who could take over the locations not appropriate for a Target?  Giant Tiger, maybe?
http://business.financialpost.com/2011/01/13/fp-marketing-target-canada-finally/

[Zayre88]

Zellers is done.  Target will slowly replace the stores.  Zellers claim they still will operate stores but I doubt it.  Unless they convert the brand to some kind of off-price liquidation store...

Giant Tiger is ok I guess but I think that most Zellers might be too big for them.  The Target transaction will leave 60 to 70 stores.

Some say it might also open the door to Kohl's and JCPenney.  They could jump in and pick up some location for a quick entry on the Canadian market.

[Zayre88]

Zellers announced today that they will close all remaining stores by March 2013.

Most of the 64 locations that aren’t being converted to Target department stores will close.

Some locations could reopen as part of other retail chains, Hudson’s Bay Company spokesperson Tiffany Bourré said.

[jmcnamara96]

Was listening to a Canadian Radio Station outta Quebec today and a Sears commercial saying that they would be carrying some of Zellers clothing lines or something after it goes out which is weird wouldn't Target take over there clothing lines?

[retailisking]

Everything must go at Zellers - including their mascot

http://www.thestar.com/business/article/1257789--zellers-prepares-to-close-so-what-happens-to-zeddy-the-bear

http://www.youtube.com/watch?v=y_rHRUOxUtA

[Zayre88]

Was listening to a Canadian Radio Station outta Quebec today and a Sears commercial saying that they would be carrying some of Zellers clothing lines or something after it goes out which is weird wouldn't Target take over there clothing lines?

Target probably does not want anything from Zellers.  They also only purchased the leases so everything Zellers including the name and private brands probably remains in the hands of the parent company, Hudson's Bay Co. which can then keep or sell them.

[IGA/Kmart Is Forever!]

I have never heard of Zellers until I saw them on post in the Kmart Topic. From the picture of the original Canadian Kmart Store that is now a Zellers, they look and seem to be a very nice discount department store. Does anybody know what has happened to them? Are they going out of business at all or did they just decide to sell the company for profit before they go out of business?

[Zayre88]

I have never heard of Zellers until I saw them on post in the Kmart Topic. From the picture of the original Canadian Kmart Store that is now a Zellers, they look and seem to be a very nice discount department store. Does anybody know what has happened to them? Are they going out of business at all or did they just decide to sell the company for profit before they go out of business?

Zellers used to be a nice chain.  They were the #1 chain in Canada for a long time.  In 1994, Walmart came to Canada by acquiring Woolco and since then, Zellers has been unable to stay competitive.

Zellers started to copy Kmart after acquiring "Kmart Canada" in 1998.  They began to sell Martha Stewart Everyday for example.  Then around 2002-2004 they started to remodel stores with a design very similar to Target stores.

In the end, Target offered to buy the majority of the Zellers leases to expand to Canada.  Zellers would have been left with around 70 stores (out of 275) but announced that they would close the remaining stores not long after the Target deal.

[IGA/Kmart Is Forever!]

It's too bad that they are deciding to close their last seventy remaining stores. It would have been nice to at least be able to see and shop at one of them before they shut down. There is no way possible that I will be able to make it to one of their stores before they close in 2013, due to the fact that The 2012 Holiday Season has already started.

[Zayre88]

Zellers released the list of store closing and soon all of them will be in closing sale.  All of the stores not yet closed or in a closing sale will start their liquidation sale on December 26th.

Target only acquired 189 sites out of 276 Zellers stores.  Zellers would have been left with a much smaller chain.  There were rumors about the company keeping Zellers but as a downsized discount store chain but in the end, Zellers wasted no time and decided to close stores and liquidate the balance at the same time of the ones sold to Target !!

[d_fife]

I went to a Zellers and I found them to be similar to target

[Zayre88]

8 days to go before the GOB sale begins at the stores still operating as usual.  In the province of Quebec, only 22 of 52 stores are still not in liquidation mode.

The last regular sales flyer will be published this week.  This week's flyer is already full of big sales even though it was still for the stores still open as usual:  50% off a lot of clothing, 60% on Xmas stuff, 40% on toys, 75% on luggage, 50% on furniture, 60% on cookware sets...

[retailisking]

Is there a reason why Zellers didn't liquidate all at once?

[Zayre88]

Is there a reason why Zellers didn't liquidate all at once?

It might be a lease thing.  Maybe not all transactions are complete or have certain dates to respect?

It may also be related to the time needed to renovate stores.  The ones that will be easy to renovate quickly may close later than others. (To maximize the profits instead of liquidating at deep discounts earlier).

Also Target does not open all at once in 2013.  There will be 2 or 3 waves of openings during the year.

It's probably a mix of all 3 reasons.

[Zayre88]

A Zellers closing in the city of Alma, Quebec.  It will not become a Target.  This store was a former Woolco.

[retailisking]

A Zellers closing in the city of Alma, Quebec.  It will not become a Target.  This store was a former Woolco.

What do you think it will become?

[Zayre88]

A Zellers closing in the city of Alma, Quebec.  It will not become a Target.  This store was a former Woolco.

What do you think it will become?

Hard to tell. The locations not picked by Target are often smaller stores, or stores in remote areas, or in unattractive malls or commercial parts of cities.

Alma is a town of about 30,000.  It's located 140 miles north of Quebec City.  That store has 108,000 sq.ft so there was room for a Target.  Maybe Target felt there was not enough potential and the area is also known to be pro-unions.

This Woolco became a Zellers for a reason (Walmart did not keep it in 1994).  I'm pretty sure the store will have to be divided in two or three spaces.

[retailisking]

There was a brutal showdown with the unions at the Walmart in Jonquiere, not all that far away from the soon-to-be-vacated Zellers in Alma. I was recently reminded (again) that Quebec can be a challenging place for chain stores with English names to do business.

http://www.torontosun.com/2012/10/15/big-box-stores-could-shut-down-over-quebec-language-threat-expert

[Zayre88]

There was a brutal showdown with the unions at the Walmart in Jonquiere, not all that far away from the soon-to-be-vacated Zellers in Alma. I was recently reminded (again) that Quebec can be a challenging place for chain stores with English names to do business.

http://www.torontosun.com/2012/10/15/big-box-stores-could-shut-down-over-quebec-language-threat-expert

It is challenging.  That law however, I think it is useless.  It does not hurt french that a business name is in English.  It will not protect french to add a french word to an English name.

Jonquiere, Alma, Saguenay, this region is very union-friendly.  I think it is the main reason for Target deciding to pass this time around.  Walmart will gain a lot when Zellers will be gone from these places and no Target is coming.

There are also markets like Drummondville and Victoriaville where the Zellers were too small.  It's obvious that Target will open there someday, but they will built from the ground up later.

[retailisking]

Do you think a Maxi & Cie would work there?

[Zayre88]

Do you think a Maxi & Cie would work there?

I guess but I don't know that market very well, maybe they already have a Maxi. 

I have read that the Zellers in Jonquiere will be divided in three or four spaces.  Mall owners decided to forget large tenants.  Apparently they already have 2 chains interested.

[Zayre88]

Many stores are now closed.  Stores in western Canada closed first and are under renovation.  The first Target stores will open in March-April (in a couple weeks).

Our local store is part the stores that began the closing sale on December 26.  Sales are not that good with most items at 10 to 30% off.  Signs are showing 20 to 60% off across the store.

Next month discounts will increase for sure.  The last days should have 80-90% off as seen at stores that have closed already.

[Zayre88]

24 former Zellers are getting ready to open as Target store in March-April, more will be added in May and in the summer, the balance in the fall.

For now there are roughly 140 Zellers stores still open. Our local store will close on March 14th.

So far discounts are supposed to be 30 to 70 percent off but there are still several items with 10 to 30 percent off which is pretty lame.

All groceries, candies, beverages, health & beauty and household products have 10-20% off and most of the time this discount puts the Zellers prices close to, or at the regular Walmart prices....   ???

[retailisking]

So far discounts are supposed to be 30 to 70 percent off but there are still several items with 10 to 30 percent off which is pretty lame.

All groceries, candies, beverages, health & beauty and household products have 10-20% off and most of the time this discount puts the Zellers prices close to, or at the regular Walmart prices....   ???

That's par for the course with liquidation sales. The goal is to generate as much revenue as possible, and that entails conning the rubes into thinking they're getting a better deal than they truly are. The merchandise with the biggest margins get the biggest discounts off normal retail. By the time the real discounts kick in on the most desired merchandise, a lot of the best stuff is already gone. Another tactic is to bring in inventory that was never sold in the store in the first place; have you seen any outside merchandise at your Zellers? Is your Zellers converting to Target, and if so, when?

[Zayre88]

That's par for the course with liquidation sales. The goal is to generate as much revenue as possible, and that entails conning the rubes into thinking they're getting a better deal than they truly are. The merchandise with the biggest margins get the biggest discounts off normal retail. By the time the real discounts kick in on the most desired merchandise, a lot of the best stuff is already gone. Another tactic is to bring in inventory that was never sold in the store in the first place; have you seen any outside merchandise at your Zellers? Is your Zellers converting to Target, and if so, when?

Yeah I know the strategy... It reminds me of the closing of Ames when the GOB ads were announcing spectacular savings like 40% off summer clothing and 70% off Gold jewelry, basically regular discounts that were common at Ames for years!

They also added merchandise never seen at Zellers like a ton of off-brand potato chips, unbranded socks with the price printed on the packaging and I've heard that they also god rid of some merchandise from the more expensive chain The Bay in some stores.

Our store will become a Target and I can't wait to see how they'll do it.  The store is only 85,000 sq.ft. and has a mall entrance (centered on one side of the store) and a second outside entrance centered in the front of the building.  I'm really wondering how they'll be able to fit the Target layout with these restrictions.

I've seen pictures of Target stores that are ready and several have simply moved the entrance from left to right or right to left of the buildings.  Our store could also expand a little because there are two vacant mall spaces along the store so Target could gain 1,800 sq.ft more.

Zellers will close March 14th, Target will open in the Fall, probably in September.  I'm looking forward to see how it will unfold.

[Ameskid]

...and 70% off Gold jewelry, basically regular discounts that were common at Ames for years!

They still offer the same discount at Kmart...and if you buy your jewelry at Kmart, you need to examine your tastes.  ;D

[Zayre88]

New count:

146 stores are closed
127 stores are still open

[Zayre88]

Our local Zellers store with 8 days to go:

[ynkeesfn82]

Never saw those signs in French before. Neat.

[IGA/Kmart Is Forever!]

Our local Zellers store with 8 days to go:

This looks like quite a nice store. Sad to see it shutting down. I would definitely take Zellers over Target, but at the same time take Kmart first and foremost.