September 07, 2013
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Canadian retail has been transforming due to a combination of factors such as economic conditions, demographic shifts and changes in consumer behavior.
Compared to the US, Canada’s economic conditions are good for retail market expansion. The economy has been less volatile than in the US.
Sales-per-square-foot is significantly higher than in the US. The Canadian dollar has been strong. Disposable income is higher than in the US, and online shopping isn’t overpowering bricks and mortar as quickly as in the US.
Target is notably trying to change the retail landscape. It acquired about 200 Zellers department store locations from the Hudson’s Bay Company for $1.8 billion.
If you’ve seen the stores lately, you’d likely notice that Target is investing quite a bit in remodeling, and Zellers is disappearing. In fact, the company just reported that the cost of expanding into Canada created a drag on earnings in the second quarter. That said; Target still expects a $6 billion business in Canada within five years.
And, there is a long list of other retailers following suit including: Marshalls, J. Crew, Ann Taylor, Nordstrom, and others.
One surprising retailer with strong presence up North – Sears. According to the company, they have 475 full-line and specialty retail stores, as well as 1,512 catalog pick-up locations, nine home services showrooms, and 101 travel offices in Canada.
They say there is a Sears location within a 10-minute drive of 93% of all Canadians – which is no small feat in the world’s second-largest country by total area. Sears Canada has a market cap of about $1.2 billion; 51% which is still owned by Sears Holdings. The maple leaf is a interesting little gold nugget in the Sears portfolio.
Posted by:Dan Sanker
