balenciaga
Banned
it is time to let it go. What a waste of retail space.
A Macy's or Nordstrom would be nice.
A Macy's or Nordstrom would be nice.
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James
Senior Member
If you ever walk through a Sears at Yorkdale Mall or Fairview Mall, you'll notice that the majority of people walking through it are doing so because they parked their car near that store entrance due to so few people shop at Sears and thus more parking at that side of the mall!
Filip
Senior Member
Sherway is the best for this. Nobody parks by the Sears lower level entrance.. Nobody! You can find a good spot near the doors instead of spending 20 mins circling around the rest of the mall.
G
gabe
Guest
Like me! i as soon as i pull into a mall's parking lot, i head for parking spaces outside of Sears entrance! lol I do browse the store but the clothing brands don't appeal to me, and the Craftsman tools aren't as good as they used to be. Now a days i do most of my hardware shopping at Lowe's or Home Depot.
toforumer
Active Member
Sears just laid off 700 employees. It looks inevitable that Sears will evenutally go out of business in Canada.
Skeezix
Senior Member
This will resonate with Filip, James and Gabe, based on their comments above.
Sears’s struggles make for good parking, bad stock
DARCY KEITH
The Globe and Mail
Published Thursday, Jan. 31 2013, 3:30 PM EST
Last updated Thursday, Jan. 31 2013, 3:43 PM EST
If it weren't for Sears Canada, visits to my nearest mall, Yorkdale Shopping Centre, would begin in sheer frustration.
Yorkdale is an immensely popular place: its trendy and abundant stores attract about half a million visitors every week. There’s high demand for the 7,200 parking spaces that surround the 1.6 million square foot mall in northern Toronto, one of the biggest in Canada.
In the past, I’ve spent 20 minutes or more in an excruciating search for a single, unoccupied spot.
Then I learned an easier way – just drive to the lot outside Sears, where I usually find plenty of vacancies.
That extra convenience for me probably isn’t good news for the embattled retailer.
I don’t know if everyone knows my parking trick, but many others enter Sears just to get to the rest of the mall. The moment you step in, it’s instantly clear the department store is struggling. While its fresh new-look store design is brighter, more modern and with wider aisles – there aren’t a lot of shoppers to fill them.
The grim situation was made more evident on Thursday, when the company announced it was laying off 700 workers from its distribution centres and department stores.
You can quickly see what ails Sears Canada just by doing a quick scan of comments left on recent stories about the retailer. Dull fashions, messy stores, poor customer service…. the complaints go on.
These are all things that Calvin McDonald, who took on the challenging role of CEO in 2011, has set out to change. And indeed, some stores are less cluttered, products have been streamlined and better presented, clothing lines are a bit more youthful and hip, and there’s a new warm and fuzzy marketing campaign.
And yet Sears had a brutal holiday season, with sales at the Canadian chain in the nine weeks to the end of December falling 5.8 per cent from a year earlier, when sales were already weak. Sears Holdings Corp., which trimmed its stake in the Canadian unit from to 51 per cent from 95 per cent last year, has warned that Sears Canada’s fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization would fall by about half.
In the grand old Canadian spirit, Sears partly blamed the poor performance on the weather, citing the “unseasonably warm temperatures in parts of Canada.”
If only fixing Sears Canada’s problems were as simple as having some arctic air blast in from the north. True, overall it was a pretty ho-hum holiday season last year for retailers in the country, but note that rival the Bay saw a bump of 6.7 per cent in same-store sales for the same nine weeks.
Indeed, on a recent visit, I noticed the Bay right next door to the Sears in Yorkdale was doing much brisker business despite undergoing extensive remodeling that had scaffolding and plastic construction lining spread throughout the store.
Yorkdale is just one of 118 Sears Canada locations in the country. But it constantly ranks in the top five malls in North America for highest sales per square foot. There’s a lot of money to be made if Sears can convince consumers to visit, open their wallets and come back again.
But as Mr. McDonald admits, the turnaround isn’t happening as fast as hoped, and I couldn’t blame any shareholder for wanting to take the stock back to returns.
Not that they are likely to get a full refund, mind you. Shares are trading at 12-year lows and the trend is still down.
Fearless value hunters may be left wondering whether the retailer is going for a fire-sale price and this is the time to buy shares. Perhaps – but I wouldn’t bet on it, not with the arrival of Target within weeks, to be followed soon after by other aggressive U.S. retailers, including Nordstrum.
A key problem: by becoming more contemporary and fashion-conscious, Sears Canada is positioning itself to compete even more head-to-head with Target – a department store Canadians just can’t wait to visit. And it won’t help that 37 per cent of Sears’ stores are within a one-kilometre drive of the planned Target outlets.
Sears Canada does hold leases to many sought-after locations at attractive terms, and has significant real estate assets. If the turnaround fails, or if it needs cash in a hurry, those could prove valuable.
It’s still early in Mr. McDonald’s three-year revamp and Sears Canada’s balance sheet, with virtually no debt, does provide some breathing room. But investors could probably do better looking elsewhere in the retail sector.
For me, I’m just thankful for the parking space.
Sears’s struggles make for good parking, bad stock
DARCY KEITH
The Globe and Mail
Published Thursday, Jan. 31 2013, 3:30 PM EST
Last updated Thursday, Jan. 31 2013, 3:43 PM EST
If it weren't for Sears Canada, visits to my nearest mall, Yorkdale Shopping Centre, would begin in sheer frustration.
Yorkdale is an immensely popular place: its trendy and abundant stores attract about half a million visitors every week. There’s high demand for the 7,200 parking spaces that surround the 1.6 million square foot mall in northern Toronto, one of the biggest in Canada.
In the past, I’ve spent 20 minutes or more in an excruciating search for a single, unoccupied spot.
Then I learned an easier way – just drive to the lot outside Sears, where I usually find plenty of vacancies.
That extra convenience for me probably isn’t good news for the embattled retailer.
I don’t know if everyone knows my parking trick, but many others enter Sears just to get to the rest of the mall. The moment you step in, it’s instantly clear the department store is struggling. While its fresh new-look store design is brighter, more modern and with wider aisles – there aren’t a lot of shoppers to fill them.
The grim situation was made more evident on Thursday, when the company announced it was laying off 700 workers from its distribution centres and department stores.
You can quickly see what ails Sears Canada just by doing a quick scan of comments left on recent stories about the retailer. Dull fashions, messy stores, poor customer service…. the complaints go on.
These are all things that Calvin McDonald, who took on the challenging role of CEO in 2011, has set out to change. And indeed, some stores are less cluttered, products have been streamlined and better presented, clothing lines are a bit more youthful and hip, and there’s a new warm and fuzzy marketing campaign.
And yet Sears had a brutal holiday season, with sales at the Canadian chain in the nine weeks to the end of December falling 5.8 per cent from a year earlier, when sales were already weak. Sears Holdings Corp., which trimmed its stake in the Canadian unit from to 51 per cent from 95 per cent last year, has warned that Sears Canada’s fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization would fall by about half.
In the grand old Canadian spirit, Sears partly blamed the poor performance on the weather, citing the “unseasonably warm temperatures in parts of Canada.”
If only fixing Sears Canada’s problems were as simple as having some arctic air blast in from the north. True, overall it was a pretty ho-hum holiday season last year for retailers in the country, but note that rival the Bay saw a bump of 6.7 per cent in same-store sales for the same nine weeks.
Indeed, on a recent visit, I noticed the Bay right next door to the Sears in Yorkdale was doing much brisker business despite undergoing extensive remodeling that had scaffolding and plastic construction lining spread throughout the store.
Yorkdale is just one of 118 Sears Canada locations in the country. But it constantly ranks in the top five malls in North America for highest sales per square foot. There’s a lot of money to be made if Sears can convince consumers to visit, open their wallets and come back again.
But as Mr. McDonald admits, the turnaround isn’t happening as fast as hoped, and I couldn’t blame any shareholder for wanting to take the stock back to returns.
Not that they are likely to get a full refund, mind you. Shares are trading at 12-year lows and the trend is still down.
Fearless value hunters may be left wondering whether the retailer is going for a fire-sale price and this is the time to buy shares. Perhaps – but I wouldn’t bet on it, not with the arrival of Target within weeks, to be followed soon after by other aggressive U.S. retailers, including Nordstrum.
A key problem: by becoming more contemporary and fashion-conscious, Sears Canada is positioning itself to compete even more head-to-head with Target – a department store Canadians just can’t wait to visit. And it won’t help that 37 per cent of Sears’ stores are within a one-kilometre drive of the planned Target outlets.
Sears Canada does hold leases to many sought-after locations at attractive terms, and has significant real estate assets. If the turnaround fails, or if it needs cash in a hurry, those could prove valuable.
It’s still early in Mr. McDonald’s three-year revamp and Sears Canada’s balance sheet, with virtually no debt, does provide some breathing room. But investors could probably do better looking elsewhere in the retail sector.
For me, I’m just thankful for the parking space.
Last edited:
James
Senior Member
Thanks for the link to the article, Skeezix, I was seriously wondering if I was the only one aware of the Sears parking trick. 
On a serious note though, it does sadden me that another Canadian retailer is going to go under...and another American outfit coming up to, in a way, capture that same market. The real sad part, in my opinion, is that Sears should have seen this coming (I mean, we all did) and should've implemented an effective evolution/rebranding plan years ago. All this talk about being too complacent and falling behind innovative competitors is simply too Research In Motion-esque.
On a serious note though, it does sadden me that another Canadian retailer is going to go under...and another American outfit coming up to, in a way, capture that same market. The real sad part, in my opinion, is that Sears should have seen this coming (I mean, we all did) and should've implemented an effective evolution/rebranding plan years ago. All this talk about being too complacent and falling behind innovative competitors is simply too Research In Motion-esque.
toforumer
Active Member
Thanks for the link to the article, Skeezix, I was seriously wondering if I was the only one aware of the Sears parking trick.
On a serious note though, it does sadden me that another Canadian retailer is going to go under...and another American outfit coming up to, in a way, capture that same market. The real sad part, in my opinion, is that Sears should have seen this coming (I mean, we all did) and should've implemented an effective evolution/rebranding plan years ago. All this talk about being too complacent and falling behind innovative competitors is simply too Research In Motion-esque.
Sears is American.
Skeezix
Senior Member
Yes and no. Sears Canada has been majority owned by the U.S. Sears since the Competition Tribunal ordered HBC to sell off the old Simpsons share (1980s IIRC). But unlike most Canadian branches of U.S. retailers, Sears Canada is not wholly owned by the U.S. parent (Sears Holdings' interest in the Cdn co is now down to 51%), it's separately listed on the TSX and has traditionally been run relatively independently from the U.S. chain. I wouldn't call it a Canadian retailer in the same way I'd use the term to describe Roots or Lululemon, but I also wouldn't call it an American retailer the same way I'd use that term to describe Wal-Mart Canada.
And I totally get it when James says it saddens him that "another Canadian retailer is going to go under", given the history of Simpsons Sears, etc.
James
Senior Member
Good clarification, Skeezix. As much as I hate referencing Wikipedia pages, the Sears Canada Wiki has more details should one be interested in reading more about it.
http://en.wikipedia.org/wiki/Sears_Canada
I've spoken to many at the corporate level in this retail industry and it's sort of a given that Sears Canada is considered a Canadian company, despite the Sears roots being American.
http://en.wikipedia.org/wiki/Sears_Canada
I've spoken to many at the corporate level in this retail industry and it's sort of a given that Sears Canada is considered a Canadian company, despite the Sears roots being American.
DavidJamesTO
Active Member
I find pre-free trade and post-free trade companies with US parents tend to be treated differently by consumers. Pre-free trade companies had a longer history as domestic employers and producers for domestic markets, while for other companies Canada is just one branch of a company going or gone global. That's why companies like GM and Sears are "Canadian" but Apple and Nordstrom are not.
Admiral Beez
Superstar
Doesn't look good http://www.hirmagazine.com/home_improvement_news.php
Sears Revenue Declines
Sears Canada Inc.’s total revenues for the 14-week period ended February 2 were $1,298 million versus $1,365.9 million for the 13-week period ended January 28, 2012, a decrease of five per cent. Same store sales for the quarter decreased 3.8 per cent. Net earnings for the fourth quarter this year were $39.9 million versus $41 million for the fourth quarter of the prior year. Total revenues for the 53-week period ended February 2 were $4,300.7 million versus $4,619.3 million for the 52-week period ended January 28, 2012, a decrease of 6.9 per cent.
Sears Revenue Declines
Sears Canada Inc.’s total revenues for the 14-week period ended February 2 were $1,298 million versus $1,365.9 million for the 13-week period ended January 28, 2012, a decrease of five per cent. Same store sales for the quarter decreased 3.8 per cent. Net earnings for the fourth quarter this year were $39.9 million versus $41 million for the fourth quarter of the prior year. Total revenues for the 53-week period ended February 2 were $4,300.7 million versus $4,619.3 million for the 52-week period ended January 28, 2012, a decrease of 6.9 per cent.
Skeezix
Senior Member
Sears Canada weighs asset sales in race to become ‘relevant’
Marina Strauss - Retailing Reporter Toronto
Toronto — The Globe and Mail
Published Thursday, Apr. 25 2013, 12:02 PM EDT
Last updated Thursday, Apr. 25 2013, 12:59 PM EDT
Retailer looks to bolster struggling business amid tougher competition, including Target's entry into the market
Sears Canada Inc. will continue to consider selling off non-strategic assets as it races to bolster its struggling business amid tougher competition.
While the department-store retailer is determined to follow through on its turnaround efforts and operate as a retailer, it will look at opportunities as they arise to sell operations and even stores, chief executive officer Calvin McDonald said on Thursday morning.
In a $170-million deal last year, Sears sold leases of three its stores, including the one in downtown Vancouver, back to their landlord, Cadillac Fairview Corp. It turned around and sold the leases to U.S. upscale rival Nordstrom Inc., which will open its first outlet in Canada next year, putting more pressure on incumbents.
Retailers such as Sears also feel the heat from U.S. Target Corp. which launched its first stores here last month and plans to operate 124 by the end of 2013.
At Sears' annual meeting on Thursday morning, Mr. McDonald said he doesn't intend to exit more store locations but said he would do the "due diligence" if opportunities came up to "create value."
"We're here to remain in Canada to trade and become a relevant retailer," Mr. McDonald, a former Loblaw Cos. Ltd. executive said in reply to a shareholder's question. "In that there are non-strategic assets that we own today, if the opportunity is right to create value through those, we will explore those opportunities."
Some of those opportunities don't directly relate to retailing although support it in some way "but we can look at other ways to do it," he said, suggesting outsourcing some operations is a possibility.
"There are a variety of those that we're looking at. But nothing to disclose at this point in time. But it is something that we're willing to consider."
Mr. McDonald has rushed to implement a three-year revival plan, now in its second year, lowering prices, dropping or reducing low-profit categories such as electronics, focusing on promising "hero" shops such as ladies dresses and men's suits while sprucing up stores.
He told shareholders that in areas that he has focused on, he's starting to see sales gains. For example, in the second half of last year, same-store sales at outlets open a year or more rose in "hero" categories of appliances, mattresses, dresses, suits, kids products and kitchen ware.
Items that Sears touted in its new Look Report promotional magazine generated three times higher checkout rates than typically advertised items, he said. And, critically, 40 per cent of customers who shopped items in the latest Look Report were under the age of 44, compared with just 16 per cent in February prior to the publication being released, his research found.
He's determined to lure back younger, style-savvy shoppers to Sears with new offerings, he said. "We lost our rhythm and we lost our confidence," he said. "We need to think differently. We need to act differently and we need to change our behaviour ...
"Although we still have work to do on getting the basics, we made good gains last year. This business has a pulse."
He told reporters later that he's looking to eliminate a further $100-million to $200-million of costs from the business in the next few years after having already removed about $100 million of expenses in the past couple of years. He said "right-sizing" and outsourcing are two strategies on his to-do list. In January, the company let go 700 employees.
And on a bright note, he said Target's entry so far in Ontario - it launched its first 24 stores last month - has had a positive effect on Sears' sales at the 19 locations where the two retailers are close by to one another.
Target has helped bring more traffic to the area, with some of those shoppers heading to Sears, he said. It helped that it ran "Sears Days" promotions when Target's stores started to open, he said.
In its fourth quarter, which includes the critical holiday shopping season, Sears revenue fell 5 per cent to $1.29-billion. Sales at established stores fell 3.8 per cent on lower sales of home electronics and snow blowers. It was its 16th straight quarter of revenue drops.
Fourth-quarter profit fell about 3 per cent to $39.9-million or 39 cents a share. The number included a pretax gain of $29.7-million from a voluntary buyout program and the sale of a joint venture interest.
Mr. McDonald said on Thursday the retailer is re-balancing its mix of sales to focus more on growing categories. However its current balance includes more than 50 per cent of its sales that are tied to categories that are declining because they're linked to external factors such as the weak economy and the unpredictable weather. (Those categories are largely big-ticket items such as lawn mowers, barbecues and appliances.)
Unseasonably cool and rainy weather this spring has put a damper on retailers' sales in general.
"With some luck, total sales can be strong," he said. "Without luck, total sales will be challenged."
Still, even with the unco-operative weather, Sears this spring has been able to sell more than 25 per cent of its stock of a $499 gas barbecue at full price - one of the products that it is betting heavily on, he said. In the winter, it sold 96 per cent of a $179 men's bomber jacket at full price - another product that Sears touted heavily.
Marina Strauss - Retailing Reporter Toronto
Toronto — The Globe and Mail
Published Thursday, Apr. 25 2013, 12:02 PM EDT
Last updated Thursday, Apr. 25 2013, 12:59 PM EDT
Retailer looks to bolster struggling business amid tougher competition, including Target's entry into the market
Sears Canada Inc. will continue to consider selling off non-strategic assets as it races to bolster its struggling business amid tougher competition.
While the department-store retailer is determined to follow through on its turnaround efforts and operate as a retailer, it will look at opportunities as they arise to sell operations and even stores, chief executive officer Calvin McDonald said on Thursday morning.
In a $170-million deal last year, Sears sold leases of three its stores, including the one in downtown Vancouver, back to their landlord, Cadillac Fairview Corp. It turned around and sold the leases to U.S. upscale rival Nordstrom Inc., which will open its first outlet in Canada next year, putting more pressure on incumbents.
Retailers such as Sears also feel the heat from U.S. Target Corp. which launched its first stores here last month and plans to operate 124 by the end of 2013.
At Sears' annual meeting on Thursday morning, Mr. McDonald said he doesn't intend to exit more store locations but said he would do the "due diligence" if opportunities came up to "create value."
"We're here to remain in Canada to trade and become a relevant retailer," Mr. McDonald, a former Loblaw Cos. Ltd. executive said in reply to a shareholder's question. "In that there are non-strategic assets that we own today, if the opportunity is right to create value through those, we will explore those opportunities."
Some of those opportunities don't directly relate to retailing although support it in some way "but we can look at other ways to do it," he said, suggesting outsourcing some operations is a possibility.
"There are a variety of those that we're looking at. But nothing to disclose at this point in time. But it is something that we're willing to consider."
Mr. McDonald has rushed to implement a three-year revival plan, now in its second year, lowering prices, dropping or reducing low-profit categories such as electronics, focusing on promising "hero" shops such as ladies dresses and men's suits while sprucing up stores.
He told shareholders that in areas that he has focused on, he's starting to see sales gains. For example, in the second half of last year, same-store sales at outlets open a year or more rose in "hero" categories of appliances, mattresses, dresses, suits, kids products and kitchen ware.
Items that Sears touted in its new Look Report promotional magazine generated three times higher checkout rates than typically advertised items, he said. And, critically, 40 per cent of customers who shopped items in the latest Look Report were under the age of 44, compared with just 16 per cent in February prior to the publication being released, his research found.
He's determined to lure back younger, style-savvy shoppers to Sears with new offerings, he said. "We lost our rhythm and we lost our confidence," he said. "We need to think differently. We need to act differently and we need to change our behaviour ...
"Although we still have work to do on getting the basics, we made good gains last year. This business has a pulse."
He told reporters later that he's looking to eliminate a further $100-million to $200-million of costs from the business in the next few years after having already removed about $100 million of expenses in the past couple of years. He said "right-sizing" and outsourcing are two strategies on his to-do list. In January, the company let go 700 employees.
And on a bright note, he said Target's entry so far in Ontario - it launched its first 24 stores last month - has had a positive effect on Sears' sales at the 19 locations where the two retailers are close by to one another.
Target has helped bring more traffic to the area, with some of those shoppers heading to Sears, he said. It helped that it ran "Sears Days" promotions when Target's stores started to open, he said.
In its fourth quarter, which includes the critical holiday shopping season, Sears revenue fell 5 per cent to $1.29-billion. Sales at established stores fell 3.8 per cent on lower sales of home electronics and snow blowers. It was its 16th straight quarter of revenue drops.
Fourth-quarter profit fell about 3 per cent to $39.9-million or 39 cents a share. The number included a pretax gain of $29.7-million from a voluntary buyout program and the sale of a joint venture interest.
Mr. McDonald said on Thursday the retailer is re-balancing its mix of sales to focus more on growing categories. However its current balance includes more than 50 per cent of its sales that are tied to categories that are declining because they're linked to external factors such as the weak economy and the unpredictable weather. (Those categories are largely big-ticket items such as lawn mowers, barbecues and appliances.)
Unseasonably cool and rainy weather this spring has put a damper on retailers' sales in general.
"With some luck, total sales can be strong," he said. "Without luck, total sales will be challenged."
Still, even with the unco-operative weather, Sears this spring has been able to sell more than 25 per cent of its stock of a $499 gas barbecue at full price - one of the products that it is betting heavily on, he said. In the winter, it sold 96 per cent of a $179 men's bomber jacket at full price - another product that Sears touted heavily.
Northern Light
Superstar
Having updated the relevant mall threads....
Sears has sold back its leases to landlord Oxford property at both Yorkdale Mall and Square One.
Source: Retail Insider:
http://www.retail-insider.com/2013/06/sears-canada-sells-its-yorkdale-and.html
Sears has sold back its leases to landlord Oxford property at both Yorkdale Mall and Square One.
Source: Retail Insider:
http://www.retail-insider.com/2013/06/sears-canada-sells-its-yorkdale-and.html
Skeezix
Senior Member
Apparently Scarborough Town Centre is also involved.
Seriously, though, what about the Toronto Eaton Centre store???
June 14, 2013
Sears cutting two key Toronto-area stores, may exit third
By MARINA STRAUSS
The Globe and Mail
Retailer selling leases back to landlord on Yorkdale, Square One outlets for $191-million plus option on Scarborough Town Centre store
Sears Canada Inc. is selling leases of two of its high-profile stores back to their landlords for $191-million plus options on a third store for $1-million that could raise another $53-million within five years.
The moves, announced on Friday morning, come as Sears races to revive its struggling business amid intensifying competition in Canada and the arrival of U.S. heavyweights Target Corp., which started to open its first stores here in March, and Nordstrom Inc., which launches in Canada next year.
Sears has agreed to sell the leases of its stores at Yorkdale Shopping Centre in Toronto and Square One Shopping Centre in Mississauga, Ont., back to their landlords, Oxford Properties Group and Alberta Investment Management Corp. (AIMCO,) for $191-million. Sears is to leave the sites by March 31, 2014.
And the department-store retailer has agreed to sell an option to its store at Scarborough Town Centre to the two landlords for $1-million, also to be paid by June 24, giving Oxford and AIMCO five years to exercise the option on the property for $53-million.
It's not the first time that Sears has raised money by selling its lucrative leases over the past year or so. Most notably, it sold its leases to three stores – including its Vancouver flagship – for $170-million to landlord Cadillac Fairview Corp. in 2012. Cadillac then sold the leases to Nordstrom, the upscale Seattle-based department-store retailer.
With scarce premium retail space in this country, landlords are eager to buy back leases of some current tenants and replace them with potentially higher-performing retailers. And U.S. retailers have been flocking to Canada, where mall merchants have generated higher sales-per-square foot than at their counterparts south of the border.
Oxford could now turn around and sell the leases that it is buying back from Sears selling to Nordstrom, industry observers suggested.
Calvin McDonald, chief executive officer of Sears who has spearheaded its revival efforts, said the retailer was "presented with an opportunity that gives us a significant financial benefit without changing our plans to improve the business and make Sears more relevant to Canadians."
In another initiative to raise money, Sears recently applied to the city of Burnaby for approval to redevelop 3.6 hectares of property it owns to build a $1-billion office and condominium tower complex.
Seriously, though, what about the Toronto Eaton Centre store???
June 14, 2013
Sears cutting two key Toronto-area stores, may exit third
By MARINA STRAUSS
The Globe and Mail
Retailer selling leases back to landlord on Yorkdale, Square One outlets for $191-million plus option on Scarborough Town Centre store
Sears Canada Inc. is selling leases of two of its high-profile stores back to their landlords for $191-million plus options on a third store for $1-million that could raise another $53-million within five years.
The moves, announced on Friday morning, come as Sears races to revive its struggling business amid intensifying competition in Canada and the arrival of U.S. heavyweights Target Corp., which started to open its first stores here in March, and Nordstrom Inc., which launches in Canada next year.
Sears has agreed to sell the leases of its stores at Yorkdale Shopping Centre in Toronto and Square One Shopping Centre in Mississauga, Ont., back to their landlords, Oxford Properties Group and Alberta Investment Management Corp. (AIMCO,) for $191-million. Sears is to leave the sites by March 31, 2014.
And the department-store retailer has agreed to sell an option to its store at Scarborough Town Centre to the two landlords for $1-million, also to be paid by June 24, giving Oxford and AIMCO five years to exercise the option on the property for $53-million.
It's not the first time that Sears has raised money by selling its lucrative leases over the past year or so. Most notably, it sold its leases to three stores – including its Vancouver flagship – for $170-million to landlord Cadillac Fairview Corp. in 2012. Cadillac then sold the leases to Nordstrom, the upscale Seattle-based department-store retailer.
With scarce premium retail space in this country, landlords are eager to buy back leases of some current tenants and replace them with potentially higher-performing retailers. And U.S. retailers have been flocking to Canada, where mall merchants have generated higher sales-per-square foot than at their counterparts south of the border.
Oxford could now turn around and sell the leases that it is buying back from Sears selling to Nordstrom, industry observers suggested.
Calvin McDonald, chief executive officer of Sears who has spearheaded its revival efforts, said the retailer was "presented with an opportunity that gives us a significant financial benefit without changing our plans to improve the business and make Sears more relevant to Canadians."
In another initiative to raise money, Sears recently applied to the city of Burnaby for approval to redevelop 3.6 hectares of property it owns to build a $1-billion office and condominium tower complex.