Is Sears Canada planning more fire sales?
It was just in late February that Sears Canada vacated its flagship store in Toronto’s Eaton Centre following a weeks-long campaign to hurriedly sell off everything that wasn’t bolted down.
Already, calls are emerging that consumers could see fire sales at several more locations in the months ahead – providing consumers yet again with ample savings on everything from home appliances to furniture to clothing.
“We expect sales,” experts at investment researcher Desjardins Capital Markets said Tuesday.
They were talking about Sears Canada selling more department stores and leases. The ailing retailer sold seven leases last year, including its Eaton Centre crown jewel.
But Desjardins might as well be talking about what will precede the expected retreat from between five and 10 more locations Sears is said to be considering selling back to mall owners and other landlords.
For a taste of what to expect, a detailed account of the last days of Toronto department store can be found here.
Sales at Sears Canada fell nearly 10 per cent in the latest quarter, partly impacted by store closures. But a downward slope in revenues has persisted for some time.
High-end fills void
Evidence of that shift can be seen in who is showing the most interest in moving into former Sears locations. The names are predominantly in the high-end category.
U.S. luxury retailer Nordstrom will open its doors at Sears’ former Eaton Centre location in 2016.
Hudson’s Bay is taking up some of the slack, too, while Desjardins said Tuesday it expects rival luxury retail operators like U.S.-based Nieman Marcus and Canada’s Holt Renfrew to take a look at former Sears properties.
Canadian Tire is also keen to expand square footage for its Sport Chek chain, which is opening new regional flagship stores this year and next, experts say.
Shopper and shareholder returns
Sears meanwhile is channelling a good portion of the hundreds of millions of dollars it’s netting from its structured Canadian downsizing back into its U.S. parent, which is flowing it into the bank accounts of shareholders.
And experts don’t foresee much of a turnaround happening in Canada.
“We do not foresee a return to operating profitability in the forecast period,” Desjardins analysts said.
Meanwhile, “The ongoing shrinkage of Sears Canada benefits other retailers,” they noted.
And for those who can score a deal or two on Sears’ way out, shoppers too.
WATCH: Sears to close its flaship Eaton Centre location in Toronto
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