Zellers: The end of an era

In the past year, the Hudson’s Bay Company announced that Zellers was not viable for them anymore, and that Target Corporation would be taking over its lease agreements (though not the Zellers brand or company itself). This post documents a brief history of the establishment of Zellers decades ago, specifically in my hometown of Saint John, and its disappearance from Calgary where I now live.

Zellers began in 1931 as a “store for thrifty Canadians” with the purchase of 16 Canadian locations from a U.S. retailer. Within 25 years, Zellers had 60 stores. Like many retailers, the chain initially operated only in the downtowns of cities. It wasn’t until 1960 when Zellers opened its first suburban location.

One early Zellers location was Store No. 3 on King Street in Saint John back in the 1950’s. Credit goes to Hudson’s Bay Company Heritage Services for sending me this photo along with these details about the store:

The building was originally constructed in 1850 and the Zellers store at this location opened in 1931.

A building description exists describing the building circa 1950: The building consists of a four-storey space and a basement; the building is of brick construction, with tar and gravel roof, wood sash, plaster walls, plaster and metal clad ceilings. Terrazzo floor on ground floor; upper floors soft and hardwood; basement composition tile on cement. Retail selling area is found on the ground floor and in the basement. Upper floors are used as stock rooms and offices.

On February 16, 1951, the store was completely destroyed by a fire. A new store was built and re-opened August 13, 1952. No information on how the fire was started is available.

Fields, another retailer, tried to make Zellers a subsidiary of itself in 1976. The owners of Zellers weren’t too happy about this and instead reversed the takeover to purchase Fields. Just a couple years later, Zellers presented a bid to acquire the Hudson’s Bay Company. This time, Zellers was instead acquired by HBC. By 1998, Zellers had over 350 stores across all provinces in Canada.

In the 2000’s, parent company HBC began to focus the upscale market. Zellers struggled and was seen as a drag on the rest of the company. By mid 2012, HBC announced that it had sold the majority of Zellers lease agreements to Target Corporation for C$1.825 billion, and that other locations not included in the deal would be closed. To put the value of the lease agreements into perspective, the entire Hudson’s Bay Company was purchased by an American buyer in 2006 for only $1.1 billion.

All stores entered liquidation at different times throughout 2012.

The days of organizing and cleaning aisles are apparently over at this Zellers store. Once a store begins liquidation, control of it is usually transferred to a liquidation company.

Like many, I grew up shopping at Zellers, so it was one of many icons from my childhood. I decided I wanted to own a genuine piece of Zellers memorabilia.

Liquidation has finished at this former Zellers store. The aisles are empty of all merchandise, though some fixtures remain. According to Zellers, all merchandise items sell in liquidation.

A lone shopping cart remains in the middle of this former Zellers store.

This picture is approximately the same location on the bottom floor of the same Zellers store, though at a slightly different angle. The signage, ceiling and floor tiles have been removed, but the red and white paint survives on the pillars for now.

Unlike many store liquidations, Zellers was never bankrupt, and thus had the ability to stretch its liquidation process to maximize profit. To save money, they ran social marketing campaigns through Facebook, which were very successful in terms of return on investment. As part of these promotions, the iconic Zeddy teddy bear mascot was put up for “adoption” in a contest. Camp Trillium, a childhood cancer support centre, was the winner, which is an appropriate gesture given Zeddy’s focus toward children as the Zellers toy department mascot.

Although 3 stores with a Zellers banner will be retained in a modified format, all other Zellers stores will be closed by March 2013. This brings a substantial end to a story that began 82 years ago. Businesses like this have come and gone over the years. Many Zellers locations replaced other once familiar retailers such as Towers/Bonimart, Woodward’s, and K-Mart Canada. Without a doubt, the stores replacing Zellers will themselves someday also change, and the cycle will continue.