Canadian Retail Thread [Archive] - Page 4

SSLL

Feb 25, 2006, 6:31 PM

Hudson's Bay, USA
As foreign ownership looms, PETER C. NEWMAN looks back in this exclusive essay on 336 years in which the so-called Company of Adventurers sparked the birth of a nation -- yet 'missed just about every business opportunity that came its way'

PETER C. NEWMAN
From Saturday's Globe and Mail
Like totems sacrificed to the French Revolution -- the trophies melted down for coinage, the statues of angels torn out of cathedrals and tossed into the Seine -- Canada's corporate selloff accelerates unabated. Once safe-and-sound corporate idols such as Air Canada, Canadian National, Future Shop, Molson's, Tim Hortons, Shoppers Drug Mart, EnCana, Club Monaco and many others are now owned or controlled by U.S. investors. So it should be no surprise that next week this country's founding commercial enterprise, the Hudson's Bay Company, becomes a plaything of South Carolina financier Jerry Zucker.

It shouldn't be a shock, but it is, because for those of us who have studied the HBC seriously, it is difficult to separate company and country. This epic acquisition (for just over $1-billion) by an American takeover artist shatters a unique 336-year link between Canada and its founding transcontinental business empire.

An essential formative influence in Canada's evolution from colony to nation, the company exercised a profound impact on our economy, geography and psyches. Its presence made us Canadian. Even now that the once-glorious Company of Adventurers has become just one more department-store sacrifice to the 100-ton gorilla known as Wal-Mart Inc., its absence will be felt.

If the metaphor holds -- if historically Canada was indeed the HBC writ large -- its demise as a core Canadian institution does not bode well for our future in a global economy. Sell too many of our big-box companies and we cease to be players in the only league that counts.

Even in this context, assigning such significance to a department store that has been in the black only once in the past seven quarters may seem melodramatic. But warnings are not always obvious. The Bay's demise as a touchstone Canadian institution sends an uncomfortable message: If we continue to cast adrift all of our historic anchors and become mere squatters on our own land, it will too late.

The question will then become not whether this century belongs to Canada (as the previous one never did), but a more urgent query: Will Canada belong to the 21st century? That's a profound dilemma and the answer should worry us all.

We tend to play down our history, mainly because we have no Walt Disney to paint it with the textures and excitement it deserves. But the birth of Canada was no immaculate conception. It took guts galore to navigate the rivers in cockleshell birch-bark canoes, to tame the rocky land and plant the pioneer communities. As citizens of a loose federation of regions on the periphery of civilization, Canadians felt like marginal people with few core values to call their own.

The "Company of Adventurers of England Tradeing into Hudsons Bay" was there nearly 200 years before Confederation, to set an example. Its survival skills became Canada's dominant virtue.

Country and company helped one another to inhabit and then prosper in North America's frozen attic. Survival meant hanging on against all odds. Implanting in the national conscience that will to endure became the HBC's most pervasive legacy.

At the same time, the deference to authority fostered by the HBC's dominant presence on Canada's frontier became our state religion, and still is. This prevailing ethic of Canadians being eager to kowtow to anyone in command of any patch of wilderness was very different from the militancy of the itchy loners who populated America's extravagantly prosperous Wild West. The Yanks challenged authority and never deferred to anyone. About 69 Indian wars were fought on American soil that cavalry charges turned into killing fields. "Sniping redskins to watch 'em spin" was the slogan among the sharpshooters, who came perilously close to committing genocide.

That was not the Canadian way. We had no massive cavalry, no vigilantes, no Davy Crockett. No one would dare to claim aboriginal people were treated fairly on this side of the 49th parallel, but neither was slaughter government policy.

Humane considerations aside, the fur trade depended on its native labour pool to hunt and trap the animals. The natives exchanged furs, which were to them largely useless (they hunted strictly for food), for the rifles, copper kettles and signature Hudson's Bay blankets that lightened life in the wilderness.

The unofficial HBC motto was, "Never shoot your customers." Had it maintained such an enlightened attitude as a department store, it may not have had to sell out so ignominiously to the only substantial bidder.

"The shape of the indigenous Canadian imagination," concludes Abraham Rotstein, the University of Toronto economist who is the leading expert on the fur trade and Canada's identity, "took root in the experiences of the fur trade, both for the French period and after the Conquest.

"Voyageurs, rapids, the outlying frontier, courageous exploration of rivers, long portages, relations with distant Indian tribes, these and other features of the fur trade are echoed today in the Canadian self-image. The fur trade, more than virtually any other single experience, was the primary matrix out of which modern Canada emerged."

Beaver became the breathing equivalent of gold. What made the animals so valuable was not their fur but its fine, thick under-hair, which was turned into the felt used to make the beaver hats that became a high fashion item in England and on the Continent for several generations. Before the invention of the umbrella, beaver headgear provided an elegant way to keep dry, but more to the point, its wearers could be instantly placed within the social structure according to their choice of hats. (Incidentally, the lead fumes inhaled during the felt-making drove its practitioners into early senility; thus the saying "mad as a hatter.")

Another part of the beaver that sparked dreams of fortune in men's eyes were the pear-shaped glands located in the anal region: They contained an orange-brown alkaloid, Aspirin-like substance that cured headaches.

The Hudson's Bay Company strung a thin line of trading posts across the upper half of North America, which was all that kept out American annexationists pushing north. The inhabitants of these puppy bush settlements displayed individuality at their peril. The prevailing ethic remained deference to authority inside their ramparts and deference to nature beyond them. This attitude still determines what most Canadians do -- and, especially, don't do.

Arriving directly from the hard-bitten tradition of the Orkneys, the Shetlands and the Scottish Highlands, the early traders set out a primitive form of capitalism in the cold-frame latitudes of Hudson Bay. They stressed life's sombre virtues -- the notion that there was nothing more satisfying than a hard day's work well done and that the good man always earned more than his keep.

In dramatic contrast to the six-shooter individualism of the American West, the idea was to be careful, plainly dressed and quiet-spoken, close with one's money and tight with one's emotions. Flashes of pleasure and moments of splendour had to look accidental, never planned. Such a gloomy credo was carved into every Canadian psyche. Whatever our ancestry, as Canadians most of us still act Scottish in our reticence and rectitude. Blame the Bay.

"I adored the HBC," Sir William (Tony) Keswick, one of its last British governors, told me. "I'd have done anything for the company, within reason -- or without reason. It was a wonderfully romantic concern, and its people would have cut off their hands to help.

"We British are fanatically romantic about our history. The magnificent Prince Rupert [who restored Charles II to the British throne, and received the HBC Charter in return] was the company's first governor; our great Duke of Marlborough the third. [Nine generations after the original Marlborough, the family begat Winston Churchill who, when he retired from politics, accepted only one commercial directorship: as seigneur of the HBC.]

"The second -- the Duke of York -- gave it up only to become King of England. I've seen the minute book in which the Duke apologizes for not being at the next board meeting because he has just taken on the throne. I mean, that's absolutely honey to a Briton. You'd pay a dollar more for your $20 share if you could get that thrown in -- even if it has no practical merit."

Tony Keswick's enduring passion for the company was by no means unique. Some of its bachelor officers willed it their savings; one woman executive I met told me that she loved the company more than either of her husbands. Even the grumblers, fed up with their long, slow lives in some dreary posting, would vow that they were damn well going to retire early -- after only 38 years in the service.

The one emotion the HBC never inspired was neutrality. Native customers, feeling short-changed by its traders, insisted its initials should really stand for the Hungry Belly Company; their women accused the firm of masquerading as the Horny Boys' Club.

No one touched by the company's Darwinian will to survive remained unaffected. To be a Bay man was tantamount to belonging to a religious order.

Currently reduced to holding "scratch-and-save" sales, the Bay still behaves as though it once touched the hand of God. Throughout its history, it found comfort in the rumour that the members of the British Royal Family were major shareholders. The whispers became fact during a Canadian tour, when Prince Philip sidled up to then HBC governor Don McGiverin, and demanded: "How are we doing?"

The company eventually extended its mandate across one-12th of the Earth's land surface, with outposts in San Francisco and Hawaii. Its most dynamic personage was Sir George Simpson, a bastard by birth and persuasion, who from 1821 to 1860 ran the HBC as his private domain. Darting across his empire in a fleet of express canoes, he cheered up local factors by announcing his arrival with the loud help of an accompanying bagpiper named Colin Fraser.

The most puzzled observers of these musical interludes were aboriginal people, who had never seen or heard such a weird instrument. According to what was most likely an apocryphal story, a puzzled Cree reportedly told his chief that "one white man was dressed like a woman, in a skirt of many colours. He had whiskers growing from his belt and fancy leggings. He carried a black swan which had many legs with ribbons tied to them. The swan's body he put under his arm upside down then put its head in his mouth and bit it. At the same time, he pinched its neck with his fingers and squeezed the body under his arm, until it made a terrible noise."

Rings true to me.

Simpson also pioneered the notion of having a mistress in every fort. Native women were often co-opted into casual sexual relationships, though many liaisons resulted in "country marriages" that lasted a lifetime. (One bit of stray evidence of just how solitary the HBC men felt were letters I found sent to the company's mail-order catalogue division. Enthralled by the layouts featuring women's underwear, one lonely soul wrote away to order "the lady on the right hand corner of page 59.")

In 1870, Simpson's vast empire was sold to the newly confederated Dominion of Canada for £300,000 plus title to seven million acres of prime prairie land holdings. The HBC then established its dominant influence over Canada's Arctic, organizing the trade in fox pelts, and eventually manning 200 northern posts.

In western Canada, the retail trade was channelled into a half-dozen downtown department stores that eventually became the nucleus of a national merchandising operation. Even with Wal-Mart cutting deeply into its Canadian sales, the company still owned 568 outlets, selling goods worth $5-billion a year.

There were other ventures along the way, including purchase of a Hollywood film studio and, during the First World War, ownership of a mighty fleet of 300 merchant ships vessels that ran the gauntlet with essential food supplies and ammunition to France and Tsarist Russia. A third of them were sunk by German torpedoes en route.

While researching all of this, I interviewed more than 1,000 Bay men and women, and took on some of their coloration. So anxious was I to do them justice that I began to feel like a Blues Brother on a mission from God. But it wasn't easy.

The tragic fact is that, despite the regal sponsorship that gave it a running start, the HBC missed just about every business opportunity that came its way. Whenever an intuitive leap was required to advance the company into fresh and lucrative jurisdictions, its decision-makers opted for safety and survival. Despite its historical significance, the company turned out to be the most stunningly unsuccessful monopoly in Canadian history.

Although it owned one of history's most valuable land holding -- one-third of the still-to-be-explored northern part of the continent -- it allowed others to profit from that magnificent hunk of real estate.

Here was a company that dominated the world's fur trade for three centuries, yet never made a fur coat. Here was a company that pioneered the nation's transportation arteries (much of the Trans-Canada Highway runs along its canoe routes) and exercised a transportation monopoly over western Canada, yet when it came time to build the CPR across its territory, the HBC demurred.

Here was a company that had the only functioning infrastructure on the Canadian plains and owned seven million acres of prime land along the new railway route, yet did little to capitalize on that invaluable asset. Here was a company that established a worldwide market for its "Best Procurable" scotch, high-quality gin and rye, but instead of continuing to distill its popular house brands turned the business over to Seagrams.

The most obvious dereliction of opportunity was the failure to capitalize on the company's potential oil and gas reserves. In the mid-1920s, it still held mineral rights on 4.5 million acres checkered across the Prairies. Rather than exploit that invaluable asset, described by Fortune magazine as "an oilman's dream," the HBC leased the entire package to Marland Oil of Ponca City, Okla. (and its successor, Continental), retaining only a 21-per-cent interest.

By the late 1960s, the joint venture ranked as Canada's third-largest oil and gas producer, with 1,606 wells in production; its earnings were twice as high as those of the HBC itself, and its equity was worth four times as much, with the company receiving less than a quarter of the royalties.

If this series of spectacular missed opportunities doesn't qualify the Company of Misadventurers as a typical Canadian story, I don't know what does. But there is a lesson here: Survival is a lousy ethic because it kills risk, and thus the future. It was this reticent creed that paralyzed the HBC's corporate planners: They took occasional flyers, but never bet the firm.

One peculiarity of the Bay's management structure is that it was run by the ultimate absentee landlords, located in London. It took an unbelievable 264 years for the first HBC governor -- Sir Patrick Ashley Cooper -- to bother crossing the Atlantic in 1934, for a first-hand look at Hudson Bay, which had enriched his 31 predecessors who never made the journey.

His visit was not a success. Comfortably lodged aboard his tour vessel, he insisted on broadcasting a greeting from the King of England, from the ship's enclosed bridge. Since each settlement had only one radio receiver, inside the manager's house, none of the gathered native trappers heard the broadcast -- which was just as well, since very few of them understood English. When Ottawa objected to a businessman representing himself as carrying an official royal message, the ship's captain pulled the plug on Cooper's amplifier, so his greeting was never heard by anyone.

In significant contrast, the HBC's last Canadian president and chief executive officer is George Heller, the only head of the company who can actually skin a beaver. He was making his living by doing just that when he joined the company in 1952 as a lowly clerk-in-training at $200 a month (minus $50 for room and board).

Of the decade I spent writing my history of the HBC, I recall most vividly my final visit to Moose Factory, near the bottom of James Bay.

First scouted in 1671 by the audacious Pierre Radisson, the place was populated by ghosts. I spent most of my time in the company cemetery, walking among the tombstones and crosses, twisted into crazy angles by the permafrost.

It was beginning to snow a little and, as I stood in front of a tilted markers, I sensed the spiritual presence of the fur traders who had lived and died there. I felt them silently staring at me, their faces like those haunting slashes of pigment with which van Gogh portrayed the Borinage miners: flat eyes, prominent cheekbones, looks that betrayed not a glimmer of duplicity but a profound sense of accusation. They were dead men from a dead culture, their deeds and misdeeds long ago consigned to the dustbins where Canadians store their history.

Yet I could sense their curiosity: Why had their lives prompted so little attention, why had their names been ignored even in that crowded corner of obscurity reserved for Canada's unsung heroes? They had, after all, done everything that was expected of them and more. But the phantoms quickly vanished, and I walked back through a gathering snowstorm to the local Hudson's Bay store.

That night, I joined a burr of Bay men, trading yarns. They were drinking to remember the good old days, then drinking some more to forget them. These were the men who would gladly have sold the Bay blankets off their beds to maintain the Company's reputation. They missed the fur trade because it had been less a business than a way of life, an escape from the restrictive codes of civilization. Now, it was finished, and so were they.

Somebody mentioned George Simpson McTavish, a factor for the company who had spent 40 years at its most isolated posts. To break his seclusion, he had domesticated a mouse and discussed in great earnestness each day's events with the friendly rodent. He always travelled with a loaded pistol, not for defence, but to shoot himself in case he stumbled into a leg-hold trap and couldn't get back to his post. That's lonely.

Nothing happened to McTavish, except that his mouse died, but I couldn't get him out of my mind, trekking across some screaming stretch of wilderness, wondering when he might have to put the gun in his mouth.

Canada's backcountry where the HBC held sway was originally populated by many such "ordinary" men and women. They spent their lives in those obscure corners that poet Al Purdy located as being "north of summer."

Thinking and writing about these "ordinary men" as I did that long-ago day at Moose Factory, my memory twigged to a line in Shakespeare's Henry V, following the battle of Agincourt, when the King requests a list of the English dead.

"Edward the Duke of York, the Earl of Suffolk, Sir Richard Ketly, and Davy Gain, Esquire . . . None else of name," reports the King's herald.

"None else of name" -- the most devastating of epitaphs -- yet it fit most of the hard cases who lived and died in the service of the company. As the subsidiary of a Yankee coupon clipper's portfolio, the HBC will now vanish into the mists of forgotten history.

And nobody waved goodbye.

SSLL

Feb 25, 2006, 6:32 PM

Zucker mum on HBC deal
Feb. 25, 2006. 01:00 AM
DANA FLAVELLE
BUSINESS REPORTER

American financier Jerry Zucker is waiting until Monday to disclose whether his offer to buy Canada's oldest company was a success.
But all indications yesterday were that Zucker's $1.5 billion bid for Hudson's Bay Co. Ltd. would get sufficient shareholder acceptance to go ahead.
The secretive South Carolina billionaire was playing his cards close to his vest.
"We have a pretty good sense of how things are going. But we won't get the final numbers until the early evening and then we have some legal things to do," his spokesperson Robert Johnston said yesterday.
Several large Hudson's Bay shareholders said yesterday they are selling into the offer. Others got out of the stock earlier in the year. Freestone Capital Management, the second largest shareholder after Zucker, said it sold in mid-January after it became clear HBC wasn't going to attract any better offers.
"I really thought this would be an excellent opportunity for Target to enter the market," Gary Smart, a portfolio manager with the Seattle-based fund, said yesterday. "I think Zucker is getting a good deal."
Towle and Co. confirmed yesterday it's selling into HBC's offer. The St. Louis-based fund held 536,657 HBC shares at last count.
Zucker began buying HBC shares more than 18 months ago and was soon its largest single shareholder with just under 19 per cent of the stock.

Kilgore Trout

Feb 25, 2006, 8:41 PM

there's a starbucks in guantanamo bay... why not a tim horton's in kandahar? :)

SSLL

Feb 25, 2006, 8:54 PM

From: http://www.theglobeandmail.com/servlet/story/LAC.20060225.RREGULY25/TPStory/Business
_________________________________________
POSTED ON 25/02/06
RETAIL
Sears' Lampert solid in game of valuation chicken
ERIC REGULY

Sears Holdings, the Eddie Lampert creation that owns 54 per cent of Sears Canada, got lucky when the man without a plan -- Jerry Zucker -- bought the slow-motion-suicide case known as the Hudson's Bay Company. If a Class A retailer like Target had snapped up HBC and revitalized it, Sears Canada probably would have lost half its value in less time than it takes to move a Kenmore fridge off the showroom floor.

It looks like SH is on the verge of getting lucky one more time. The minority shares of Sears Canada, which SH has offered to buy for $16.86 apiece, are still above the bid price. But they have lost value since Wednesday, after Genuity Capital Markets concluded their fair value ranges between $19 and $22.25 and the Sears Canada board told investors to reject the offer.

Nice try, Genuity, but the market says your effort to extract a few more bucks from SH isn't going to work.

The Sears Canada shareholders, most of whom are hedge funds at this stage in the takeover attempt, must be dreaming to expect a nice surprise. Mr. Lampert is no sweetheart. He's the guy who smashed Sears and Kmart together, squeezed costs, unloaded assets and created value from a flat-lining business. He's got his own money on the line. He might tack a few cents onto the Sears Canada offer as a sop to the Sears Canada independent committee, which commissioned Genuity's valuation. Anything more seems unlikely, though it's not out of the question.

Why would SH bid against itself? In theory, another retailer or a private equity firm could bid for all of Sears Canada. The trouble with the scenario is that SH owns the Sears name in Canada and the names of some of its top merchandise brands, Kenmore among them. If Sears Canada is struggling now, imagine the hell it would go through with a sales arsenal devoid of those brands.

The investors who recently sold Sears Canada shares -- they were as high as $18.67 early this month and closed yesterday at $17.65, down 12 cents -- probably have less than fond memories of another situation where minority shareholders had their hopes dashed. A few years ago, Rogers Communications offered to buy out the minority of Rogers Wireless. The independent committee of the Wireless board deemed the offer mean and suggested that Ted Rogers up the ante. Ted said forget it and walked away (in a separate reorganization in 2004, Wireless came under full Rogers control).

The counterargument is that Mr. Lampert knows value when he sees it. He thinks he can turn Sears Canada into a Wal-Mart and Home Depot beater and wouldn't go through the takeover effort if he saw only a buck or two of upside (or so the holdouts must think). He probably thinks Sears Canada is worth $20 a share, probably more. Therefore, investors can look forward to an offer within Genuity's valuation range.

Aside from the fact SH is the only realistic bidder, the scenario presents a few problems. The first is that Natcan, the investment management arm of National Bank and owner of 9 per cent of Sears Canada shares, supports SH's $16.86 offer. It has agreed to sell its stake to SH even if SH does not manage to buy out most or all of the minority shares. What do the hedgies know that Natcan doesn't know?

The second is that Sears Canada has been no growth story as the competition heats up. Merchandise sales have been on the wane in recent years. EBITDA -- earnings before interest, taxes, depreciation and amortization -- has declined 13 per cent over four years. The EBITDA margin has gone from 8.5 per cent in 2003 to 7.4 per cent last year. One of the few bright spots in its stores is appliances; their sales are up, but flogging kitchen machinery is a low-margin activity compared with, say, apparel sales.

Between 2002 and last summer, Sears Canada shares went nowhere. They rose in the subsequent months as SH auctioned off the Sears Canada credit card business and paid a $18.64 distribution in December. It's apparent the six Sears Canada directors who form the special committee don't feel strongly about their company's value-creation ability. They have bought a grand total of 1,000 shares in the past three years. Committee chairman William Anderson owns no common shares.

Genuity did nothing wrong. Based on a cost reduction effort that is just getting under way and valuations obtained in other retail industry deals, it concluded SH's offer was inadequate. Nonetheless, Dundee Securities has effectively told clients to sell. The Toronto investment firm said "the folks at Natcan are astute valuators and represent an ideal proxy for the minority shareholders."

It would be lovely if the minority shareholders squeezed more money out of SH. Talking up valuations is what investing is all about. But playing chicken with SH, which has said it's happy to live with less than 100-per-cent ownership of Sears Canada, seems a game with unattractive odds. Don't feel sorry for Genuity. It made $1-million on the valuation exercise. As for the minority shareholders? Who cares. Hedge funds live to gamble.

SSLL

Feb 26, 2006, 11:56 AM

What next for the Bay
Feb. 26, 2006. 01:00 AM
DANA FLAVELLE

When the doors open at Hudson's Bay Co.'s 500 stores across Canada tomorrow, employees of the iconic 336-year-old retailer will learn — officially — whether they have a new owner.
American financier and industrialist Jerry Zucker is expected to announce early in the morning how many shares were tendered to his $1.5 billion offer for the struggling department store retailer.
The deal was slated to expire Friday at 5 p.m., though it could still be extended or withdrawn, Zucker said in a press release Thursday.
Assuming, as most observers do, that at least two-thirds of HBC's shareholders will accept Zucker's offer of $15.25 a share, the big question now is what's next for Canada's oldest retailer?
Zucker, whose company Maple Leaf Heritage Investments Corp. has been HBC's biggest shareholder for the past 18 months, has already spelled out some of his plans. None of it sounds very drastic.
His plans include installing state-of-the-art inventory controls that keep popular merchandise in stock, boosting traffic and sales per square foot by inviting third parties to set up boutiques within the stores, adding more discount brand-name merchandise and closing money-losing stores.
Normally, a financial buyer like Zucker would do his best to unlock the target company's value by splitting up and selling off some of the assets, according to mergers and acquisitions expert Laurence Booth. At that point, he would go on to cut costs in order to boost profits, said Booth, a professor at the University of Toronto's Rotman School of Management.
But the highly secretive Zucker has so far said only that he might sell off the Simpson Tower, home to HBC's corporate headquarters, in downtown Toronto.
His stated goal is mainly to do a better job of running the stores, a move that suggests he might replace the current senior management team.
His spokesperson, Robert Johnston, has declined to discuss Zucker's plans for chief executive officer George Heller. But some observers say Heller and his two lieutenants, Thomas Haig and Marc Chouinard, could be among the first to go.
"They haven't performed and, when you don't perform in retail, you get fired. Whether it's your fault or not," said one retail consultant who didn't want to be named.
In the six years since Heller took the helm at HBC, both sales and profit have slipped while the company's share price has flat-lined amid growing competition from discounters and specialty retailers.
In its latest quarter, HBC reported a $50 million loss, including $28 million in one-time costs to pay for layoffs.
HBC has already spelled out the cost of getting rid of its top six officers at nearly $10 million in severance packages. Heller would get 2.5 times his current annual salary and bonus, which amounts to just under $4 million based on last year's salary of $1.2 million plus bonus of $350,000. If asked, he would remain on staff for at least a year after change of ownership, according to company documents.
Marc Chouinard, chief operating officer, would get $1.7 million. Thomas Haig, executive vice-president to the office of the CEO, would get $1.55 million. Michael Rousseau, the chief financial officer, would get $1.2 million.
Under Heller, there have been some successes. While Zellers has struggled to compete with discount goliath Wal-Mart Canada Corp. and the Bay's business is being eroded by cheaper chic retailers, HBC's home fashion chain Home Outfitters and its new Designer Depot discount fashion stores are a hit.
Still, some observers say either David Margolis, founder of Winners Merchants LLP, or Paul Walters, ousted CEO of Sears Canada Inc., could do a better job of turning things around.
"I think they need someone who understands the Canadian retail industry," said David Howell, a consultant with Associate Marketing International, of Toronto.
Some of the work that would normally be done by a new owner is already in progress at HBC. In recent months, the retailer announced it was cutting 825 middle management jobs and selling off its profitable credit card division.
But more could be done, observers said.
Some of the Bay's downtown stores across Canada sit on highly valuable real estate, while the Zellers chain could be downsized and sold to a company like Target Corp., the only successful U.S. competitor to Wal-Mart.
One of the first indications of Zucker's plans might be what he does with the $370 million in proceeds from the sale of HBC's credit card division to GE Money, the consumer-lending arm of General Electric Co.
Will he invest it in the retail business to speed up store renovations to make HBC more competitive? Or will he pocket the profits, as his counterpart Ed Lampert has done at Sears Holdings Corp. Lampert is the other financier who has recently invested in the retail industry, staking a claim in Sears Roebuck, then combining it with ailing Kmart.
Either way, Zucker has his work cut out for him. It will take more than a few asset sales and some management changes to make HBC successful, experts said.
The job cuts so far are expected to save the company $40 million to $45 million a year. But the company lost $50 million in its latest quarter, after taking a $28 million charge for severances to pay for the layoffs.
Zucker has said he'll invest $325 million over the next three years improving the stores. But HBC already spends roughly that much each year on capital improvements.
In the meantime, observers will have a tougher time finding out what's going on at HBC since the company will no longer be publicly traded after the sale goes through.
The impact on some publicly traded real estate companies may be more apparent as Zucker decides what to do with the many Bay and Zellers stores that occupy the malls and plazas they operate.
Among HBC's biggest landlords are Cadillac Fairview Corp., home to many of the Bay's mall locations, and RioCan REIT, a prime landlord to Zellers.
Pension plans have been big buyers of retail real estate, Booth noted.
In the longer term, Zucker may have to take more aggressive action to restore profits at the stores. That could include store closings and asset sales to other retailers, analysts say.
For years, analysts have speculated HBC could be broken up and sold, with U.S.-based Target scooping up the Zellers chain, while Macy's and Bloomingdales' parent company, Federation Department Stores, would pluck off the Bay.
Both have begun supplying HBC with certain exclusive and private label brands, including I.N.C. and Tres You. They may yet play a further part in the HBC saga.
Against this backdrop of corporate uncertainty, HBC spokesperson Hillary Stauth said the retailer has been keeping the focus in its stores on the Olympics. The company became an official sponsor this year and won the right to outfit the Canadian team for the next four Olympics.
The Olympic outfits, particularly the "trapper" hat, have been a huge hit among spectators at the winter games in Turin, Italy.
The games are one of Heller's passions, though he hasn't been in Turin for the current Olympics, Stauth said.
Meanwhile, Zucker has remained a mystery throughout his pursuit of Hudson's Bay. The 55-year-old Israeli-born engineer has spent most of his career pursuing industrial companies.
His previous interests in Canada have been eclectic. He once owned Montreal-based Dominion Textile Inc. and still owns a chain of laser tag entertainment centres across Canada.
His spokesperson, Johnston, is a Montrealer. And his daughter Andrea is reportedly marrying a Toronto native now based in Washington, D.C.
Still, Zucker's interest in retailing has puzzled industry analysts and many doubted from the start that his intentions were serious. Zucker has kept his options open up to the very last minute, issuing a press release Thursday that said he could still extend or withdraw his offer.
As the company's largest shareholder, with just under 19 per cent of its stock, it seems unlikely Zucker will walk away at this point. He can't sell his stake without depressing HBC's share price and the prospect he might buy more was one of the few things propping up the stock in recent months.
Tomorrow, HBC's 70,000 employees will find out just how deeply Zucker is committed to the company.

big W

Feb 27, 2006, 5:57 AM

Great news. Strange it took so long for Banana Republic to come to Québec after being in Ontario to BC for so long...

Yes and Its been here in Edmonton for years as well.

trueviking

Feb 27, 2006, 6:07 AM

"The downtown Bay stores, meanwhile, need to become a fashion destination at mid-to-higher prices, Mr. Loeb adds."

sound familliar?

"In the 1990s, Sears tried to reinvent Eaton's as a smaller, upscale, fashion-oriented department store. The effort failed spectacularly."

floralieca

Feb 27, 2006, 6:22 PM

The Bay as a new owner... Zucker did it with now 82% of the sharehold...

Zucker a pris possession de La Baie

Michel Munger
27 février 2006 - 11h46
Le milliardaire états-unien Jerry Zucker possède maintenant 82% de la Compagnie de la Baie d'Hudson (HBC) avec presque 57 millions d'actions.

Texte: Envoyer Imprimer © Reproduire

De plus, il détient maintenant presque 125 M$ en débentures, soit environ 62% du total.

Depuis que son entreprise Maple Leaf Heritage a offert 15,25 $ l'action et 1020 $ la débenture, M. Zucker a mis la main sur 43,8 millions d'actions, soit 63% des actions émises et en circulation d'HBC.

«C'est un jour historique pour HBC, commente Jerry Zucker. Heritage est satisfaite d'être associée avec une entreprise qui a une si longue et si fière histoire. En tant qu'actionnaire principal d'HBC pour plus de deux ans, Heritage sait quelles sont les occasions qui s'offrent.»

Afin d'acquérir 90% des actions et débentures de La Baie, Maple Leaf Heritage prolonge son offre jusqu'au 9 mars, en espérant pouvoir radier les actions de l'entreprise de la Bourse de Toronto.

Le titre de HBC gagnait 4 cents à 15,25 $ lundi matin à Toronto.

Arriviste

Feb 27, 2006, 7:09 PM

Yes and Its been here in Edmonton for years as well.

I can't remember a time when their wasn't a Banana Republic in the TD Center here in Calgary. It's been over a decade for sure.

malek

Feb 27, 2006, 7:19 PM

SSLL

Feb 27, 2006, 8:59 PM

SSLL

Feb 27, 2006, 9:05 PM

From: http://www.theglobeandmail.com/servlet/story/RTGAM.20060225.wxrcoverloblaw25/EmailBNStory/Business/home?pageRequested=all&print=true
_____________________________________
POSTED AT 6:00 PM EST ON 25/02/06
Loblaw's chain reaction
MARINA STRAUSS
With files from reporter Andy Hoffman
Loblaws knew it had to get into the 21st century in a hurry.

It had Wal-Mart on one flank, and price-conscious consumers on the other. And as it looked for ways to beat one, and serve the other, it realized that one of its big impediments was right at the core of its business: It was taking too long to get goods from the warehouses to the store shelves.

And so last year Canada's biggest grocer embarked on a $62-million effort (with more to come) to revolutionize its distribution system. It launched an ambitious -- and ultimately costly -- plan to trim its 32 warehouses by six. It wanted to consolidate operations in large, high-volume facilities run on state-of-the-art technology. Ordering systems were to be streamlined so that shelves would be full of the goods the company marketed so famously in its Insider Report flyers.

But things went awry. Loblaw moved too fast. It laid off people, relocated others, and closed facilities before other locations were able to take up the additional load. Last summer, the Calgary warehouse got so jammed that one supplier waited three or four months just for his shipment to be received.

How did one of Canada's savviest supermarket chains find itself in this predicament? Why couldn't a leader in developing designer groceries also produce President's Choice pots and pillows and get it right?

For president John Lederer, a man who is usually in total control of a situation, it wasn't his finest hour. He tried to do too much, too quickly, and is now eating humble pie. His missteps set the grocer back at least a year, and tens of millions of dollars.

"We've had a very challenging year," he told analysts recently. "It has to be said that probably we -- I -- went a little bit too fast. And, obviously, you learn from that. And we are far better prepared now to cope with the final stages of setting this business absolutely right, than we were certainly a year ago."

While he says the company is well on its way to getting its house in order by the summer, others think it may take longer. And time is of the essence because as Loblaw Cos. Ltd. works to sharpen its operations, discounter Wal-Mart Canada Corp. isn't wasting a second. The giant general merchandiser within a year plans to roll out supercentres with a full array of supermarket and non-supermarket goods.

So the grocer that mastered Memories of Szechuan peanut sauce has to figure out how to sell towels, toys and clothing, and do it quickly. Otherwise it may get overtaken in the competitive heat.

"Their task is to make people aware of their general merchandise offerings, and the scope of them, because they don't have a long record at it," says Don Watt, a retailing consultant who advises Wal-Mart.

To compete successfully against the mighty Wal-Mart machine, a merchant has to have a well-oiled system of getting in-demand products from the supplier to the store shelves. To his credit, Mr. Lederer understands that, and last year set about retooling Loblaw's systems to slash costs and gear up for his expansion into general merchandise at discount superstores.

Not one to shrink from challenges, he's a Loblaw man to the core, having served the company for 29 years. At 50, he's been at the helm since 2001, from success to success.

But in trying to take on the 800-pound gorilla Wal-Mart, the low-profile executive met his match. As he raced to streamline Loblaw's distribution and administrative network to lower costs -- all so that he could lower prices -- the process snowballed into a series of stumbles that he didn't anticipate.

His goal was to consolidate 32 warehouses across Canada by closing six and cutting 1,400 jobs. But the remaining distribution centres just weren't ready for the onslaught of inventory. Indeed, the company was "a little bit careless" in executing the makeover, Mr. Lederer said this month.

At the same time as the warehouses were being shut or overhauled, the company was preparing to move 2,000 administrative employees to its new headquarters in Brampton, Ont., from a number of offices in Canada. That's where things started to get really bogged down. Some people decided to quit rather than move, specifically a good half of the 150 general merchandise product buyers in Calgary. Merchandise purchasers play an important role at a retailer, and were badly needed at Loblaw. But just when it needed them most, many of Loblaw's key people were instead thinking either about looking for new jobs or spending time house-hunting in Ontario.

The staff turnover, and general turmoil, hit many suppliers hard.

"What's been really frustrating is the rapid change in people," one supplier says. "The guy that was buying last week isn't buying this week and may not be buying next week. It's been very difficult." (Suppliers asked not to be identified out of fear of Loblaw's clout.)

Adds another supplier, who had several thousand dollars' worth of general merchandise turned away repeatedly from a backlogged Loblaw warehouse last fall: "When buyers leave, you don't have any continuity. Mistakes are made."

There were just too many irons in the fire all at once -- too many changes occurring concurrently, admits Loblaw spokesman Geoffrey Wilson. (Mr. Lederer declined to be interviewed.) The team in Western Canada, where the grocer had an established general merchandise business at older superstores, was accustomed to doing business in the same way, and wasn't able to focus properly on the transformation.

"They were not as prepared as they should have been to accept this change -- partly because of all of the things happening and partly because we could have managed it better," Mr. Wilson says.

The company has begun to slow its pace of change. But it hasn't been easy on suppliers, who have borne their share of bruises along with Loblaw. As one large food supplier puts it: "When Loblaw burps, everybody feels a bit of the pain along the way."

One vendor, who also asked to stay anonymous, shipped tens of thousands of dollars' worth of general merchandise to the Calgary warehouse last June, only to have the shipment refused. The boxes sat for three or four months in containers before making it into the warehouse, when he was finally paid, he says. "I don't think I was the only one."

Backlogs last summer were compounded by the Vancouver port strike, Mr. Wilson says, although he insists that delays were generally a matter of "days, not months."

Because of the delivery foul-ups, particularly with general merchandise, Loblaw put off heavily marketing the goods and spreading the word that it had added an array of non-grocery items.

"They're not promoting things that they're having trouble getting to the stores because all they do is end up disappointing their shopper," says an executive at a major packaged goods firm. "They should be growing that side of their business but they are not."

The snafus resulted in indirect costs too. The stores scheduled night crews to unpack boxes that never arrived, or arrived in inadequate quantities; suppliers shipped goods straight to stores rather than to warehouses, racking up extra labour and transportation costs; Loblaw was forced to mark down prices of many seasonal goods (such as toys for Christmas) that came late to stores.

"If you don't get the seasonal product in at the right time and you don't have enough selling time, you have to move too early in a markdown situation," Mr. Lederer has said. "So the reality of general merchandise is it is perishable as well."

The problems haven't been limited to the loading docks. Displays at stores often have looked scattered because of empty shelves. Some of the earlier, smaller superstores don't have a complete range of general merchandise, thus confusing consumers, says Mr. Watt, who helped design Wal-Mart's U.S. supercentres, which combine groceries and general merchandise.

Loblaw superstores are so big that they can be difficult to navigate, he says. And there are often fewer customers in the non-grocery sections because many people just aren't aware of all the new items that the outlets now carry, he says. Mr. Watt, chairman of DW + Partners in Toronto, was instrumental in developing its first superstores in Western Canada about 25 years ago, as well as its iconic President's Choice private label.

The challenge is to differentiate itself from Wal-Mart by emulating U.S. discounter Target Corp. and focus on adding flare to home goods and fashions at a low price, he adds.

In this vein, the grocer's troubles may go beyond logistics, some analysts say. The chain runs the risk that its new discount superstores may increasingly cannibalize sales at its conventional supermarkets, says Keith Howlett, retailing analyst at Desjardins Securities. And its push to reduce prices may bode badly for the bottom line for a little while yet.

"We continue to grapple with whether transitory supply chain issues are able to fully account for Loblaw's weak sales and earnings performance in 2005 and as projected for 2006," Mr. Howlett says in a recent report.

No matter how you slice it, the numbers aren't pretty. Last year, the grocer saw its same-store sales, a key retailing barometer that excludes the impact of annual store openings and closings, barely grow at all while they slipped 0.7 per cent in the fourth quarter.

Store productivity, measured in sales per square feet, dropped 2.4 per cent last year to $590.25, Mr. Howlett estimates.

While Mr. Lederer foresees a turnaround by the second half of this year, others aren't as sure.

"We are not fully convinced that all the necessary components of the company's transformation will have fallen into place by then," Mr. Howlett writes. Not only do internal cost reductions need to take hold, but both Loblaw employees and customers need to embrace the changes. "A great company is transforming itself dramatically in Canada's largest markets of Ontario and Quebec," he says. "Timing is hard to predict."

Certainly, Mr. Lederer is moving to tackle the problems. But he is facing big hurdles, not the least being the Wal-Mart juggernaut. And then there are the tough labour talks in Ontario, where lowering payroll expenses is a critical goal. After all, in Wal-Mart, he is taking on a powerful non-unionized rival whose low cost base is at least partly a result of notoriously low compensation for its employees.

Loblaw is in the midst of negotiations with the union representing employees at its Ontario traditional supermarkets, some of which the retailer wants to convert to discount superstores. That province is the focus of the superstore expansion as well as the branching into a wider range of higher-margin goods, from towels to toys to tumblers. A few years ago, when the company was launching those Ontario outlets, it was successful in getting the union members to agree to lower pay scales for general merchandise staff.

Now Mr. Lederer is expected to seek further wage cuts from the United Food and Commercial Workers union. The UFCW, for its part, is only in the early stages of the talks. But union leaders "are all concerned about Wal-Mart growing those Wal-Mart superstores," national director Michael Fraser says.

On the procurement front, Loblaw has hired new product buyers, while on the supply chain side, the glitches are being ironed out at warehouses. The food end of the business is up to scratch, company executives say, while general merchandise will be mended by the summer.

To ensure long-term stability, Mr. Lederer has plucked a supply chain veteran from Wal-Mart itself to head up those crucial operations at Loblaw. To bolster product offerings, Loblaw is scrambling to "Target-ize" its private label offerings, tapping into style meister Joseph Mimran of hip fashion chain Club Monaco fame to put his stamp on the new lines.

Last fall, Loblaw launched a line of PC home products. In March, the superstores will begin carrying a new line of clothing, developed by Mr. Mimran exclusively for Loblaw and called Joe Fresh styles.

And to make superstores more shopper friendly, Loblaw recently rejigged the layout of some Ontario stores and installed colour-coded signs to make it easier for shoppers to find their way around and to flag low prices.

Once the company feels it has a handle on its logistic headaches, it will try to get some attention with a cranked-up marketing campaign. It is looking at relying less on flyers and considering advertising on television, radio, billboards and on-line, company executives have said.

As Mr. Watt says: "They need to find ways to tell people about their stores . . . There is a sense of urgency here."

1,400

Number of Loblaw warehouse job cuts. The company is closing six warehouses in Ontario and Quebec in a bid to streamline operations. Loblaw began 2005 with 32 facilities across the country and ended the year with 28.

-18%

Decline in Loblaw stock price over the past year. The warehouse and supply chain woes have cut a hole in Loblaw's bottom line. The problems cost $10-millin in the fourth quarter alone. Out-of-stock signs have left investors out of luck.

30,000

Number of President's Choice toasters sold so far. President John Lederer said customers have purchases 20,000 PC coffee makers. A thousand PC-branded general merchandise items were launched in 2004. But the cookware and sleepsets have had trouble getting to stores because of warehouse snags and supply chain problems.

77

Number of Real Canadian Superstores in 2004. These are the stores where Loblaw is stocking most of its general merchandise items. There are roughly 20 in Ontario. General merchandise staff at superstores has lower pay scales than their food counterparts.

2,000

Number of administrative positions relocated to the new head office in Brampton, Ont. About half of the general merchandise buyers based in Calgary didn't make the move. Other were distracted by house-hunting and family pressures caused by the mid-school-year disruption.

"It has to be said that probably we - I - went a little bit too fast. And, obviously, you learn from that."

John Lederer, Loblaw president

MikeTTG

Feb 27, 2006, 9:28 PM

MikeTTG

Feb 27, 2006, 9:30 PM

I can't remember a time when their wasn't a Banana Republic in the TD Center here in Calgary. It's been over a decade for sure.

Banana Republic opened in the Eaton Centre in Toronto in February 1995. I know it's dorky to remember that, but I was called to the bar a few weeks later and I bought a lot of work clothes there.

malek

Feb 27, 2006, 9:37 PM

^^^^Yes, the Bay is meant to be a middle between Sears and Holt's, but this time, unlike eatons, there's no pesky competitor like the Bay.

^Interesting. is there a link for the article? I guess with the greater differences in language and culture, it'd be quite different. I can think of a lot of companies like that in fact, that have delayed to either study the market or found local partners to "deal" with the market (Best Buy, Starbucks, American Eagle, etc.).

Its a printed magazine which is still availble, you can browse thru without buying it ;)

In the magazine they suggested that companies should find local partners and give them delimited areas to do buisness, they would be better tooled to get the franchises up and running.

MTL-514

Feb 27, 2006, 10:51 PM

To SSLL:

I was reading a good article in the latest Canadian Franchise Buisness magazine, it was about setting up franchises in the La Belle Province.

Most Canadian and Americans franchisers have a "mind block" about Québec because they have no idea how things will go in regards to the French language.

Basically, not only they have to adapt their paper work, they also have to revisit their marketing strategies completely. The same ad in Alberta won't work the same in Québec.

The article summed up that while it might take more money to start up he franchising process, its not that hard to do and franchisee will be rewarded by the most loyal customers in NA (studies conducted show that the Québecois are very loyal to a brand/franchise when they're well served more so than anywhere else).

another interesting element, is that retailers or other buisinesses courting the public here in Quebec sometimes need to have a differentiated marketing strategy not only for potential francophone clientele here but also for the quebec anglophone market. sometimes this just means having english-language versions of the same ads they use in french, but in some cases it means using the ROC marketing for the english media here, and making local adaptations if any are necessary

I can remember a number of french-language ad campaigns by big international chains which were merely translated into very weak english-language ad campaigns for english TV here (Dunkin Donuts comes to mind, from back in the days when they used to actually want to be noticed :) ) man were those ads awful! a striking example of how, sometimes humour simply does NOT translate...

while the rest of the world had the "Time to make the donuts" guy, english tv in Quebec had some skinny mustachioed glasses-wearing nerdy guy with some really cheesy badly-translated slogan

all to say, quebec can be a bit more complex and costly place to market a new buisness in. certainly explains some of the delays

MTL-514

Feb 27, 2006, 11:01 PM

edit - double post

SSLL

Feb 28, 2006, 11:08 PM

Bay play part of global game
Feb. 28, 2006. 06:56 AM
DAVID OLIVE
BUSINESS COLUMNIST

From outward appearances, a proud G-8 economy is being hollowed out. Many of its best-paying jobs are being outsourced to low-wage nations, turning one-industry communities into ghost towns. Iconic local enterprises are being snapped up by foreigners, and entire sectors of the economy are falling under the control of interlopers from abroad.
We're talking about the United States — something to keep in mind with South Carolina billionaire Jerry Zucker's successful deal to take over Hudson's Bay Co. But HBC's agreement to the takeover last month has prompted dismay in some quarters over the loss of an enterprise rightly identified with the creation of Canada itself.
"The Bay's demise as a touchstone Canadian institution sends an uncomfortable message," says HBC historian Peter C. Newman, mindful of the foreign takeovers in recent years of Molson Cos., Dofasco Inc., Future Shop and many Western Canadian energy firms.
"If we continue to cast adrift all of our historic anchors and become mere squatters on our own land, it will be too late."
When the HBC deal was first announced in January, retail consultant Wendy Evans told the Toronto Star that a blend of consumer cultures across the continent was a good thing, but "I don't think we want to have a total Americanization of Canadian retail."
Yet a glance to the south reveals a "de-Americanization" of stateside industry as pronounced as events in the Great White North, if not more so. The Bush administration recently approved the takeover by state-owned Dubai Ports World of several major U.S. ports, including terminals in New York, Philadelphia and Baltimore, dismissing concerns on Capitol Hill about the implications for national security. The company has asked U.S. federal authorities to review the deal again for potential security risks.
The White House is hamstrung in its efforts to censure the rabid Bush-hater Hugo Chavez, president of Venezuela, because Chavez could play havoc with U.S. fuel supplies, given the dominance on the U.S. Eastern Seaboard of Venezuela's state-owned Citgo Petroleum Corp.
British utility giant National Grid is seeking to expand its U.S. assets as one of the two bidders for KeySpan Corp., the fifth-largest U.S. natural gas distributor. British grocery giant Tesco PLC this week unveiled plans for a chain of U.S. mini-marts, joining Japan (7-Eleven), Canada (Circle K convenience stores and Eckerd drugstores), Sweden (Ikea) and Holland (Giant and Stop `n' Shop grocery stores) among foreign firms crowding the U.S. retail scene.
Canadians control the Illinois Central and Wisconsin Central railways; the Number 2 U.S. auto-parts maker, Magna International Inc.; John Hancock Financial, the biggest insurer in New England, which competes for business in the American market with the U.S. operations of Canada's Sun Life Financial and Great-West Lifeco Inc.; the U.S. Number 2 discount broker, Ameritrade; and one of Chicago's three biggest local lenders, Harris Bank (another of the three, LaSalle Bank Corp., is Dutch-owned). Puerto Rico's banking industry is effectively a branch plant of the Bank of Nova Scotia.
There are no American players in the burgeoning U.S. market for regional commuter jets, a sector dominated by Bombardier Inc. and Brazil's Embraer SA, soon to be joined by Russian aerospace giant United Aircraft Corp.; and Bombardier's lineup of corporate jets has displaced Savannah, Ga.-based Gulfstream Aerospace Corp. as the most popular private jet of choice for Fortune 500 CEOs, who long ago traded in their Cadillacs and Lincolns in favour of a Mercedes, Lexus or BMW.
The BlackBerry instant email device, a product of Waterloo-based Research In Motion Ltd., is so indispensable among U.S. decision-makers in Congress, on Wall Street and in Hollywood that the U.S. government has repeatedly intervened in the current patent dispute that threatens to shut down an addictive service with 3.2 million U.S. users.
American consumers enrich foreign companies with every purchase of Wild Turkey bourbon, Vaseline, Harlequin books, Allegra antihistamine, Dixie Chicks CDs, PlayStation game consoles, Kit Kat bars, Perrier sparkling water, Sunlight detergent, Hellmann's mayonnaise, Ben & Jerry's Chunky Monkey, Gerber baby food, Nicoderm tobacco-cessation patches and Ciba contact lenses.
As recently as two decades ago, America's biggest companies had mostly themselves to compete with. Today, non-American firms control more than half the U.S. market for autos, steel, beverage alcohol, nickel, newsprint, rubber, gold production and civilian aircraft.
Three of the Big Four global oil giants are European, as are three of the Big Five pharmaceutical houses. America has only two domestic auto makers; while Germany and France, with a combined population less than half that of the U.S., boast five major ones.
At least three Chinese auto brands — Geely, Chery Automotive and Lifan Group — are preparing U.S. rollouts of fuel-efficient, modestly priced ($10,000 U.S.) passenger cars. IBM personal computers are now made by a Chinese firm, Lenovo Group Ltd. And production of Play-Doh and the Etch-a-Sketch, 46-year-old flagship of the Ohio Art Co., has for the most part shifted to China.
Yet America remains the dominant global economy, whose stature won't come under serious challenge — principally from China and India — until mid-century at the earliest. Indeed, the stupendous buying power of U.S. consumers is the lifeblood of the world's leading non-American firms, which would shrivel or perish if denied access to the U.S. market. As for Canada, its economy has never been stronger, in job creation, wealth generation and fiscal surplus. And despite the new absentee ownership of several famous firms, Canada punches above its weight in the multinational game.
Global business is, to some extent, a game — one of musical chairs. Shoppers Drug Mart, to pick an example, has passed from Canadian to British to American and back to Canadian hands since the late 1970s.
And at this moment, an Indian steel maker headquartered in London, incorporated in Holland and boasting extensive U.S. operations including the former Bethlehem and LTV steel firms, is seeking control through a hostile takeover of a French rival that itself just bought Canada's Dofasco, which the Indian firm proposes to spin off to Germany's ThyssenKrupp AG if its acquisition gambit succeeds.
Unlike the asset shuffling and "asset stripping" that reached its zenith in the late-1980s, today's industrial consolidation — in theory, and usually in practice — enhances productivity and innovation, and, in the long term, job and wealth creation.
Japanese auto makers now employ almost as many workers in Cambridge and Alliston, Ont., and in U.S. communities as they do in Toyota City and Hamamatsu. European drug makers are increasingly concentrating their R&D activities in New Jersey, still the world capital of the pharmaceutical sector; Houston remains the leading centre of global oil and gas exploration and production technology; and Toronto keeps its role as a leader in global mine financing.
In a proper order of events, HBC would have been acquired by Target Corp. of Minneapolis, a well-managed retailer that has withstood the threat from Wal-Mart Stores Inc., and not by a financier, Jerry Zucker, with no background in merchandising. That the 335-year-old HBC has fallen into the hands of an investor whose resumé includes the bankruptcy-protection filing of a textile conglomerate he assembled in the 1980s says less about Canada's vulnerability to a plague of absentee owners than to the chronically risk-averse, unimaginative corporate culture of HBC for most of the 20th century.
"Despite its historical significance," says HBC historian Newman, the firm "turned out to be the most stunningly unsuccessful monopoly in Canadian history," failing to parlay its founding fur-trading empire into a business that could indefinitely outlive the obsolescence of beaver coats.
Here and there, one finds Bay customers who mourn HBC's change of ownership. But realistically, a radical change at HBC is long overdue.

SSLL

Feb 28, 2006, 11:09 PM

Zucker takes hold of 82% of Hudson's Bay, retail changes expected swiftly
GILLIAN LIVINGSTON
Mon Feb 27, 5:22 PM ET

TORONTO (CP) - U.S. businessman Jerry Zucker has gained control of retailing icon Hudson's Bay Co., and within months consumers will experience a "revitalized" department store giant.

But analysts expect bigger changes in the years to come, from a slimming down of Bay and Zellers stores, to a potential merger of those two recognizable Hudson's Bay (TSX:HBC - news) brands.

"This is a historic day for HBC," stated Zucker, CEO of Maple Leaf Heritage Investments Acquisition Corp. after a majority of the retailer's shareholders tendered to his $15.25-a-share offer and allowed him to gain control with 82 per cent of Hudson's Bay.

"As HBC's largest shareholder for more than two years, Heritage is aware of the tremendous opportunities available to HBC and looks forward to working with management and associates to build upon HBC's strong position and dynamic growth opportunities."

Initial changes will revolve around simple fixes, such as improving merchandise by adding more exclusive brands and higher-end products, and better customer service.

On the corporate side, it means a new board of directors and chief executive officer, and potentially a slew of changes in the management ranks.

"We think there's a lot of room for improvement at the company," said Robert Johnston, vice-president of strategy with Maple Leaf.

"Clearly, we're very excited about this opportunity, we think that this is a great company with great brands and great locations."

Although some Canadians will lament the fact a U.S. owner has bought up the oldest Canuck retailing icon, "we think that the change of ownership may in fact give it a shot in the arm and relaunch and revitalize it," Johnston said.

But Maple Leaf will also continue with a strategy to trim the number of small Zellers stores.

"Some of the smaller Zellers will probably be closed over the next number of years and the bigger boxes will be opened, which is a global trend in retailing," Johnston said.

Maple Leaf will own 56.9 million shares once it takes up the 43.8 million HBC shares tendered to its bid, which closed Friday, as well as $124.6 million worth of subordinated debentures.

Those who haven't tendered their shares now have until March 9 to do so.

At the retailer, there will be technical improvements to the stores, a focus on ensuring advertised merchandise doesn't run out, and the retraining of staff for better service, Johnston said.

For years, consumers have complained that service at the company's Bay and Zellers stores is notoriously poor.

"We know that Canadians in some instances have not been fully satisfied with these chains," Johnston said.

But, "it's a sad day for Canada," said Joseph D'Cruz, a professor at the Rotman School of Business in Toronto, since the buyout of Hudson's Bay by a U.S. firm illustrates that Canadians have failed in retailing. It also highlights that Zucker, a businessman from South Carolina, has a huge challenge before him.

"It's a very tough environment to pull off what Zucker is trying to pull off," he said. "What he needs is aggressive U.S.-style retail management."

The success in Canada of U.S. retail giant Wal-Mart has come at the expense of Zellers, and the Bay and Sears have both struggled as customers turned to specialty retailers and avoided the traditional department store, which partly led to the demise of Eaton's.

D'Cruz expects amid the competition Zucker might decide to merge the two store brands, Zellers and the Bay, to reduce overlap and give it the strongest chance to battle Wal-Mart head-to-head.

Or, Zucker could make the Bay more upscale so it competes more with retailers such as Holt Renfrew.

Any such change would mean the Bay would slim down store numbers so it's only in the top shopping mall markets, said Ken Jones, dean of the faculty of business at Ryerson University.

There needs to be significant longer-term changes at the retailer because it has struggled for years, Jones said.

"Maybe they'll have to downsize their stores," he said.

Looking years ahead, with Hudson's Bay soon to be a private company and Sears Canada moving in that direction, it gives those two department store chains the opportunity to look at how they could work together to be more profitable, said John Chamberlain, a retail analyst with Dominion Bond Rating Service.

"That's something that I think has a better than even likelihood of happening at some point," he said.

But a merger of the Bay and Zellers banners isn't likely, Chamberlain said.

In the meantime, however, Zucker will have revamp the stores with a bit of "paint and polish," better merchandise, displays and service, and advertise to lure shoppers back to the stores to give them another chance, Chamberlain said.

"It doesn't take a big increase in sales to drive a substantially greater increase in profit," he said.

"People are still going in the stores, you just have to have the right merchandise."

Shares of HBC closed Monday at $15.22, up one cent on the Toronto stock market.

malek

Mar 1, 2006, 8:24 PM

we knew this already, but this just came out:

H&M Expands Into Montreal Market

- Four Stores to Open in Spring 2006 -

TORONTO, March 1 /CNW/ - H&M, (H & M Hennes & Mauritz AB), the Swedish-
based, international clothing retailer, will open its first four stores in
Montreal and the Greater Montreal Area in spring 2006. The locations include
Fairview Pointe Claire (6801 Trans-Canada Highway), Rockland (2305 Rockland
Road), Carrefour Laval (3003 Le Carrefour Boulevard), and Galeries d'Anjou
(7999 Les Galeries d'Anjou Boulevard).
"We're thrilled to be expanding into the Montreal market," says Lucy van
der Wal, country manager, H&M Canada. "Montreal is an extremely fashion
forward city with many consumers seeking stylish and affordable fashion. H&M
offers a simple solution - fashion and quality at the best price."
H&M stores carry a wide range of fashion - from updated classics and
basics to clothes that reflect the very latest international trends. The new
stores will carry the following collections: Fairview Pointe Claire - women,
teenagers, children and baby; Rockland - women, men and teenagers; Carrefour
Laval - women, men and teenagers; and Galeries d'Anjou - women (including
lingerie), teenagers, children and baby.
H&M currently has eleven stores in Toronto and the Greater Toronto Area
(GTA). They include: Bloor Street, Erin Mills Town Centre, Fairview Mall,
Markville Shopping Centre, Oakville Shopping Centre, The Promenade,
Scarborough Shopping Centre, Square One, Eaton Centre, Vaughan Mills Shopping
Centre and Yorkdale Shopping Centre.

H & M Hennes & Mauritz AB (H&M) was established in Sweden in 1947. The
company's business concept is to offer fashion and quality at the best price.
H&M is quoted on the O-list of the Stockholm Stock Exchange and has
approximately 1,200 stores in 22 countries. H&M has more than 50,000 employees
and achieved sales including VAT in 2005 of SEK 71,886 million. H&M has a wide
product range that is divided into a number of different concepts for women,
men, teenagers, children and cosmetics. The company's clothing collections are
created by its own designers, pattern makers and buyers. For further
information visit www.hm.com.

MTL-514

Mar 1, 2006, 8:29 PM

oops - 5 minutes late - malek beat me to it...

malek

Mar 1, 2006, 8:33 PM

;)

SSLL

Mar 1, 2006, 10:30 PM

There goes the 'hood

Rising rents and rumours of H&M's move to Queen West leave locals mourning their once-hip strip

DEIRDRE KELLY

It's a familiar scene these days on Queen Street West: Long-time customers of the strip's funky indie businesses stop by to shop and discover a "Going out of business" sign in the window.

This week, it was Joan Frick's turn for a rude awakening. The artist and Queen West resident was found picking through the remains of Circa Forty, a vintage clothing store that after 14 years is closing in the wake of rising rent and rumours that Swedish fashion retailer H&M is expanding into the area. The move swells the ranks of foreign big-box stores such as Zara and HMV, which even now are altering the distinctive character of the Queen West streetscape.

After hearing the news, Ms. Frick began looking not just for a bargain but for a shared memory, a memento, of the halcyon days when Queen West was alternative and not mainstream, authentic and not a runway knock-off.

"The cool is no longer here," she griped. "It used to be a centre for artists and creativity and now it's becoming a shopping mall. And I don't like shopping malls."

Proprietor Philip Abtan, flanked by a canary yellow cocktail sweater festooned with sequins, agreed. "Queen Street is unique," he said. "I would call this one of the most unique streets in North America."

But the scene is changing fast. His shop had long been a fixture on the burgeoning strip, selling retro chic to poor but thread-proud locals as well as to the rich and mega-rich, including out-of-town visitors like Bruce Springsteen and Sharon Stone.

But with the arrival of commercial heavyweights to the area, Mr. Abtan has seen his rent steadily rise, from $2,300 a month two years ago to $3,000 last year. Now it's about to take a far bigger leap.

"My landlord said 30 days or $5,600. I took the 30 days."

He is setting up a new business, a furniture store, in the Vaughan Mills shopping mall north of the city. "If you can't beat 'em, join 'em," he said.

Ms. Frick looked up wide-eyed from the faded cognac leather jacket she was fingering. "My estimation of you has just dropped considerably."

But Mr. Abtan said he is not a sellout. He's a realist. Last Sunday, he was able to verify talk of H&M's imminent arrival to the strip when, ironically, one of the company's employees came to pick out a little something for herself from his funky store -- at grossly discounted moving-sale prices.

She told him the firm had taken over the building that used to house Tortilla Flats, along with a handful of small businesses, and it planned to build a new three-storey store on the site.

Tortilla Flats manager Duane Feeley said the restaurant was forced out of its space just east of Spadina last April when landlords Living Property Management wanted to raise its rent from $37.50 a square foot to between $75 and $100 a square foot.

"Rent is becoming too high for the strip," he said. "It is becoming the new Yorkville.

"I think if H&M comes to Queen Street, it will become an outdoor mall."

Speaking by phone from Geneva, H&M spokesman Christian Bagnoud wouldn't confirm the company's plans, but enthusiastically endorsed Queen West as being where the company wanted to amplify a Toronto presence that already includes tony Bloor Street West and malls like the Eaton Centre, Yorkdale and Sherway Gardens.

"We don't go to areas that we don't think are the best. Queen West is a good location," he said.

Still, in Mr. Abtan's view, the appeal may be short-lived. "What people are saying, " he said, "is that the street is changing into that corporate Yorkdale type of atmosphere -- that it is losing its uniqueness."

He was perched on a stool that afforded him an unobstructed view of his fluid subject. Outside, the "crazies" commingled with the corporate kingpins, all of them clutching Styrofoam cups of coffee. Mr. Abtan pointed out the diversity and worried that with more gentrification, the area will lose its character.

Hip seems already to be losing the battle to the forces of homogeneity. Mr. Abtan said the rumour mill is again churning, this time with news that Urban Outfitters is moving in on the south side of Queen West, at Augusta.

If true, it means that the commercialization of Queen is migrating farther westward, well past Spadina and into territory that, until last year's opening of an American Apparel store, has remained safely beyond reach of the multinationals.

Several blocks west of Bathurst at the Kama Kazi clothing boutique, owners Debra and Fred Antwi said they believe they're in the new sweet spot.

"People are looking for the old Queen West vibe," Mr. Antwi said. "They come in here and say, 'Oh, here it is, we thought it was gone.' "

Still, cities and their streets lead organic lives, subject to change. And so Queen Street will evolve as well its grasp on cool, Edward Majkut said as he walked out of Circa Forty with a bag of clothing Mr. Abtan had sold him for less than $12. He knew Queen Street before it was Queen Street and now he is seeing it at the tail end.

"Centres of cool have a short lifespan," Mr. Majkut said. "They are in places where no one wants, initially, to go, and then they are where everyone wants to go and so they cease being cool.

"That, my friend, is life."

samne

Mar 2, 2006, 5:14 PM

This is not news. That stretch of Queen St, east of Spadina, lost its independant character long ago. The good news is, it keeps pushing new independant businesses further west and reclaiming forgotten areas like Parkdale.

miketoronto

Mar 2, 2006, 5:28 PM

Queen east of Spadina still has some cool owner run stores yet.

But if all these chains keep coming in, then Queen east of Spadina is not going to last to long, and the chains will probably close, and new own run stores will open up.

Really, if this keeps up, Queen east of Spadina will just be The Eaton Centre without a roof. And who is going to make a trek down there if you can get the stuff at Eaton Centre two blocks east.

I wish the chains would just stay in the Eaton Centre. Because now with the movement of chains to the street, they are pushing the unique stores farther out along Queen and other areas. And well it makes it harder now to go shop. Before you could go downtown, and everything was within that nice little square mile. You had your chains at the Eaton Centre, the funky on Queen, and the other stores in the other unique areas.

But now, if you want funky, you gotta ride the streetcar out for like 15-20min to west queen west, etc.
Toronto is not staying compact.

Yonge Street however managers to keep tons of unique stores, which is a good sign.

samne

Mar 2, 2006, 5:32 PM

Really, if this keeps up, Queen east of Spadina will just be The Eaton Centre without a roof. And who is going to make a trek down there if you can get the stuff at Eaton Centre two blocks east.

Because its a hell of alot more fun to shop outside and stop at a patio along the way.

Yonge Street however managers to keep tons of unique stores, which is a good sign.

If thats what you call peep shows, fetish and dollar stores.

Rusty van Reddick

Mar 2, 2006, 10:02 PM

West Queen West is the coolest street in Canada. Makes Commercial Drive look like a joke.

204

Mar 3, 2006, 9:27 PM

Vancouver's retail space is the most expensive in Canada:

Retail rates among world's top 5

At $135 US per square foot, Vancouver retail space is the fifth-most expensive in the world -- and Robson's even worse

Derrick Penner - Vancouver Sun - Monday, February 06, 2006

Move over Melbourne, step aside Midtown Manhattan, Vancouver has you beat when it comes to the prices chi-chi retailers have to pay to play in top retail sales locations, according to the commercial realtor NAI Global.

Vancouver, while it can't top the highest rents on New York's 57th Street, still ranked fifth in the world for expensive retail real estate with a $135 US-per-square-foot lease rate for top locations, including its renowned Robson Street.

Hong Kong ranks No. 1 in NAI Global's top 10 list with a $696 US-per-square-foot lease rate, Tokyo was second, charging an average rent of $209 US per square foot and Beijing was third with a lease rate of $183.

New York's Midtown Manhattan was the only United States location to crack NAI Global's top 10, and it ranked ninth with an average lease rate of $86.

Greg McPhie, director of NAI Goddard & Smith, NAI Global's Vancouver-based affiliate, compiled the data for Vancouver. He said it was an average of "high-street" fashion rates for Robson Street, where the highest rents are approaching $200 Cdn per square foot.

"I guess it speaks to our attractiveness as a city and all the dynamics that make our downtown exciting and attractive," McPhie said. "Vancouver, as a city, has done very well at developing, and is well known for that."

So high-profile fashion chains can justify paying high rents on Robson Street for the profile that it gives them, and McPhie guessed that some of the justification comes from the advertising value of just being there.

Robson is home to stores such as A/X Armani Exchange, Original Levi's, Club Monaco, Banana Republic, the Gap and Bebe. Cosmetics company Kiehl's has a location there, as does Pegabo Shoes and local fashion icon Aritzia.

"Some of those retailers have to be there," McPhie said. "They seem to want to be there for the tourists and the profile it gives them. They rationalize those rates, and rationalization goes on, because they're paying much lower [rents] in other parts of the city."

Boy's Co. is another local, three-store chain with a location on Robson. Boy's Co. president David Goldman said the company opened the Robson location in 1987, and said staying there is worth it despite ever-rising rents.

"The exposure alone is worth I don't know how many times its value in advertising simply because you get the numbers of people walking past your door," Goldman said.

Goldman added that all the major retailers who want to be in Vancouver want to be on Robson. He said these days "there's more wants-to-be" than there is space available in choice locations.

Shaadi Faris, a senior analyst for Colliers International, said it sounds a bit surprising to see Vancouver ranked so high on NAI Global's list, until he stops to think about recent developments.

Colliers' 2005 retail survey shows that Robson's top rents of $200 per square foot still do not approach the top rents on New York's 57th Street, where stores paid $950 US per square foot, or even Geary Street in San Francisco, where the highest lease rates topped $450 US.

However, Faris said Vancouver is becoming internationally recognized as a shopping destination, and "the big-name guys" are willing to pay high rents, even if they lose money, "just to be on Robson."

Kari Baker, a retail consultant with Sixth Line Solutions in Vancouver, said very few stores, especially the big brands, would lose money on Robson. She said those stores tend to have their sales formula "down to a science."

Robson, she added, has a reputation for carrying the same amount of pedestrian traffic as some prime New York spots.

Edward Finn, NAI Global's senior vice-president, said Vancouver's improving economy, the strengthening of the Canadian dollar and the impending 2010 Olympics all increase Vancouver's desirability as a retail destination, and "has pushed Vancouver to one of the leading retail cities in terms of the price of exclusive retail space."

depenner@png.canwest.com

THERE'S GOLD IN VANCOUVER'S STORES:

The city has become enough of a retail destination to earn a fifth-place ranking on commercial realtor NAI Global's top-10 list of the world's most expensive places to rent a retail store.

[B]1. Hong Kong -- $696

2. Tokyo -- $209

3. Beijing -- $183

4. Seoul -- $161

5. Vancouver -- $135

6. Shanghai -- $134

7. Taipei -- $131

8. Jakarta -- $114

9. New York City, Midtown -- $86

10. Melbourne -- $81
Source: NAI Global, commercial realtors

miketoronto

Mar 4, 2006, 5:16 AM

High rents are not always great. It just means the unique places in the downtown are forced out and downtown becomes nothing but an outdoor mall and forces everything out to the fringe.

samne, you should give Yonge another look. There are tons of great stores on that strip, if you take the time to actually look. Actually there are alot of stores on that strip that make it a real downtown main street yet. It might not be all polished, but that is what makes Yonge a true main street yet, and not a disneyfied playground.

SSLL

Mar 4, 2006, 1:39 PM

Saturday » March 4 » 2006

Canadian Tire on a roll
Focus on 'Concept 20/20': Adding new stores, bolstering financial services division

Hollie Shaw
Financial Post

Thursday, March 02, 2006

Canadian Tire Corp. is pursuing an ambitious expansion strategy, adding 19 new stores to its network and retrofitting or closing hundreds of others over the next five years, chief executive Wayne Sales said yesterday.

"We are embarking upon the most aggressive growth agenda in Canadian Tire's history," Mr. Sales told a CIBC World Markets retail conference. The strategy will winnow the company's old-store network down to 54 from 117 by 2009 and increase the number of its newest "Concept 20/20" stores to 299 from 53 today during the same time frame.

The 20/20 format refers to outlets that have 20% more selling space and aim to reap 20% higher sales than a traditional store. They were designed to have a greater appeal to women, with wider aisles and a greater complement of home products.

Looking at categories that have been growing over a multi-year housing boom, Mr. Sales noted 49% of the company's customer base is female, "but we were not getting a share of the purses that we wanted."

The 20/20 stores, which were introduced in late 2003, offer more housewares, ready-to-assemble furniture, gardening and home decor products than either the chain's traditional or larger, new-format stores. Male customers are not forgotten, he added quickly, "you can buy ATVs, powerboats, outboard motors."

Bob Gibson, retail analyst at Octagon Capital Corp., said consumer shopping trends have led to a proliferation of big-box retail developments, with Canadian Tire joining Staples, Wal-Mart, Old Navy, and competitors Home Depot and Rona.

"Now you might have a Canadian Tire in the same power centre as a Rona and a Home Depot and it's a huge destination and they actually do phenomenally well in a place like that. The other guys have more of a [big ticket] shopping thing going. Canadian Tire is more about convenience items, and maybe you'll pick up one or two other little things while you are there."

The company will replace, retrofit or expand 80 stores this year, Mr. Sales said, and will add another 1.5 million square feet, or eight stores, in 2006. Revenue at the retailer's 462 stores rose 8.4% to $9.09-billion last year.

Mr. Sales also outlined plans to increase business in its financial services division, which obtained a banking licence in 2003.

The average monthly card balance on the retailer's branded MasterCard is $1,614, compared with the industry average on all other credit cards of $2,460. Increasing the balance proportionally on Canadian Tire's card could add another $1.5-billion in credit card receivables annually, Mr. Sales said.

The retailer is also planning to introduce new financial services products.

These include variable-rate cards and gold cards, and the company is testing a 'gas advantage' points card in Ontario that can be used for discounts. Other bank products such as mortgages and GICs are also in the works, he said.

Another key strategy focuses on shifting more of its product sourcing offshore for access to less expensive goods. The retailer aims to see 48% of its sales from offshore sourcing in 2009, compared with 34% in 2005, and plans to add new and exclusive products.

- - -

CANADIAN TIRE CORP.

Ticker: CTR.NV/TSX

Close: $64.40, down $2.10

Volume: 396,794

Avg. 6-month vol.: 235,895

Rank in FP500: 36

HOISTING UP AN OLD BUSINESS:

THE COMPANY

The long-time Canadian retailer, with sales of $9.09-billion last year, up 8.4%, is undergoing an expansion strategy that puts an emphasis on larger stores.

THE TARGET

Long considered a chain that catered to men, Canadian Tire's new stores aim to boost sales to women by offering more housewares and home decor than traditional stores.

THE SPACE

Plans are in place to add 1.5 million square feet of retail space in 2006, or eight stores. They currently have 462 stores and will increase that to 481 by 2009.

THE FORMAT

The new 'Concept 20/20' format offers 20% more selling space with a goal of 20% higher sales. The plan is to increase the number of these stores from 53 to 299 in five years.

204

Mar 6, 2006, 7:45 PM

SteelTown

Mar 8, 2006, 1:55 AM

New retailers are buying into Hamilton

By Lisa Grace Marr
The Hamilton Spectator
(Mar 7, 2006)

Hamilton is fast becoming a mecca for those who need doses of affordable retail therapy.

Two new retailers are throwing open their doors at different ends of the city. Talize, a department store that's a cross between Value Village and Winners, is opening Thursday to 20,000-square-feet of shopping space where White Rose used to be on the Mountain.

Yves Rocher, which offers beauty products and aesthetic services, starts enticing women to Jackson Square tomorrow.

They're just the latest in a string of similar announcements.

Last month, Quebec-based Hart department store announced it is moving into a 40,000-square-foot space in the Hamilton City Centre this fall. Hip H&M is also moving to Hamilton this fall. The store's location is not yet finalized.

Neil Everson, the city's economic development director, said the stores will help stop "retail leakage."

"Now there will be even more reasons to keep people's dollars in the city," he said. "There won't be as much reason to go to Oakville or Toronto."

Paula Lord, Yves Rocher's Ontario regional sales manager, said that's part of the reason why the firm chose Hamilton. She said their market is primarily women who work and live in an urban centre.

"There are half a million people who live in the city," she said. "We do our research. We like what's happening and what's going on (in the core). There are also customers who are familiar with our name through our mail order or Internet business.

"In some malls, we're considered an anchor tenant."

Yves Rocher is based in France and sells all its own products in 33 countries. It has 58 stores in Ontario and Quebec. Hamilton represents one of its initiatives to expand into southern Ontario.

The Jackson Square store will be about 800 square feet and employ five workers.

Kathy Drewitt, executive director of the Downtown Hamilton Business Improvement Area, said it's exciting.

"It's an example of interest from someone who sees Hamilton with fresh eyes," she said.

Lord said the move downtown was partially motivated by the series of residential developments taking place in the core. Marvin Ryder, a business professor at McMaster University, said Talize will also likely do well on the Mountain for the same reason.

"There are a number of young families moving in who will be interested in the kind of value ... (Talize) is offering."

Talize is a new chain of stores, starting with its first franchise last September in London, Ont. There are two other stores in Kitchener and Delta, B.C. Talize president Nancy Bryce said she was drawn to Hamilton "because I feel like I know the people there.

"They're just ordinary, average people like me."

Talize's clothes are 80 per cent nearly new and 20 per cent new. Its used goods come from the Children's Wish Foundation, a charity which collects clothes.

Products are tested and sorted and shipped out from a Toronto warehouse.

"I want to take away the stigma from thrift stores," she said. "I want to make it clean and bright and smelling good."

The store's shiny shelving sports everything from kids' books for 49 cents to shelves of Lysol wipes for $1.99 -- $1.49 with a coupon.

But Bryce is picky about what ends up on the floor and it shows. Clothes are colour coded and smack of a hip fashion sense, toys are neatly sorted, furniture is in auction-ready condition and there are walls of hair clips.

Talize manager Bob Nazar said the hardest part right now is getting all the products on the shelves -- 6,000 items arrive daily -- and keeping customers out until the store opens Thursday.

SSLL

Mar 8, 2006, 9:32 PM

^my money's on H&M landing at Limeridge. Isn't that the best mall in Hammy?

SteelTown

Mar 8, 2006, 10:36 PM

I know someone who works at Limeridge Mall and rumours is that H&M is going there. But she also said the owner of City Centre (part of Jackson Square) is trying to deal with H&M but I doubt City Centre will get H&M when Limeridge Mall has Tommy Hilfiger, American Eagle, GAP, Old Navy, Campus Crew, Roots, etc. H&M fits perfectly at Limeridge.

SSLL

Mar 13, 2006, 10:39 PM

From:
_________________________________
Loblaw launches new fashion line
Last Updated Mon, 13 Mar 2006 13:32:35 EST
CBC News

Loblaw Companies Ltd. launched a new line of designer fashions Monday as it beefed up its range of offerings to meet competition from uber-retailer Wal-Mart.
Named Joe Fresh Style in keeping with Loblaw's core business, selling fresh fruit and vegetables, they are designed by Joe Mimran, the Canadian behind the chic Club Monaco and Caban labels, as well as upscale Holt Renfrew fashions.

The new collection will include more than 350 apparel items for men and women. The maximum price is $40 with an average price of just $13.

Just as important for jaded men fashion shoppers, Loblaw promised "an enjoyable, fun shopping experience." Fitting rooms will be big enough for a stroller and shopping cart, with one-stop check-outs.

"We are thrilled to offer our customers a wide selection of casual apparel items that fit today's lifestyle," said Louise Drouin, senior vice-president in charge of the Hard & Soft Line department. "We understand our customers lead busy and budget-conscious lives, and are committed to providing them with the convenience of a one-stop shop for all their daily needs."

The clothes went on sale Monday morning at 40 Superstores.

The company says the new clothing line will be simple and elegant, with an Asian influence brought by Alfred Sung, who has been associated with Mimran since their days together at Club Monaco.

Shoppers will be able to mix and match modern, chic apparel, priced at the lower end of the fashion spectrum.

"Our goal with Joe Fresh Style was to create a line of clothing that is accessible and affordable to Canadians," Mimran announced. "The level of style, quality and fit is extremely high and complemented by outstanding value."

Loblaw stock (TSX:L)fell 30 cents to finish at $57.09.

Loblaw is just one part of George Weston Ltd., a giant Canadian food and retailing empire that bakes Wonderbread and produces Neilson chocolates. It operates supermarkets across Canada under a wide variety of brand names, led by Loblaws, sells the President's Choice line of foods and operates Holt Renfrew fashion stores.

The chairman is Galen Weston, husband of Ontario's former lieutenant-governor Hilary Weston.

Loblaw has been diversifying away from its roots in recent years as it bulks up, adds new lines and bigger stores in a bid to meet competition from Wal-Mart, the giant U.S. chain that already sells a complete line of home supplies, hardware, clothing, pharmaceuticals and food, all at bargain-basement prices.

In England, Wal-Mart has taken the grocery business by storm through its purchase of the Asda chain, a major supermarket network that offers much the same food as Weston stores at discount prices.

Loblaw is clearly worried that the same thing will happen in Canada. It is trying to meet Wal-Mart head on by adding pharmacy products, kitchenware and even gasoline pumps in big, new superstores and lower-cost bulk food stores.

SteelTown

Mar 14, 2006, 9:16 PM

Le Chateau puts itself 'on sale'
Montreal firm has 150 locations across Canada

Clothing retailer Le Chateau put itself up for sale today, saying it is evaluating "various strategic alternatives," including a sale, merger or capital reorganization.

The Montreal-based chain said it has hired Genuity Capital Markets as financial adviser to help evaluate its options.

The company said the process will take several months and there can be no assurance that any transaction or other move will occur.

"This step is a natural and logical part of our evolution and growth and we believe that this is the right time to review such opportunities in the best interest of Le Chateau and all of its shareholders," chairman-CEO Herschel Segal said in a release.

Le Chateau sells contemporary fashion apparel, accessories and footwear for women and men. Its brand merchandise is sold through 180 retail locations in Canada and five in the New York City area.

SteelTown

Mar 17, 2006, 8:36 PM

H&M clothier likely going to Lime Ridge
Meantime, it's building excitement and keeping rivals in the dark

By Deirdre Healey
The Hamilton Spectator
(Mar 17, 2006)

Shannon Laity has applied to work as a cashier at the much anticipated H&M store, but has no idea where or when she might start working.

None of the local applicants who attended the trendy clothing chain's job fair yesterday were given the top secret details.

"They said a store would be opening somewhere in the Hamilton area, but not until the fall," said the 24-year-old. "That's all they said."

H&M, which has been advertising an autumn arrival, held a job fair at the downtown Ramada Inn yesterday and today.

When approached by a reporter, staff running the job fair directed all questions to head office. Staff at head office refused to confirm the location or expected opening date.

By not answering these key questions, H&M is only fuelling the curiosity, which could be the whole point, said Marvin Ryder, a marketing professor with McMaster's business school.

"It's the exact response they want," Ryder said.

"The more they build the excitement and suspense, the more they keep you intrigued. You only get one chance at a grand opening and they want to do it with the maximum amount of buzz."

Despite the secrecy, Ryder said he is 99 per cent certain the store will be in Lime Ridge Mall.

"It's a regional mall and the spot where there is the most traffic," he said.

H&M, which stands for Hennes & Mauritz, is a very particular company when it comes to making location announcements, said Neil Murphy, who is in corporate relations with Cadillac Fairview, property owner of Lime Ridge.

Murphy said Cadillac Fairview is negotiating with H&M on numerous properties across Canada, but would not confirm whether the company was looking to set up shop at Lime Ridge.

The Hamilton mall is the only retail property Cadillac Fairview owns in the city. "We are very careful with them because they like to do their announcements with a big pop," said Murphy, who has worked in retail for 18 years.

"They have the best people working for them and are very good at marketing. We leave the announcement strategy in their court."

And when a retailer tells Murphy to keep quiet, he listens.

He did say H&M typically "teases the public," leading up to the grand opening.

Another reason for the Swedish company's reluctance to publicly release details on the Hamilton store could be competitive strategy, said Mandeep Malik, a business professor at McMaster. Malik said the retail market has become extremely competitive and companies like H&M must ensure opponents like GAP, American Eagle Outfitters and Old Navy don't find out about future locations before they are final.

"If a company hears where you plan to locate, they will put up entry barriers," Malik said.

In a mall, a competitor company could expand to take over the available space being eyed by their rival retailer to prevent them from setting up shop, Malik said.

Known for offering cutting edge styles at affordable prices, H&M will be a "threat" to current stores targeted at fashion focused teenagers and young adults, he added.

So far, the clothing company has opened more than 1,000 stores in 22 countries.

There are 11 stores in Canada, most in the Greater Toronto Area.

Local H&M enthusiasts must make the trip to Oakville to get their shopping fix.

"I travel to Oakville and Toronto to shop at H&M, so it will be great once we get a store here," said Laity.

"I will be super excited if I get hired and they give out employee discounts. I am getting this job for myself and for all my friends."

SSLL

Mar 21, 2006, 9:54 PM

Sears could be worth more, but would Lampert pay it?
Investors think he'd boost value: analyst

MARINA STRAUSS
RETAILING REPORTER
Hedge fund giant Edward Lampert is his own worst enemy in trying to persuade shareholders to back his $835-million offer to take Sears Canada Inc. private, industry observers say.

That's because the controlling shareholder of U.S. parent Sears Holdings Corp. is seen as a savvy businessman who can improve the Canadian division, and increase its value, retailing analyst George Hartman at Dundee Securities Corp. said. Shareholders figure the company will be worth more than the offer -- and want to stick with him rather than bail out. Already the parent is performing better in his hands.

"They think Mr. Lampert is an investment genius," Mr. Hartman said of the man who has made a lot of money for others and engineered the takeover of both Kmart and Sears.

Mr. Hartman and others predict that Mr. Lampert will dig in his heels and refrain from boosting his $16.86-a-share offer despite opposition from some key -- and powerful -- shareholders.

Yesterday, Sears Holdings extended the offer until March 31. It had only managed to increase its 54-per-cent stake in Sears Canada by 9.5 percentage points, giving it just over 63 per cent of the Canadian division's shares.

Mr. Lampert is playing hardball. Sears Holdings said it will appoint a majority of insiders to the Sears Canada board of directors; currently, the majority are independent directors, but all six said they will not run for re-election at the annual meeting this spring, an apparent protest over how they felt they had been browbeaten by the parent.

Moreover, Mr. Lampert said that Sears Holdings will push to end the Canadian unit's 6-per-cent quarterly dividend if it fails to acquire a majority of the minority Sears Canada shares. That would mean dropping about $25.8-million in annual dividends, including roughly $16.3-million for the parent.

The company argued that Sears Canada "will face an increasingly competitive Canadian retail environment without the financial and operating benefits of being owned 100-per-cent by Sears Holdings" if the offer is unsuccessful."

The parent has criticized the Canadian operations for their weak performance in recent years, although it enjoyed a much improved fourth quarter in 2005.

Sears Holdings believes its offer represents "a full and fair price," vice-chairman Alan Lacy said in a statement, adding the company does not intend to extend the offer again if a majority of the minority investors fail to back the deal.

But some analysts continue to counsel investors not to tender to the offer. And Sears Canada's share price suggested they would not: On the Toronto Stock Exchange, the shares remained well above the offer, rising 5 cents to close at $18.05.

Ron Mayers, head of alternative strategies at Desjardins Securities, said shareholders voted "a resounding no" to the bid and will probably balk at anything less than between $19 and $20 a share.

Sears Holdings' takeover attempt has revealed a rift between the Sears parent and its Canadian unit. In February, Sears Canada's board of directors recommended against the parent's offer, saying it was too low. The rejection was based on an opinion from adviser Genuity Capital Markets, which valued Sears Canada at between $19 a share and $22.25 a share. A few weeks later, the independent directors signalled they would step down.

Last week, Sears Holdings said that most of the senior executives at Sears Canada were tendering to the offer, or selling their shares. Nevertheless, two large shareholders, Vornado Realty Trust and Pershing Square Capital Management LP, have resisted the offer.

theUSUALsuspect

Mar 24, 2006, 4:36 PM

For those that care - New Apple stores opening in Canada soon:

Carrefour Laval, Laval, Québec

Sherway Gardens, Etobicoke, Ontario

Eaton Centre, Toronto, Ontario

I understand they are also negotiating for a location in Vancouver.

SSLL

Mar 24, 2006, 10:45 PM

^Chinook too, no?

I hope they open a flagship with street presence (in Toronto).

theUSUALsuspect

Mar 25, 2006, 3:16 AM

^
there is a rumor about a Calgary store. They could announce one or two more in addition to Vancouver...

SteelTown

Mar 28, 2006, 12:11 AM

Guess we saw this coming.....Least no Wal-Mart

Zucker may unload stores
MARINA STRAUSS

From Monday's Globe and Mail

Jerry Zucker has approached some of Canada's largest retailers in an attempt to unload about 80 underperforming Hudson's Bay Co. stores, but he isn't talking to key rival Wal-Mart Canada Corp., industry sources say.

They say Mr. Zucker is circulating a “secret” list of sites to major retailers including grocers Sobeys Inc. and Metro Inc., which owns A&P and Dominion; Canadian Tire Corp. Ltd.; Winners Corp.; and Staples Inc.

“It's the worst-kept secret I've ever heard,” said one source who is familiar with the situation.

Nevertheless, Mr. Zucker is staying clear of Wal-Mart, which has played its part in HBC's decline over the past decade, sources said. It was unclear whether Loblaw Cos. Ltd. has been courted, although one source suggested it's possible.

Loblaw is becoming a bigger competitor to HBC. The grocer is building massive discount superstores with a wide assortment of food and general merchandise.

Mr. Zucker's real estate list pinpoints about 80 Bay and Zellers stores that the new U.S. owner of parent HBC wants to put on the market, sources said. HBC leases the sites.

The process may be fraught with difficulties because some of the sites are in malls whose leases have restrictions on what uses the space can be put to.

For example, Sobeys or Metro may be interested in a Zellers store, but there may be a competing grocery retailer in the mall whose lease doesn't permit another food merchant to move in. Landlords may then demand big payments to make significant changes in the makeup of the mall, sources said.

“If it's a real change in use, they're going to want the retailer to buy their way into it,” one source said.

Nevertheless, industry officials were not surprised that Mr. Zucker is shopping around the sites. He needs to unload them to help turn around HBC's flagging results.

“They're doing exactly what they should be doing,” another source said of Mr. Zucker and his officials. They could not be reached for comment, nor could an HBC official.

In the late nineties, when HBC acquired Kmart Canada and tried to divest many of its stores, HBC also went directly to retailers — rather than landlords — to discuss options, sources said. Many landlords were more than happy to find a new tenant for weakly performing Kmart locations, sources said.

But Mr. Zucker, who named himself HBC's chief executive officer and governor earlier this month, may have a tough time getting rid of many sites, they said.

“Many of them are in poor locations and small markets,” a source said. On the other hand, “any retailer would be interested” in looking at the sites.

Canadian Tire appears to be a strong candidate for the stores because its uses don't tend to conflict as much with those of rival retailers. For instance, it doesn't carry grocery or pharmacy products, which are sold in supermarkets, drugstores and dollar stores.

It may be more difficult for Home Depot Canada to move into Bay or Zellers sites because the home improvement chain needs large locations with tall ceilings, sturdy floors and big areas for contractors to move in and out of with lumber and other bulky materials. Home improvement rival Rona Inc. may be more flexible because it has a wider range of different-sized stores.

Mr. Zucker, who acquired HBC last month for $1.1-billion, has moved swiftly to try to put his stamp on the ailing retailer.

He has cut eight top executives from the payrolls, and taken George Heller's place as CEO, although Mr. Heller remains on the board.

He has told employees that he wants to differentiate the Bay and discounter Zellers while improving private labels and customer service.

And he has told some suppliers that he encourages them to take on more risk. He would like the vendors to guarantee to take back unsold goods, and make up the difference in lost profits if products do not sell at full price and need to be marked down to clear out.

SSLL

Mar 28, 2006, 9:20 PM

From: http://www.canada.com/national/nationalpost/news/cnspolitics/story.html?id=d0a0f3eb-6bb1-41d8-ba45-2fd58cee96b4
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Tuesday » March 28 » 2006

HBC may unload 80 stores
American owner seeks retailers to take over leases

Theresa Tedesco and Garry Marr; with files from Sean Silcoff in Montreal
National Post

Saturday, March 25, 2006

CREDIT: Peter Redman, National Post
Industry sources say HBC owner Jerry Zucker will likely have to pay a heavy price to close stores in communities where landlords will have difficulty finding new tenants.
The new U.S. owner of Hudson's Bay Co. is trying to unload as many as 80 stores across Canada, in a move industry sources speculate could result in one of the giant retailer's major brand outlets leaving one region of the country altogether.

Sources say that HBC, which was acquired by South Carolina billionaire Jerry Zucker for $1.7-billion this month, has prepared a list of store leases it would like to exit and is now asking other retailers whether they would consider taking over the space.

HBC, the oldest retailer in Canada, has more than 550 stores operating under the banners of the Bay, Zellers, Home Outfitters and Fields. However, sales in its stores have been flat or declining for the past five years as a result of stiff competition from Wal-Mart stores, Costco Wholesale Canada Ltd. and specialty clothing chains. It is believed a majority of the 80 money-losing stores being shopped around by HBC's management as part of a restructuring plan are Zellers stores.

And sources speculate that if the plan is successful, one of HBC's four major brand-name stores could disappear from one part of Canada.

"It's not shocking that he's doing this," said a source familiar with HBC's leases. "To make that company viable, they've got to get rid of some of those stores."

An industry source familiar with the list circulated by HBC described it as preliminary.

"It's really them saying 'are you interested in these stores,' " the official said.

That process could result in retailers showing interest in stores that have not been singled out by the company. "The list is a beginning point of discussion of stores they are prepared to close. But what's on the list today could be very different from what's on the list when they finalize what leases they are getting rid of," the source said.

Retailers that have been contacted by HBC, including a major grocery chain, were given access to the locations of the targeted leases although copies of the confidential list were not made available.

Officials at HBC declined to comment yesterday.

Industry sources say Mr. Zucker will likely have to pay a heavy price to close down stores in smaller cities and communities where landlords will have difficulty finding new tenants.

"The question is how much is it going to cost Zucker to get out of the uneconomic leases? That was always the swing factor in trying to price the company," said a source familiar with HBC's store leases.

Making matters worse for HBC, industry observers say, is the company doesn't have much leverage at the negotiating table with its landlords.

For example, if a company embarks on a major restructuring program to stop losing money one of the options available is to file for bankruptcy protection under the Companies' Creditors Arrangement Act (CCAA). Filing under CCAA allows companies to restructure and negotiate with its creditors under court protection, and in doing so, provides them some leverage to negotiate for discounts with their landlords.

However, industry sources say it is highly unlikely Mr. Zucker would file for bankruptcy protection after having fought almost two years to gain control of the company and take it private. As a result, HBC's landlords are expected to take a tough stance.

"He's got to go on bended knee to landlords to let him off the hook," said the source familiar with HBC's troubled leases. "They'll say no, and the next thing he can do is bring in someone to step into HBC's shoes. The landlords will then put the new potential tenants through tough credit tests to decide whether they'd make a better tenant than keeping Mr. Zucker on the hook."

Although most industry analysts and commercial landlords expected Mr. Zucker to try to bail out of some leases to stem the hemorraghing on the company's balance sheet -- it lost $175-million last year -- many were surprised that HBC opted to appeal directly to retailers, especially since landlords can veto attempts to sublease a property.

"[Zucker] might be just trying to prepare himself for future discussions with those landlords," said a real estate source. Others mused about whether the American businessman doesn't understand how retail real estate operates in Canada. "He's not going about this the way someone in Canada would; real estate in Canada is done by a handful of insiders," said a source.

SSLL

Mar 29, 2006, 9:21 PM

From: http://www.theglobeandmail.com/servlet/story/LAC.20060329.RHBC29/TPStory/Business
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Zucker answers speculation, says no mass HBC closings
New owner, 'truly excited,' promises to expand and improve on store formats

MARINA STRAUSS
RETAILING REPORTER
In a bid to stanch speculation about shutting many stores, Jerry Zucker spoke out yesterday about his plans to revitalize existing Hudson's Bay Co. outlets rather than pursue "mass closures."

The new U.S. owner says he is looking to replace smaller Zellers stores with expanded ones and add new Home Outfitters and Designer Depot outlets. And he said he plans to "aggressively" roll out HBC's small general merchandise Fields chain.

"I purchased this company based on its fundamental value, part of which resides in the strong national franchise of stores we operate from coast to coast," the South Carolina businessman -- and now HBC chief executive officer and governor -- said in a statement.

"I am truly excited about this company's opportunities and we intend to grow HBC's five formats by improving our portfolio, not through mass closures. That's just not in the cards and anyone speculating that it is, is not informed on my vision for HBC."

Mr. Zucker's move to confirm HBC's real estate strategy follows media reports over the past several days that suggested that he was looking at cutting as many as 80 stores.

A list of more than 80 HBC outlets was being circulated to major retailers in Canada in an apparent attempt to drum up interest in taking over the leases.

But Robert Johnston, a new director of HBC and a vice-president at Mr. Zucker's U.S. company, said on Monday that the CEO never issued the list, nor approached the other retailers.

Moreover, Mr. Zucker is legally committed to Investment Canada to not close so many stores, Mr. Johnston said. Mr. Zucker had to make certain undertakings to the federal government in order to get approval for his recent $1.1-billion acquisition of the Canadian retailing icon.

Yesterday, Mr. Zucker said HBC continues to pursue a strategy of closing or renovating stores that are less than a set size, or in underperforming locations.

Over the past five years, the strategy has resulted in an average of 10 store closings a year and a total of 45 renovations. "HBC anticipates closures and renovations in 2006 to be consistent with these figures," the statement said.

To underline his commitment to holding on to stores, Mr. Zucker said he will not go ahead with "a number" of previously targeted closings. Instead those locations "are being revitalized and rebranded."

Mr. Johnston suggested that some of the weaker Zellers stores may be converted to other banners under the HBC umbrella. It runs more than 550 stores in all, including the Bay.

HBC said it will open replacement locations for five existing Zellers stores that will represent the Zellers prototype "and be significantly larger than the existing locations." As well, in Ontario, the Oakville store is being expanded and new stores will open in Waterdown and Orleans.

Home Outfitters will open three stores this year and more in 2007; the fledgling Designer Depot, a discount fashion chain, will open four stores to add to the existing five.

Neither Mr. Johnston nor an HBC spokeswoman replied to numerous messages yesterday.

SSLL

Mar 29, 2006, 9:25 PM

From: http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1143586212077&call_pageid=968350072197&col=969048863851
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Malls see bright future
Yorkdale, Square One are renovatingShrugging off department-store turmoil
Mar. 29, 2006. 10:12 AM
DANA FLAVELLE
BUSINESS REPORTER

Who says the traditional shopping mall is dead?
Both Yorkdale Shopping Centre and Mississauga's Square One are in the middle of major renovation projects. Owner Oxford Properties Corp. plans to spend $74 million over the next two to three years.
"This is a particularly large investment because it's part of a larger program," Paul Brundage, executive vice-president of real estate management for Oxford Properties, said yesterday.
The malls are among $6 billion in real estate Oxford owns or manages on behalf of the Ontario Municipal Employees Retirement System, a big pension fund for civic employees.
Both malls have added extra space in recent years. Now they're upgrading existing space.
"It's like your house. You have to invest to preserve the value of the asset," Brundage said.
It's also part of keeping up with changing times in retail. In recent years, the traditional shopping mall has faced competition from online retailers and suburban power centres. Now, the mall is grappling with turmoil in department stores with ownership changes at Hudson's Bay Co. and Sears Canada.
But Brundage said the fallout may present an opportunity for the malls.
The country's last two department-store chains have traditionally acted as "anchors" for mall owners. But increased competition from American big-box retailers and European specialty chains has hurt department-store sales.
"It's a very dynamic environment," said Brundage. "Obviously, we're monitoring both HBC and Sears very closely. We see it as an opportunity for us to possibly get that real estate back and re-merchandise it with different types of tenants that would prefer to be in an enclosed mall."
The situation varies from mall to mall, he added. A Bay store in one mall could be a strong performer, while a Bay store in another mall may perform poorly. Supermarket chains are looking at going back into malls, he added. Oxford Properties recently signed a deal with Loblaw Cos. Ltd. to build a grocery store on the lot outside the Scarborough Town Centre.
At Square One, upgrades include better flooring, lighting and so-called street furniture, or the seating outside the stores. But the biggest improvement will be in the signage and other visual cues.
"We're a very large mall, and the biggest complaint we get from customers is it's difficult to get around," said Square One general manager Nance MacDonald.
The mall is being visually divided into three distinct "environments" intended to help customers find their way around, she said.
At Yorkdale Shopping Centre, the older part of the mall is being upgraded to look and feel more like the $60 million addition that opened last April, said general manager Jay Lee.
With a six-storey glass atrium, limestone floors, benches and real trees, the newer section is like an upscale city street. The addition houses 40 new stores, including the city's first Apple Computer store.
"We had incredible results with the new addition," said Yorkdale's Lee.
"We wanted to build on that momentum."
Both mall managers played down concern about Sears and the Bay.
Even if the department stores left, the malls would have no trouble renting the space to other retailers, said Square One's MacDonald.
Many new retail concepts that come to Canada open their first stores in the Greater Toronto Area and quickly move to the biggest malls, particularly fashion-driven retailers and chains aimed at teens, MacDonald said. Cheap-chic European fashion retailers Zara and H&M and cosmetics specialty chain Sephora are classic examples.
Some retailers have learned they fare better in a traditional shopping mall than either online or in suburban power centres, MacDonald said.
Malls appeal to younger shoppers because they can get there by public transit instead of going by car to the power centre with Mom and Dad, she noted.
As well, in the fashion world, online retailers can't compete with the ability to touch and feel an item before buying it, she said.

SSLL

Mar 29, 2006, 9:26 PM

From: http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1143718868432&call_pageid=968332188492
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La Senza eyes global expansion as profits rise
Mar. 30, 2006. 12:44 PM
CANADIAN PRESS

Lingerie retailer La Senza Corp. (TSX: LSZ.SV) told investors Thursday that it is eager to pad out its international profile, a day after posting an annual profit of $17.7 million.
"International expansion is going to continue at the current pace, without question," CEO Irving Teitelbaum said during a conference call with analysts.
"Our cap-ex (capital expenditures) budget will be the strongest cap-ex budget over the last three years and the most aggressive — and yet still allows the company to fund its strong dividend payments out of cash flow."
He declined to specify how much capital is earmarked for growth, but noted the firm plans to open 28 new stores.
Another 20 outlets will be given a makeover, while seven are slated for closure as it converts its Silk & Satin stores to its La Senza Express banner.
La Senza's stock hit a 52-week high Wednesday after the lingerie retailer pushed up its quarterly dividend 25 per cent and said sales and profits rose substantially in the latest fiscal year.
The Montreal-based chain said it earned $17.7 million, or $1.30 per share, in its 2006 financial year, ended Jan. 28. That compared to a profit of $81,000, or one penny per share, in the previous year.
In response, its board boosted its dividend from 16 cents per share to 20 cents per share, for shareholders of record on April 12.
Excluding losses related to the closure of its U.S. operation, La Senza's earnings were $19.7 million, or $1.44 per share, for the year, compared to $7.6 million or 57 cents per share in its 2005 financial year.
The company's loss from discontinued operations amounted to $4.6 million in the fourth quarter, and total earnings for the three-month period were $11.3 million, or 82 cents per share.
Fourth-quarter sales rose 15.5 per cent, to $133.4 million, while full-year sales increased 15.8 per cent, to $410.9 million.
Sales at stores open for more than a year rose by 8.2 per cent over the year.
During Thursday afternoon trading on the Toronto Stock Exchange, its shares were flat at $21.

SSLL

Apr 5, 2006, 9:26 PM

From: http://www.theglobeandmail.com/servlet/story/RTGAM.20060403.wxrgiant03/BNStory/Business/home
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Giant Tiger on prowl
Small-town discounter reveals its big-city ambitions as it courts the style-hungry

MARINA STRAUSS
From Monday's Globe and Mail
Jeff York knew one of his fashion buyers was on to something. In November, when she made her regular checks of trendy teen stores in California, she noticed that women's long tank tops were hot. She got on her BlackBerry to an importer, did the math and figured that the shirt could be sold on the floor of Canada's Giant Tiger for just $5.97.

Within two months, 6,000 of the made-in-China summer tops were shipped to 100 stores as a test. "If something sells out of season, that means it will sell like crazy when it's in season," said Mr. York, president of the chain.

This month, about 20,000 long tank tops will arrive in the stores from overseas. And it's all because of one of the chain's 15 savvy fashion buyers. They work from a Montreal office but spend most of their time scouring North American hot spots in search of cheap chic. Mr. York values these buyers so much that he won't let them be interviewed, for fear that they'll be snatched away by a rival.

Giant Tiger Stores Ltd., a privately owned 163-store general discounter, has ambitious plans. From its base in Ottawa, it has been slowly building a name in small towns since 1961, offering low-priced goods from jeans to frozen pizza and electronics. Along the way, it established a reputation for value and style -- all of it very affordable.

But now Giant Tiger has set its sights higher. It is adding stores in bigger cities, and is currently on the prowl for locations in the ultracompetitive Toronto area. And it's focusing more on fast fashion. In doing so, it is joining a host of discount players all fighting for the price-conscious, style-hungry consumer.

"When you go into these markets, you'd better have done your homework," Mr. York said. "You test product and if it sells, you go get more. . . . You've got to find where you're relevant to the customer."

Matching product availability to customer demand is the cornerstone of the Giant Tiger mantra. Very early on, founder Gordon Reid, 72, chairman and chief executive officer, picked up on the importance of efficient inventory tracking. It was a trait he had studied carefully during his years at an international discount retail trade group. "When Wal-Mart came to Canada [in 1994], we were ready to compete with them," he said in an e-mail. He learned that even more important than selling a lot of products was quickly pinpointing the duds and ditching them, while reordering the fast-selling items.

For this reason, Mr. Reid empowers his store managers to order their own goods from a head-office menu of products. He figures they know best what sells in their own neighbourhoods.

Ten days ago, Richard Bishop, manager of the new Mississauga store, realized he was running out of women's cellphone hoodies (hooded jackets with a sleeve pocket for the phone: $12.97) and stretch yoga pants ($9.97) because they were such hot items. He ordered more, and the goods arrived by courier a couple of days later.

"As we start seeing the trends, as they emerge, we can jump on them, where other managers [at other retailers] don't have that ability," Mr. Bishop said.

To try to stay on trend, Giant Tiger has borrowed a page from fast-fashion retailers such as Spanish-based Zara and ships new styles to stores every day, by Purolator.

"They seem to have a good formula," said Phil Lichtsztral, who heads RSM Richter Inc.'s retail consultancy. "They're very good buyers and they're very good negotiators."

The hard part is taking on bigger, well-established discount competitors in urban centres, said Philip Toy, managing director of Mercer Management Consulting. Winners has a strong following, while Loblaw is pushing more into the discount arena and Wal-Mart is adding more products and bigger stores. Giant Tiger is "below the radar screen of consumers in major centres."

Giant Tiger executives are trying to carve out a niche by running a no-frills operation, picking up cheap real estate in strip malls abandoned by other merchants, thus becoming a more convenient -- smaller -- alternative to Wal-Mart.

It is so penny-pinching that it doesn't list store phone numbers so that it doesn't have to hire receptionists, Mr. York says. The practice also forces consumers to shop the stores and discover the "treasure hunt" of new items, he says.

It taps into a tried-and-true formula used by Costco Wholesale, but on a smaller scale, he says. Costco continually brings new products to its stores in a bid to entice customers back.

How do his buyers find their goods? Some are purchased overseas, but the trendy fashions are generally sourced closer to home and delivered to stores within three weeks.

Every Monday, suppliers show up at Giant Tiger's buying office in Montreal with samples of excess or returned stock. The buyers also shop fashion stores from New York City to Los Angeles. When they spot a hot look, they negotiate with a manufacturer to have the item made up for Giant Tiger at a cheaper price, Mr. York says. "All they do is sew on a different label."

Giant Tiger's stripes

Annual sales: More than $1-billion at 163 stores.

Western Canada expansion: North West Co. runs 16 of the stores and can expand to 72 under an agreement with Giant Tiger to operate outlets in Western Canada.

Family ties: Founder, chairman and CEO Gordon Reid, 72, is semi-retired, while his three sons, Scott (a Conservative MP), Jack (who deals with charities) and Blake (the company pilot) sit on the board of directors; stepson Keith runs the original Ottawa store. "They all grew up serving customers, bagging at the checkouts and working in the office," the elder Mr. Reid says.

What's with the name? Mr. Reid started out catering to men, and says he chose a name with a masculine image. When the stores started to court families, he changed the logo to a friendly looking tiger from a fierce-looking one after the latter made children cry.

Ottawa roots: Mr. Reid was supplying sporting goods to discounters in the United States and realized how successful these stores were. He says he chose Ottawa to launch his business in 1961 because of the financial stability of a government service town.

Getting around: Giant Tiger has a transport division, Tiger Trucking, but it uses Purolator to ship fashions to the stores on a daily basis. The company has a Cessna airplane for regular store visits, although fashion buyers book commercial airlines -- and look for seat sales -- when travelling around North America to shop for new ideas.

SteelTown

Apr 6, 2006, 8:16 PM

Lowe-down on Depot battle
Lowe's checking site near Home Depot
Reported also eyeing Hamilton, Barrie
Apr. 6, 2006. 07:17 AM
DANA FLAVELLE

One of Toronto's most exclusive home and design shopping districts is about to become a battleground in the war between Home Depot Canada and its newest rival, Lowe's Canada.

The companies' U.S. parents already compete hammer and nail south of the border, though Home Depot is twice the size of Lowe's, its nearest rival, in annual sales.

Lowe's is now pursuing a site on the northeast corner of Castlefield Ave. and Caledonia Rd., within blocks of an existing Home Depot Canada store, according to reports confirmed by City of Toronto documents.

Lowe's has also locked up a site in Hamilton, on Barton St., a Lowe's spokesperson confirmed yesterday. And unconfirmed reports say the company is also pursuing a site in Barrie on Molson Park Dr., across from a Rona Home and Garden store.

Lowe's declined to comment on its interest in the Castlefield site, saying it's too early in the process.

But public documents filed with the Ontario Municipal Board name Lowe's as a party to a development application for a large retail store on the site of a former paint manufacturing plant in that location.

Home Depot already operates a store in the area, which is also home to such upscale home-improvement merchants as Taps bathroom fixtures, Elte Carpets and Union Lighting.

Yesterday Lowe's commented publicly for the first time on its plans since announcing early last year that it planned to enter the Canadian market in 2007.

The company still intends to open between six and 10 stores in Canada next year, Lowe's spokesperson Jennifer Smith said yesterday.

The retailer has said it believes there is room for 100 Lowe's stores in Canada, eventually.

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&call_pageid=971358637177&c=Article&cid=1144273817088

SSLL

Apr 6, 2006, 10:12 PM

From: http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1144318866323&call_pageid=968350072197&col=969048863851
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Sears parent claims win
Apr. 6, 2006. 11:34 AM
CANADIAN PRESS

Sears Holdings Corp. (Nasdaq: SHLD) declared victory Thursday in its sweetened $18-per-share bid to buy out minority stockholders of Sears Canada Inc. (TSX: SCC), but at least one holdout investor suggested the fight is not over.
The Chicago-based retailer said it has secured commitments for more than half of the 46.2 per cent of the Canadian subsidiary that it didn’t already own when it launched its privatization bid late last year.

It wasn’t immediately clear whether Sears Holdings had reached the 90 per cent threshold that would enable it to force the Toronto-based company to be delisted from the Toronto Stock Exchange.

“They are talking about it as if it is over and I’m not sure that that is the case,” said Ron Mayers, head of alternative strategies at Desjardins Securities Inc., which holds Sears Canada shares.

“I think probably there’s another shoe to drop here.”

America’s No.3 retailer had insisted Wednesday that the $18-per-share offer — bolstered Monday from $16.86 and valuing all of Sears Canada at more than $1.9 billion — was “its best and final offer.”

But Sears Canada shares continued to trade above the offer price, closing Wednesday at $18.59 and trading after Thursday’s announcement as high as $18.50, changing hands late in the morning at $18.27.

Independent directors of Sears Canada had opposed the initial bid from Sears Holdings, created a year ago in the $11-billion (U.S.) merger of Sears Roebuck and Kmart under hedge-fund magnate Edward Lampert.

But Sears Holdings warned that if its proposal was rejected, ``Sears Canada will face the increasingly competitive Canadian retail environment without the financial and operating benefits of being owned 100 per cent by Sears Holdings” and it would stop paying dividends.

The offer was set to expire April 18, but Sears Holdings said Thursday it will be extended to Aug. 31 and the going-private transaction is expected to close in December.

“We are pleased that our transaction has received the support of a majority of the minority shareholders, including the two largest minority shareholders,” stated Sears Holdings vice-chairman Alan Lacy.

“With the success of our offer assured, we expect other Sears Canada shareholders to tender their common shares in order to promptly receive our offer price of $18.00 Cdn per share.”

Sears Holdings, with $55 billion (U.S.) in annual sales at 3,900 stores in the United States and Canada, now will “work to leverage the strengths of our two companies.”

SSLL

Apr 6, 2006, 10:14 PM

From: http://www.canada.com/nationalpost/financialpost/story.html?id=dcac8bb0-a08b-44f7-a123-df0a5250fb99&k=92006
___________________
Thursday, April 6, 2006
National Post

Home Depot nails down its territory in Canada
Lowe's still eyes Canada

Peter Koven, Financial Post
Published: Thursday, April 06, 2006
Home Depot Inc. is building out its Canadian chain by another 18 stores in 2006 in an attempt to gain market share and thwart its key U.S. rival, Lowe's Cos., which plans a 2007 push into Canada.
"We look at where competitors could put stores, and we put stores in those spots," said Annette Verschuren, president of Home Depot Canada. "Particularly in the urban markets, we're very 'well-stored.' It's not that easy to find good sites around."
Home Depot, the world's biggest home improvement retailer, said yesterday it plans to open 18 new stores across Canada this year, after opening 20 last year. Nine of the new locations will be in Ontario. The company will invest $450-million in the stores, and expects to create 2,200 jobs. Home Depot already has 138 Canadian locations. "I get more inquiries from people wanting new stores than you can shake a stick at," Ms. Verschuren said.
But industry observers said that Home Depot's first priority with this expansion is sending a message to Lowe's. "That's undoubtedly it," said John Williams, retail consultant and president of J.C. Williams Group. "Just knowing Home Depot, they're very aggressive. There's just no way they want a foreign interloper to come into this market."
Mr. Williams said Home Depot's expansion could effectively stall Lowe's efforts to make a mark in Canada. "There's only so many good locations. You could tie Lowe's up (by buying land) without building anything," he said.
If Home Depot's expansion proceeds as planned, it will have 165 stores operating in Canada before Lowe's opens its first one. But Lowe's said it isn't concerned.
"Our focus is on our customers, not our competition," said Lowe's spokesperson Jennifer Smith. "We remain on track with our plans for Canada."
Lowe's expects to open six to 10 big box stores in the greater Toronto area next year, and eventually up to 100 across the country.
The Mooresville, N.C.-based retailer has revealed very little about its expansion plans since announcing it would enter Canada in June of last year. The Canadian management team plans to move into its Toronto offices next month.
That sets the stage for a big market share battle. Home Depot is in the midst of a five-year plan to double its share position, which currently sits at around 14.5%. At the same time, Rona Inc. is planning to build 20 stores in each of the next two years, adding to its total of 563 franchised, affiliated, and corporate locations.
Rona has often been rumoured as a possible takeover target for Lowe's. Lowe's refused to comment, but Ms. Verschuren at Home Depot said that "could be an entry strategy."
"I'm certain [Lowe's] has looked at Rona," said Toronto-based retail consultant Wendy Evans.
"It's a lot easier and a lot faster to grow through acquisition. But a lot of the Rona stores are not big boxes like Lowe's are."
Despite their ambitious growth plans, Home Depot and Lowe's both said they aren't concerned about over-saturation. According to analyst Peter Holden at Veritas Investment Research, there will "always be more locations."
"Home Depot are pretty smart guys," he said. "The market has been growing pretty fast the last few years. They keep building stores and people keep showing up."

SteelTown

Apr 9, 2006, 10:34 PM

Well it appears H&M will have it's flagship with street presence to Jackson Square! YAY!

Jackson Square mall manager Vivian Johnson will soon announce a new tenant for the old Club Monaco site at the corner of King and James. She's not saying who the new tenant will be but c'mon an announcement well we all search for where H&M will locate in Hamilton? Obvious.

Big boost for downtown Hamilton.

neilson

Apr 9, 2006, 10:57 PM

SteelTown

Apr 9, 2006, 11:25 PM

I think H&M choice Jackson Square over Limeridge (well I'm assuming the announcement is about H&M coming to Jackson) is because it wanted a flagship street presence instead of being surrounded by parking lots.

I'm pretty sure Limeridge Mall won't have any problems finding tenants and it certainly isn’t poor when it has American Eagle, Gap, Old Navy, Tommy Hilfiger, Roots any my favourite Cinnabon! mmmmmmmm.

Hey I guess it's payback since Limeridge took a lot of tenants from Jackson Square. It's just that Jackson Square has been on a roll with new tenants over the last 3 months.

By the way the only Grand and Toy store in Hamilton is in Jackson Square lol.

miketoronto

Apr 10, 2006, 4:30 AM

Limeridge Mall should be shut down.

Hamilton should never have allowed it to be built, knowing that a city that size could not support a mall and downtown retail.

If Limridge was not built, I think the fortunes of downtown Hamilton would never have gone down in the first place.

SSLL

Apr 14, 2006, 10:12 AM

From: http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1144965013802&call_pageid=968350072197&col=969048863851
__________________
Giant malls lead in sales, draw shoppers from afar
Apr. 14, 2006. 01:00 AM
DAVID BRUSER
BUSINESS REPORTER

It's big-box central around Highways 400 and 7, with about as much square-footage of retail space as Yorkdale, the Eaton Centre and Square One malls all rolled into one neighbourhood.
Brimming with strip-malls and power centres, the Woodbridge section of Vaughan is the top retail area in the country, leading a list of 20 hotspots compiled by researchers at Ryerson University.
In fact, the majority of the top 20 are suburban, confirming the trend evident throughout the Greater Toronto Area, where once-sleepy towns like Milton are new homes to big-box retail.
Meanwhile, in parts of Durham Region, politicians and the public are staking their positions as big-box developers come calling with the promise of jobs, tax dollars and, some fear, the death of Main Street.
The 2002 data show that a cluster including three power centres — shopping venues anchored by three or more major box stores — and 13 shopping centres near Highways 400 and 7 in Woodbridge reported total sales revenue 8.4 times higher than the national average. "The retail landscape has been suburbanized over the last few decades," said Tony Hernandez, director of the Centre for the Study of Commercial Activity at Ryerson. "It's very much going hand-in-hand with new residential subdivision growth. Around Vaughan or Markham, where you have the 1,500 square foot lot, at the (nearby) major intersections, you'll have some retail and more often than not that format is big-box."
The study culled sales information found in tax records from stores in areas defined by postal code. Each area has on average 7,000 residents, though some downtown core neighbourhoods have a much higher concentration, Hernandez said.
But the origin of the purchasing power driving Woodbridge's performance is not measured the same way. Shoppers don't always stay close to home. Woodbridge's high shows shoppers, regardless of address, take their cash to the suburbs.
"The Highway 7 and 400 area, that has around three million square feet of big box retail. So that's the equivalent of three super-regional shopping centres," each with one million or more square feet of retail, such as Yorkdale or the Eaton Centre, Hernandez said. "It would be the equivalent of putting three of these super-regionals at that one intersection."
In Scugog Township, where developers want to build a major department store near the town of Port Perry, Mayor Marilyn Pearce is not sure whether she aspires to a top-20 ranking.
"Maybe we would be unique if we said no to big-box completely. I don't know that we can do that," she said. "No matter what study has been done on big-box stores, it always comes out 50 per cent of the community wants it, 50 per cent doesn't.
But in the Municipality of Clarington, where a major big-box development is facing opposition from small business owners and others, Mayor John Mutton said he wouldn't mind a place on the list.
That's "because you're not only capturing retail sales within your own community but you're also more of a draw or an anchor for other communities," he said. "Who wouldn't like to have Vaughan Mills mall in your community? As long as you provide the right type of protection for your downtown. Mind you, I don't want to see power centres pop up all over."
Mega-mall Vaughan Mills opened in late 2004, so sales from its stores are not included in the 2002 study.
"You can just imagine what kind of sales numbers you'd be getting now. Probably within a one-mile area, you've got approaching five million square feet of retail," Hernandez said. "It's a pretty dominant retail cluster."
The GTA accounted for seven of the top 20 shopping concentrations in Canada, including Markham/Unionville, and the areas that include Yorkdale, Scarborough Town Centre and the Eaton Centre.
Frank Miele, Vaughan's commissioner for economic and technology development, said the ranking reflects his city's effort to give locals and tourists a reason to shop north of Toronto.
"Vaughan has the highest per family income in Ontario. There is a pretty affluent community," he said. "The power centres are an important component of a community's lifestyle. People have to shop somewhere. We want them to shop locally."
Toronto's central business district, which includes the Yonge St. corridor and the Eaton Centre, ranked ninth on the list of 20, up from 12th the year before. In 2001, Woodbridge ranked 14th.
But a ranking of the top 20 Canadian fashion retail areas shows the downtown core in Toronto and Montreal are in the top five. The study says that underscores the importance of business employees and tourists to the fashion market.

SSLL

Apr 15, 2006, 10:23 AM

From: http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1145051410260&call_pageid=968350072197&col=969048863851
___________________________
14 outlets and still growing
Longo's supermarkets are heading back downtown. The first store opened 50 years ago and the chain has found favour with those seeking exotic and fresh produce
Apr. 15, 2006. 01:00 AM
DANA FLAVELLE
BUSINESS REPORTER

The first thing you notice inside a Longo's supermarket is the football-sized papaya, seductively sliced to reveal the fruit's contrasting orange flesh and black seeds.
Chunks of the exotic Jamaican fruit sit on a nearby plate under a sign that says "Why not try ... jumbo papayas?"
The weekly promotion is part of a marketing strategy to draw attention to Longo's best features: Its massive strength in fresh fruit and produce and its commitment to staying ahead of gourmet trends.
Elsewhere in Longo's compact stores — they are roughly one- third the size of a conventional supermarket — are more than a dozen kinds of soft, velvet mushrooms, six tiers of granular specialty mustards and enormous gooey "Killer" brownies.
"They're good for you — no trans fats — as long as you don't eat more than one, like I do," chuckles Anthony Longo, president and chief executive of Longo Bros. Fruit Markets Inc. He laughs easily and often. Perhaps, he can afford to.
In an industry where profit margins are thinner than a slice of prosciutto and competition among the superstores — Loblaw Cos. Ltd. and Wal-Mart Canada Corp. — is intensifying, Longo's appears to be thriving.
The privately held company doesn't publish financial results. But the fruit and vegetable stand Anthony Longo's father and two uncles founded 50 years ago has quietly grown into a small local chain of 14 grocery stores.
"We never go down. We always go up. Slowly. Our last (new store) opening was 18 months ago," Longo says. Along the way, the company has expanded the average size of the stores, added new departments and purchased an online food-delivery business. The company's formula for success has been to stick with its core strengths, Longo says.
"Over 50 years, fresh produce has always been our mainstay," he says. "We always say whatever we do has to be as good as our produce department."
While the Canadian food industry leader, Loblaws, continues to add ever-more product offerings, from leather club chairs to cheap chic designer clothing, Longo remains focused on food. Some would say relentlessly so.
"It sounds trite, but Longo's success comes down to two things," says John Scott, executive director of the Canadian Federation of Independent Grocers. "One, its singular passionate focus on providing good food. And two, its entrepreneurship. If they see the customer going in a certain direction, they search the world to bring it into their stores."
A case in point, says Scott, was six years ago when consumer demand for organic food began going mainstream. Longo, the man, seized the moment and challenged his team to come up with an organic option for every aisle in the store.
Today, Longo's leads the pack in integrating its organic offering with mainstream brands instead of putting it in a separate department. Here, the organic olive oil is next to the national brand and private-label version. Ditto the milk, fruit juice, baby food, the meat and frozen prepared dinners.
"It's all about focus," says Longo. "What do you want to be known for? If a customer can't say within five seconds why they shop at a certain store then that store has a problem."
The original Longo Bros. fruit stand, at Yonge St. and Castlefield Ave., is long gone. And, until five years ago when the company opened a store in North York, Longo's no longer had a presence in Toronto's core. All its stores were in suburban locations.
But that's changing as Longo's heads back downtown. First up is a mini-store scheduled to open in the BCE Place food court, at Yonge and Richmond Sts., in July.
Next year, it will open a 50,000-square-foot store on the Burlington-Oakville border, its biggest one to date.
Two years later, Longo's will move into The Residences of Maple Leaf Square, one of the hot new condo developments in Toronto's booming downtown core.
The proposed two-tower complex beside the Air Canada Centre will also feature a hotel, restaurants, office and other retail space.
Longo's move into the city was driven partly by demographics. "Within a kilometre radius of Maple Leaf Square, they're building 10,000 condos. That equates to 17,000 people," Longo observes.
There's hardly a big-name retailer around who wouldn't give their soul for a piece of prime real estate in the city's centre. Witness the prolonged battle between Loblaws and Home Depot Canada for Maple Leaf Gardens on Carlton St.
But the timing for Longo's was ripe for another reason. The company's purchase two years ago of the failing online grocery delivery business Grocery Gateway had reintroduced a new generation of Toronto residents to the Longo's brand. The green and white delivery trucks are now a familiar sight across the city.
"Every week, we get requests from consumers in Toronto for a Longo's store," he says.
Most of Longo's corporate expansion took place after 1982 when the second generation started entering the business. Until then, the company had just three stores.
There are now 16 or 17 members of the extended Longo family working for the firm, including various in-laws.
"I grew up stocking the shelves of our stores and learned all about the freshness, quality, value and customer service that made Longo's what it is today," Longo said at the recent news conference to unveil the Maple Leaf Square development. On a tour of Longo's North York store, he refers to his teenage son's interest in the business and expresses hope that the third generation will do as well.

Kilgore Trout

Apr 15, 2006, 6:25 PM

SSLL

Apr 15, 2006, 9:40 PM

I agree, to fight the Wal-Mart/Loblaw's behemoth, Longo's is smart to differentiate itself through high quality, variety, and versatile locations.

BlackRedGold

Apr 16, 2006, 2:54 AM

compact, neighbourhood-sized stores with an emphasis on quality -- like longo's -- will be the supermarkets that thrive over the next several years. stores that try to ape the wal-mart supercentre approach like loblaw's will only suffer.

The grocery store market has increasingly gone to a two tier direction. In one direction there's the high end stores that focus on quality like Longo's and in the other direction is the discount stores like Basics, No Frills and Price Chopper. The middle market stores like Loeb, Safeway and Sobeys are going to get squeezed when Wal-Mart starts SuperCenters in Canada.

In my Ottawa suburb the retailer residents have wanted the most is Farm Boy, a local grocery chain that I suspect is similiar to Longo's. An outlet finally opened earlier this year and the parking lot is full whenever the store is open.

SSLL

Apr 16, 2006, 5:52 PM

No, I'd liken it more to Provigo in Québec. It's not quite as market-y as Farm Boy.

miketoronto

Apr 17, 2006, 2:20 AM

Longo's is by no means high-end. Its just a supermarket. My first job ever was at Longo's, and to be honest I can't stand their managment. Very bad managment, and not fun people to work for. Thats why I quit after a month :)

Anyway they are not high-end, and their prices are not that expensive. Its just normal, and they try to act high-end by only opening in so called "rich" areas of the region(mostly Italian areas since they are Italian). Their North York store and now downtown are really the only stores not in Italian areas of the Toronto region.

Now Miketoronto's favourite Toronto supermarket is HIGHLAND FARMS :). We have one near our house and I do go there sometimes when I need a supermarket. Check out their intro at

http://www.freshathighlandfarms.com/intro.html

Its a funny intro.

CMD UW

Apr 17, 2006, 5:42 AM

SSLL

Apr 20, 2006, 9:12 PM

I wonder where in Toronto and Ottawa they're thinking...

From: http://www.theglobeandmail.com/servlet/story/LAC.20060420.RSIMONS20/TPStory/National
_______________________
Amid gloom, a retailer grows
Simons sees sector's woes as opportunity

MARINA STRAUSS
RETAILING REPORTER
Quebec fashion favourite Maison Simons is preparing to expand to the rest of Canada as it looks to capitalize on the upheaval surrounding the traditional department stores.

Simons, which runs seven department stores in Quebec, anticipates major overhauls at Sears Canada Inc. and Hudson's Bay Co., which have both struggled to make gains and now face new ownership arrangements.

"The market is in so much flux right now," said Peter Simons, president at Simons and the fifth-generation family member to run the Quebec City-based business.

"I do think everyone is trying to cope with the uncertainty surrounding other major players in the market," he said in a telephone interview. "Sears and the Bay -- whether they're going to merge or not, or whether they're going to survive or not. It's not a secret. . . . Everyone is concerned and they're talking about it and they're developing contingency plans."

Simons has hired real estate broke J.J. Barnicke to hunt for space in the Greater Toronto Area, and is eyeing a site in Ottawa that would be developed by Morguard Real Estate Investment Trust, he said.

And prime targets for expansion could be the large downtown department stores run by Sears, if they became available, he said. Industry observers believe those stores don't ring up enough sales for their size.

Sears and HBC, which owns the Bay and Zellers, are in the throes of change. HBC was snapped up recently by U.S. businessman Jerry Zucker, while Sears is in the midst of being taken private by its U.S. majority owner, controlled by hedge fund star Edward Lampert. Industry insiders believe that the new operators will eventually want to unload some of their stores.

Simons is ready to jump. It has developed a strong following in its home province, offering mid- to high-priced fashions that tend to suit customers' tastes by tracking sales patterns through technology. In this way it is quick to reorder the hits and dump the weak sellers.

It focuses on customer service, with on-site alterations, tailors in every store and a system of reserving new merchandise.

It invests heavily in its stores and their design, spending considerable amounts on artwork, for example, Mr. Simons said. The downtown Montreal store boasts a suspended glass sculpture by artist Guido Molinari that cost "at least a couple of hundred thousand bucks." He believes customers like to be pampered in an attractive environment. "If they're treated well, then they do spend more maybe."

And Simons sends its merchandise team around the world to scope out the latest styles and bring them quickly to the shop floor, developing exclusive products. At any time, it could offer $20 private-label T-shirts and $4,000 faux crocodile Paul Smith suits.

"We have a culture of service," Mr. Simons said. "We approach service in a unique way. We don't focus on the selling, we focus on the experience."

In his bid to expand, Mr. Simons started thinking seriously about the move at the beginning of the year, he said. Already he is looking at opening his first non-Quebec store in Ottawa at a possible extension of the St. Laurent shopping centre.

Simons needs big locations -- 80,000 to 100,000 square feet -- for its stores. "Space like that isn't easy to find," Mr. Simons said. "It has to be developed. There is very little new shopping centre development. We're looking around, looking for opportunities that make sense."

And he's looking for opportunities that result from changes in the department store landscape. "I think there is a lot of very valuable real estate there," he said of the Sears downtown stores. "But it's only valuable if you can make money operating it. I'm an operator. I'm not a real estate guy and I'm not a finance guy. You can't just keep losing money in locations and pretend they're worth something to you."

He said Simons can count on its solid relationship with the major landlords, among them Cadillac Fairview Corp. and Ivanhoe Cambridge, which is an arm of the Caisse de dépôt et placement du Québec. "They're thinking about us and we're thinking about them."

But Simons will be patient, he said. The Ottawa store, which still needs to get municipal approvals, could open by the end of 2008.

Privately held Simons, which has more than $200-million of annual sales, expects each of its new stores to be in the black in the first year of operation, he said.

Another Quebec retailer, Les Ailes de la Mode, made a disastrous foray outside of Quebec and was forced to retreat. But Mr. Simons said he will be cautious in his expansion. "My thing isn't just about big rapid growth. It's overdone."

miketoronto

Apr 21, 2006, 3:38 AM

While I love SIMONS, I am not happy if they open stores in the rest of Canada.

When I go to Montreal, going to SIMONS is a special part of the trip. But if they are in all cities in Canada, they will just be another store, you can find anywhere. Takes the special unique factor out of coming home with clothing form SIMONS and people in Toronto asking me where I got the cool shirts, and pants, etc. :)

SIMONS just better watch out. They are nice and small now and doing great. But if they expand to all corners, they could face the same problems other retail stores face.

SSLL

Apr 22, 2006, 10:46 AM

You know Simons originated in Québec city, right? It's got seven store in total now. With a couple in Toronto and Ottawa, that's only nine, about the same number as Holt's, which I think keeps its uniqueness (even with three stores in Greater Toronto).

Kilgore Trout

Apr 22, 2006, 6:14 PM

yeah, simons is already a chain. there are three in quebec city alone, three in greater montreal and one in sherbrooke.

Rusty van Reddick

Apr 22, 2006, 7:31 PM

Could somebody from TO or Mtl tell me about "Goodfoot"? They are opening on 17th Ave here in Calgary (methinks the retail space above the new Fiasco Gelato) and there website is kind of inscrutable. I am assuming it's an "urban" shoe store?

Kilgore Trout

Apr 22, 2006, 10:58 PM

never heard of it, but considering its location in montreal, it's probably obnoxiously trendy and obscenely expensive. next time i'm on st-laurent i'll check it out, though.

Kilgore Trout

Apr 22, 2006, 11:50 PM

you know, speaking of 17th avenue, when a vancouver developer renovated the block behind tompkins square (the one where sandpiper books used to be) almost ten years ago, he said that he expected the street to become calgary's answer to robson street. it seemed absurd at the time but now i can actually see that happening. it'll probably take another ten years, but it's definitely coming.

Rusty van Reddick

Apr 23, 2006, 12:49 AM

^I agree- but it's damn upsetting to see two prime locations (8 St and 11 St) sit as empty lots for years now.

Very interesting new shop called Ghetto Blaster just opened where symbols of strength tattoo used to be- they have done an unbelievable job of sprucing up a derelict setting and making it like a b-boy version of Rubaiyat- the "graf supplies" behind the counter are like a jewelers case. Even my 42-year-old self was compelled to get a t-shirt there.

miketoronto

Apr 23, 2006, 4:55 AM

yeah, simons is already a chain. there are three in quebec city alone, three in greater montreal and one in sherbrooke.

I know its a chain. But its a small quebec only chain. It still has a uniquness factor to it.

If they open everywhere it won't be the same.

The Toronto Eaton Centre everytime I walk through there seems to be opening new stores. They seem to be kicking out long time tenants, and opening all these stores I never heard the names of before. I guess they are trying to keep it unique from other malls?

SSLL

Apr 23, 2006, 9:30 AM

Which stores are you talking about?

SSLL

Apr 23, 2006, 4:57 PM

From: http://toronto.fashion-monitor.com/news.php/toronto_shopping/2006041918sephora-canada
___________________________
Sephora Grows in Toronto
LVMH-owned perfumery chain Sephora is opening its third door in Toronto this month.

The new store, scheduled to launch on April 28, will be located in the Ontario city of Mississauga, a suburb in the Toronto area.

New Sephora location will house more than 150 beauty brands, including best-selling Tarte, Bare Escentuals, Dr Brandt and Philosophy.

"Sephora is committed to expanding our presence in Canada," Sephora retail marketing director Leslie Clyde tells Cosmeticnews.com.

"Sephora will open its third door in Toronto, with a possible other location, also in Toronto, planned for fall."[/quote]
I don' t know why they're saying they are opening their third door (rather than store)...There's also one opening in July at Scarborough Town Centre as well.

miketoronto

Apr 24, 2006, 3:17 AM

Thats not fun that Sephora is opening in all the suburban malls. I thought this was more a niche store that was just going to be in the Eaton Centre for a while.

What happened to the Toronto where many of the big name stores only opened in Eaton Centre, and that was it. The suburban malls did not get them.

There was a time when stores like Benneton, etc where only downtown at Eaton Centre. Now these stores are open everywhere. No fun.

neilson

Apr 24, 2006, 3:25 AM

jeffwhit

Apr 24, 2006, 6:41 AM

SSLL

Apr 24, 2006, 8:31 PM

miketoronto

Apr 25, 2006, 3:32 PM

I remember when artisanal booths and second-hand shops filled my local mall;)

Still, Sephora being in four malls in a metro of more than five million people isn't that bad. There might have been a time when there was just the Eaton Centre store (and maybe Yorkdale), but as the city grows, so do the shopping options.

Well I don't agree with having stores all over. Keep it downtown and thats it.

You go to my dads city in Italy for example, and each store only has one location, and thats downtown. They don't have suburban malls in every little spot like N.A. cities.

I just think maybe Canadian cities should have a little restricions in place.
I know UK cities do, and I think SF was also thinking of starting a law where stores could only open one or two locations.

Do Canadian cities really need GAPS every 5min apart, like now. Its a little much.

malek

Apr 25, 2006, 3:38 PM

if there's a GAP every 5 minutes, it means there's a need, there's clientele for it or else it would have shut down.

(i hate GAP btw).

keninhalifax

Apr 25, 2006, 4:03 PM

^ They work on the "if you build it, they will come" phenomenon. By gradually expanding into key locations, they essentially create their own clientele niche.

malek

Apr 25, 2006, 5:39 PM

Thats part of the equation.

Good for them.

SSLL

Apr 25, 2006, 8:48 PM

All part of being in a market economy, I guess. In the UK, it's more size and/or use restrictions rather than the amount of stores in the any given market you can open.

malek

Apr 26, 2006, 12:48 AM

Opening of new Omer DeSerres concept in Place Montréal Trust

MONTREAL, April 24 /CNW Telbec/ - Place Montréal Trust, a property held
and managed by Ivanhoe Cambridge, is pleased to announce the opening of an
Omer DeSerres store at the Metro Level (2). The well-known retail chain
specialized in arts and creative leisure supplies is inaugurating a completely
new concept, its first outlet, covering 10,000 square feet of floor space, in
a shopping centre.

"The entry of Omer DeSerres into Place Montréal Trust is a valuable
addition to our Centre," commented Debbie Ruel, General Manager of the Centre.
"It means that our customers working downtown will be able to find their
supplies and the inspiration for their creative leisure activities, while at
the same time being able to access the trend- setting products that they are
looking for."

Omer DeSerres adds its prestige to that of the many well-known superstore
lessees who have made Place Montréal Trust a prime destination in downtown
Montreal: Indigo, La Vie en Rose et Compagnie, Mexx, Winners, and Zara. Its
unique concept perfectly complements the constantly renewed range of products offered by the Centre.

At 4 p.m. on Wednesday, April 26, a press conference organized by Omer
DeSerres will be held to mark the opening of the store. It will take place at
the Metro Level (2). at Place Montréal Trust, and the spokesperson for the
event will be Diane Dufresne. She will be presenting her own exhibition, to be
launched in tandem with the store opening. The public will have an opportunity
to admire her work from April 26 thru May 13 during Omer DeSerres' business
hours.

About Place Montréal Trust

Place Montréal Trust stands in the very heart of Montreal, and attracts
over 14 million visitors a year. Located at the intersection of the major
commercial thoroughfare, Saint-Catherine Street and the prestigious McGill
College Avenue, Place Montréal Trust accesses the two busiest Metro stations
in the underground city within a city. It covers over 265,000 square feet of
rental space, shelters 70 stores and restaurants, and boasts the highest
indoor fountain in North America.

About Ivanhoe Cambridge

Ivanhoe Cambridge, a recognized leader in the real estate industry, is
one of the country's pre-eminent property owners, managers, developers and
investors in Canada. The Company focuses its activities on high-quality
shopping centres located in urban areas. With a strong Canada-wide presence,
the Company is also active in the United States and Europe, where it partners
with several major real estate entities. Its real-estate portfolio consists of
more than 43.2 million sq.ft. of retail space and mainly includes over
65 regional and super-regional shopping centres. As at December 31, 2005, the
market value of Ivanhoe Cambridge's assets reached almost CAD $9.3 billion.

Headquartered in Montreal (Quebec, Canada), Ivanhoe Cambridge is one of
the principal real estate subsidiaries of the Caisse de dépôt et placement du
Québec, the leading manager of institutional funds in Canada. The Company's
shareholders include four major Canadian pension funds. The Company's Internet
address is www.ivanhoecambridge.com.

SSLL

Apr 27, 2006, 9:47 PM

From: http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1146088214308&call_pageid=968350072197&col=969048863851
______________________________
Apr. 27, 2006
TONY WONG
BUSINESS REPORTER

Mall developer goes solo

It's not by choice, but lately Paul Gleeson finds himself in the position of having to pay more attention than normal to his business partners south of the border.

The vice-president of development for real estate developer Ivanhoe Cambridge has an agreement to build three giant malls across Canada with Arlington, Va., based Mills Corp. similar to their first major joint venture, Vaughan Mills.

Despite a sluggish start, the mall, just north of Toronto, has emerged as one of the more successful retail operations to open in the Greater Toronto Area and the first enclosed centre to open in 14 years.

But Mills Corp., which has been credited with revolutionizing the retail business by promoting the idea of shopping as entertainment, finds itself on financially shaky ground of late.

Hedge funds are hovering, a sale of the company may be imminent and the U.S. Securities and Exchange Commission has launched an investigation of the company's accounting practices.

"We are obviously watching closely what's happening," Gleeson said in a recent interview. What transpires will affect Ivanhoe Cambridge.

But in a candid moment, Gleeson makes one thing clear: Ivanhoe Cambridge plans to go ahead with plans to build more malls, whether its U.S. partner is along for the ride or not.

"Hopefully, they will be aboard, but we believe in the concept and we are prepared to do it on our own," says Gleeson. "Our agreement does not prevent us from building centres in Canada that are similar to Vaughan Mills."

A Mills Corp. spokesperson was not available for comment yesterday.

Ivanhoe Cambridge is a subsidiary of Quebec pension fund Caisse de dépôt et placement du Québec. Development costs for Vaughan Mills of $355 million were split between the two companies, which each have a half ownership.

Ivanhoe has a master agreement with Mills Corp. to build sites in the Calgary, Montreal and Vancouver areas. One location, just outside Calgary, is currently undergoing zoning for a 1.1 million square foot centre slotted for construction this year and a summer 2008 opening, says Gleeson.

"It's business as usual."

No one doubts Ivanhoe Cambridge has the financial muscle to go it alone. The company has a portfolio of 43 centres with a market value of $7 billion. But some industry insiders are wondering whether the company has the expertise to attract and package the big U.S. retailers, which has been a specialty of the Mills Corp. team.

At the moment, Mills staff continue to work with Ivanhoe Cambridge staff, Gleeson says.

"We are quite prepared to deliver a Mills-type project moving forward," Gleeson says. "Both companies had active roles in developing Vaughan Mills, and we will be using essentially the same team to deliver the other projects."

Gleeson says Ivanhoe Cambridge was active in small store leasing, while Mills was more involved in trying to attract big American retailers.

The 1.2 million-square-foot Vaughan Mills project near Canada's Wonderland has become a popular draw for tourists and shoppers with retailers such as Bass Pro Shops Outdoor World and Holt Renfrew Last Call.

The venture has been so successful that Ivanhoe Cambridge may expand the mall by another 200,000 square feet, he says.

(The largest mall in Canada and the world remains the West Edmonton Mall at 3.8 million square feet.)

Still, while Vaughan Mills has been a financial success for both companies, it took eight years to get off the ground.

"It did have its challenges finding tenants and it was struggling to get up to a decent opening at first," says John Crombie, national retail director for real estate company Cushman & Wakefield LePage Inc.

"I think they were hoping to get a lot more established American brands across the border."

But while some of the bigger American retailers may have decided to stay away, the mall has flourished in an environment that has been extremely favourable to retail, says Crombie.

"If they decided to sell, there is a lot of money out there looking to buy good quality retail," Crombie says.

"Have values gone up since they built? The Canadian story is still sound because this is quite a valuable asset," says Jamie Ziegel, vice-president of investment for Cushman & Wakefield LePage.

A recent study by Ryerson University shows that suburban shopping centres dominate retail in the Greater Toronto area as the population moves from around 5 million today to a projected 7.5 million in 2030.

"This provides lots of opportunity for developers to create the kind of lifestyle malls and entertainment centres since much of this growth is in the suburbs," says Tony Hernandez, director of the Centre for Commercial Activity at Ryerson University.

Hernandez says one reason for the success of Vaughan Mills is that it manages to differentiate itself from other Canadian malls.

"A typical Canadian mall has a degree of sameness to it, with similar retailers, but Vaughan has managed to offer something different," Hernandez says.

Gleeson would not comment on whether Ivanhoe Cambridge would purchase the half ownership of Vaughan Mills that it does not already own.

"There is normally some kind of provision set up that if something were to happen to one partner, the other partner would have the first chance to buy into the asset," says Cushman's Ziegel.

Last month, the U.S. Securities and Exchange Commission launched an investigation into Mills Corp.'s accounting practices.

The company said in January that it would restate financial results for 2000 through 2005 because of accounting errors, its second restatement in less than a year.

Earlier this year the company said its board hired Goldman, Sachs & Co. and JP Morgan Securities Inc. to look at strategic options including selling the company.

The stock has plummeted by more than half over the last year and one in five employees have been laid off in a massive restructuring.

Analysts say the company expanded too fast into markets that were too small to support the mammoth "shoppertainment" structure that the typical Mills mall needed.

Gleeson said unlike the U.S. market, malls such as Vaughan Mills are still unusual in Canada.

SSLL

Apr 27, 2006, 9:49 PM

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1146049088356&call_pageid=991479973472&col=991929131147
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Naked truth about Bloor St.
Apr. 27, 2006. 01:00 AM
BERNADETTE MORRA

Talk among a certain crowd is that Bloor St. has lost its lustre.
Wrong.
It might appear as much with a couple of empty storefronts in spitting distance of Gucci, the departure of Sporting Life from the corner of St. Thomas St., the impending departures of Betty Hemmings Leathergoods and Georges Rech and the recent exit of Marina Rinaldi.
But any talk of trouble is completely incorrect.
"Bloor St. had a great year last year," says commercial real estate broker Jordan Karp, on a little spree of his own in the vicinity of $650 Prada polo shirts at Holt Renfrew on Saturday. "No one is complaining. And the rents are reflecting that."
For the first time Bloor St. broke the $200 a foot barrier, with the arrival of Mappins jewellers last year. Leases are generally renewing in the $175 net and up range, Karp says.
Some are balking and walking. But for every retailer fed up with rising rents, there is another willing to pony up for Toronto's premier retail strip.
Among them:
Sephora will open on the south side of Bloor St. east of Louis Vuitton, Chanel, Hermès and Prada. The French beauty giant, owned by LVMH, is displacing Corbo, Georges Rech, and Betty Hemmings.
Mendocino is opening a 3,000-square-foot shop flanking the entrance of The Colonnade to the west. Upstairs, in the defunct Patriot restaurant, celebrity chef Wolfgang Puck will open a splashy new eatery that hopes to be up and running for the Toronto Film Festival.
Coach will replace Town Shoes once the latter's lease is up. Expect a cushy Coach flagship in early 2007.
Chanel and Harry Rosen are both investing in their current digs. Though nothing is official yet, CEO Larry Rosen does confirm an update to the flagship, possibly with the addition of another selling floor. The 16-year-old Chanel boutique which added a second floor in 1997, will undergo a major overhaul next year.
"There will be a complete change to bring our flagship on par with the look of Chanel boutiques around the world including New York, Bal Harbour, Rue Cambon and Avenue Montaigne," says Anny Kazanjian, executive director of public relations for Chanel Canada. Plans for the Peter Marino-designed Zen-style space are still on the drawing board, and the firm is deciding whether it will have to close altogether or relocate to some other part of The Colonnade during construction.

SSLL

May 1, 2006, 5:11 PM

From: http://www.canada.com/nationalpost/financialpost/story.html?id=587bd009-615b-4619-8bda-82bda3305d31
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Chain aims to ride Mizrahi's buzz
Fairweather group

Hollie Shaw, Financial Post
Published: Saturday, April 29, 2006
Not content to sit by while foreign rivals selling 'cheap chic' fashion swept into Canada, executives at Fairweather Group scored an exclusive deal with celebrity fashion designer Isaac Mizrahi to bolster the clothing chain's style quotient and give it some much-needed buzz.
The womenswear chain and its Quebec-based counterpart, Les Ailes de La Mode, recently debuted the Brooklyn-born maven's exclusive Canadian fashion line, boasting flirty summer styles at compellingly low price points.
"We feel the future of retail is in exclusive branding," said Kimberly Branch, general manager of Fairweather.
"The market in Canada has become globally competitive with the introduction of Mango, Zara and H&M and we wanted something to set us apart. We wanted to offer [customers] something exclusive, a designer they couldn't get anywhere else."
Mr. Mizrahi, a media-savvy personality who began his career in high fashion and now produces a mass line of clothing, accessories and home furnishings for U.S. Wal-Mart rival Target Corp., launched the line of 50 cotton and linen separates based around a black and white palette with floral prints and accents of poppy red and key lime green.
Prices for the line, including t-shirts, polos, skirts, dresses and trench coats, range from $12.50 to $79.50. The styles are showcased on a series of giant billboards across the country alongside head shots of the arch, curly-headed designer.
Mr. Mizrahi's Canadian debut coincides closely with the launch of Joe Fresh Style, homegrown fashion designer Joe Mimran's apparel line, at the general merchandise superstores owned by grocery giant Loblaw Cos. Ltd.
While Target successfully positioned itself as the stylish answer to Wal-Mart by signing exclusive deals with a handful of high-end apparel, furniture and housewares designers, such as Philippe Starck, Michael Graves and Cynthia Rowley, Swedish fashion giant H&M has generated a lot of hype showcasing one-off collaborations with designers Karl Lagerfeld and Stella McCartney.
H&M and the low-priced apparel chain Old Navy have had a powerful impact on the shopping habits of Canadians looking for affordable fashions, and Canadian retailers, from specialty boutiques to department stores, have taken notice.
Department stores and mass merchants have pursued numerous exclusive branding agreements with celebrities and designers in the past five years; Wal-Mart Canada sells a line overseen by Mary-Kate and Ashley Olsen; Sears Canada sells the Martha Stewart line of home goods and Canadian Tire developed a line of paint and home accessories with Debbie Travis.
Mr. Mizrahi, who signed a five-year agreement with Fairweather after he was sought out by the chain's executives, said he was never approached to sell his Target line at Zellers, owned by Hudson's Bay Co.
Industry consultants had expected the line to show up at Zellers, which sells several lines available at Target, including Mossimo and Cherokee.
Fairweather Group will begin selling Mr. Mizrahi's line of home decor and accessories late this summer at its decor and housewares chains Benix & Co. and Barnes and Castle.

SSLL

May 4, 2006, 8:44 PM

From: http://www.theglobeandmail.com/servlet/story/RTGAM.20060503.wsears0503/BNStory/Business/home
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Sears investors eye HBC
Canadian Press
Toronto — In a continued spat over Sears Holdings Corp.'s attempted buyout of Sears Canada Inc., a group of minority shareholders contesting the bid have floated the idea the retailer could be combined with competitor Hudson's Bay Co.

The group of shareholders, led by Pershing Square Capital Management LP, on Wednesday rejected a statement earlier this week from Sears Canada's Chicago-area parent company accusing them of attempting to push up the price of the takeover offer.

They also suggested that “based on a conversation with a former Hudson's Bay Co. senior executive, Pershing believes that a business combination between Hudson's Bay and Sears Canada could yield an additional $300-million of savings from the combined enterprises.”

The minority group did not identify the former executive.

On Monday, Sears Holdings vice-chairman Alan Lacy accused “Pershing and some other U.S. speculators” of delaying the proposed acquisition “in an attempt to extract a premium on shares they purchased recently at prices close to the final offer price of $18 per share.”

The minority shareholders, who also include Hawkeye Capital Management LLC and Knott Partners Management LLC, reiterated in a release that they believe the sweetened Sears Holdings offer of $18 a share undervalues the Canadian firm.

It accused Sears Holdings of being “motivated by its desire to squeeze out minority shareholders at a price that is a small fraction of the fair value of Sears Canada before including any synergies that can be obtained through 100 per cent ownership by Sears Holdings.”

The group noted that each member has held Sears Canada stock since early 2005, “more than one year before Eddie Lampert, chairman of Sears Holdings, attempted to acquire his first share of Sears Canada in the recent bid.”

“Members of the minority group intend to remain long-term holders of Sears Canada as a publicly traded company if they are successful in defeating the minority squeeze out transaction,” it added.

Pershing Square values Sears Canada stock's fair value at between $41.21 to $46.67 per share.

Sears Holdings Corp. is the third largest broad line retailer in North America, with approximately $55-billion in annual revenues, and 3,900 full-line and specialty retail stores in the United States and Canada.

SSLL

May 9, 2006, 9:21 PM

From: http://www.theglobeandmail.com/servlet/story/RTGAM.20060505.wxr-cover06/BNStory/Business/home
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Titans collide in battle for Sears Canada

ANDREW WILLIS
From Saturday's Globe and Mail
E-mail Andrew Willis
| Read Bio

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For two guys who just doubled their money on Sears Canada — a $300-million score — Jacques Chartrand and Claude Boulos can sure point to a lot of things wrong at the retail chain.

As the heads of Natcan Investment Management's $6.5-billion Canadian equity fund, the two money managers helped kick off the bitter takeover battle for Sears Canada by agreeing to sell their 9.7-million-share stake in the stores to its U.S. parent. Natcan headed for the exits in return for $16.86 a share, and was thrilled at the price. “Same-store sales keep falling. Canadians are going to the power centres, to big-box stores, so the traffic is going down at the malls where you find Sears,” says Mr. Chartrand, ticking off challenges facing the venerable retailer. “Management has tried different approaches, nothing has worked, and they are a bit complacent. I mean, this has got to be the last North American retailer with its own fleet of trucks.”

Given their pessimistic outlook, the Natcan team was all ears when they got a call last November from William Crowley, chief financial officer at Sears Holdings Corp., the U.S. parent of Sears Canada, and a partner in its controlling shareholder, ESL Investments, a $15-billion (U.S.) hedge fund run out of Greenwich, Conn., by billionaire Edward Lampert.

Backing up Mr. Crowley in presentations before the Sears Canada board, the Natcan executives had already helped push the $2.2-billion (Canadian) sale of Sears Canada's credit card division, and a subsequent $2-billion special dividend.

After three weeks of “tough, creative negotiations,” Natcan agreed to sell its 9-per-cent stake — acquired over two years ago for $150-million — to Sears Holdings. That set the stage for the parent firm's offer for the rest of the company. The moment that bid was announced, there was a flood of investors who play on the theory that motivated buyers such as parent companies will invariably dig deep, and improve their opening bid to get a deal done. The most sophisticated of these players are known as arbs, or risk-arbitrage hedge funds.

“We got a fair price, plus protection if a second bid was made,” Mr. Boulos says. “The arbs, they poured in because the statistics show that they can get a 10- to 15-per-cent bump in the bid.”

The arbs drove Sears Canada stock over $18, where it has remained since December. In April, Sears Holdings did improve its offer to $18 and won support from other major investors, with Natcan also getting the sweetened price. But at that point U.S. hedge fund Pershing Square Capital Management LP went on the offensive.

After buying shares at around $18, Pershing began making strident arguments that the Canadian chain is worth up to $46 a share. On the phone with Montreal-based Natcan, you can almost hear a Gallic shrug as Mr. Boulos says: “They can always dream.”

Just about every takeover of a Canadian subsidiary by a foreign parent — and there have been more than a dozen in the past decade — has seen tension between minority shareholders and the buyer. Occasionally, takeover bids don't get improved, and arbs get hammered, as they did when Rogers Communications dropped an offer for its wireless unit. Sometimes, the arbs clean up, as witnessed in the bidding war for Dofasco.

But no takeover has approached the flat-out nastiness of the Sears Canada fight. Hedge funds now control trillions of dollars and have become a major factor in capital markets around the globe. In Canada, we are finding out what happens when two of these powerful players go toe-to-toe.

This battle has grown so ugly that some combatants have withdrawn from the field. Sears Canada's independent directors quit the company rather than endorse the $18 offer. Said one source close to the board: “We just weren't going to be pushed around.” On Tuesday, there will be a meeting at which Mr. Lampert is poised to get full control of the board.

Bystanders are being wounded. Sears Holdings unleashed its lawyers at Osler Hoskin & Harcourt to wring an apology from Ron Mayers, head of alternative strategies, at Desjardins Securities who questioned the takeover tactics. Regulators are also being summoned. When Pershing Square and its allies dragged the Ontario Securities Commission into the fray, Sears Holdings shot off a press release asserting the hedge funds are trying to “change the law to bail them out of their mistake.”

Pershing Square, run by New York-based William Ackman, responded with its own release, labelling the assertions “vituperative.” That means abusive. That nine-page missive also referred to Mr. Lampert as “Eddie.” Friends can use the nickname. Coming from Pershing Square, sources close to ESL said it was an attempt to get under Mr. Lampert's skin.

The battle of egos, and thesauruses, is about more than chest-thumping by money managers.

Both Mr. Ackman and Mr. Lampert know their ability to do successful deals in the future — to sway boards or raise money — depends in part on burnishing their reputations as winners at Sears Canada. One source close to ESL said: “Lampert doesn't ever want to be known as a guy who rips off public shareholders. He's likely to be in Sears Holdings for a long time, and he plans to be in business a long time.”

The rhetoric has grown louder as Pershing Square suffers setbacks. In fact, Mr. Ackman may eventually lose out because he was too clever for his own good.

Pershing Square directly owns 5.6 million Sears Canada shares, bought after the takeover was launched. But the fund also bought 5.3 million shares last year. To legally avoid paying about $20-million in Canadian tax, it entered into what is known as a swap agreement. That deal saw Pershing Square hand over its 5.3 million Sears Canada shares to a Florida bank, SunTrust Banks Inc. In exchange, the fund got a note that entitled it to any future increase in Sears Canada's share price.

The only downside to this swap was Pershing gave up the right to vote the shares. But in a number of interviews, Mr. Ackman said market convention would see those 5.3 million shares either voted his way, or at least not voted at all.

Executives at several Canadian bank-owned dealers, all of whom routinely do these tax-based transactions on dividend-paying stocks, say Mr. Ackman has it wrong. The owner of the shares must be free to vote as it sees fit, they say — otherwise, the swap agreements might be considered tax fraud.

So who ended up owning the shares that Pershing Square swapped? That's a hotly debated subject. Pershing Square says the block ended up with Bank of Nova Scotia, an allegation both the bank and Sears Holdings deny. Mr. Ackman's best hope of torpedoing this takeover lies in attacking Scotiabank's role.

For what no one disputes is that the bank bought 4.5 million Sears Canada shares as part of a tax-driven trade. When Scotiabank decided to tender its big block to the $18 bid, it paved the way for Sears Holdings to squeeze out the remaining minority investors.

The other fact that's not in question is that Sears Holdings struck its deal with Natcan, then hired Scotiabank's investment dealer arm, Scotia Capital, as adviser on its takeover offer. Sears Holdings sources say they had no clue the bank owned Sears Canada shares, and point out that they also interviewed Merrill Lynch and BMO Nesbitt Burns for the job.

Scotiabank spokesman Frank Switzer said the two arms of his bank acted “with the utmost integrity.” But the two roles in this takeover opened the door for Pershing Square to claim Scotiabank had a conflict of interest. If Pershing Square can persuade the OSC to somehow toss out Scotiabank's 4.5 million votes, then Sears Holdings is no longer able to roll up the rest of the minority shareholders. To make the whole thing even more delicious, the chairman of the OSC is former Scotia Capital chief executive officer David Wilson.

For all its troubles, Scotia Capital stands to earn the Bay Street equivalent of minimum wage. The investment bank only stood to make a lucrative success fee — in the $3-million range — if Sears Holdings was able to get the chain for the opening bid of $16.86, according to sources at the bank and the American company. With the offer now at $18, Scotia Capital will receive a far more modest stipend. Short of a major reversal at the hands of the regulators, Sears Holdings will take over its Canadian subsidiary early in the new year. A prolonged court fight with Pershing Square is cheaper than an improvement on the $18 bid, sources at Sears Holdings say.

What happens next — how Sears will beat back Wal-Mart and a planned Canadian invasion by archrival Lowe's Cos. Inc. — is the subject of enormous debate in retail circles.

Pershing Square pushes the idea of a merger with the troubled Bay and Zellers chains, which were recently taken private by American investor Jerry Zucker. An investment banker who has been through the books of both the Bay and Sears Canada says that while there's no point in putting the chains together, “once everything is private, you're going to see all sorts of wheeling and dealing with the Bay and Sears stores. You'll see Loblaws buy 25 locations, Shoppers, Canadian Tire, even Wal-Mart will buy a few.”

The investors who did so well with Sears Canada as a public company say it now makes business sense to say goodbye. Natcan's Mr. Chartrand says: “The next step has to be as a private company. Do that, and you can better deploy capital, you can combine the two companies' purchasing for more clout with suppliers, and combine merchandising. But it has to be private.”

SSLL

May 9, 2006, 9:21 PM

From: http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1146779411630&call_pageid=968350072197&col=969048863851
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Loblaw eyes hungry condo dwellers
May open smaller stores downtown Long restructuring
nearing an end
May 5, 2006. 06:52 AM
DANA FLAVELLE
BUSINESS REPORTER

Canada's biggest supermarket chain says it wants to open more mid-sized conventional grocery stores in downtown Toronto to serve the booming condominium market.
But Loblaw Cos. Ltd. said it must first strike more deals with its unions, similar to the ones it got for its Ontario superstores, to remain competitive with non-union rivals.
The company, which reported another quarter of soft sales and earnings yesterday, also said its general-merchandise business continues to struggle.
First quarter profit fell 1.4 per cent to $140 million, or 51 cents a share, while sales inched up 1.4 per cent to $6.1 billion, the company said.
Loblaw chairman and major shareholder Galen Weston expressed faith in the company, which has been restructuring for four years.
"I'm confident in the strategy that has been embarked upon. Change of this magnitude is not easy and we have had our share of challenges," Weston told shareholders at Loblaw's annual general meeting.
During the period, the company brought its western Canadian "superstore'' concept to Ontario and moved its general-merchandise team from Calgary to Brampton. For the first time, it also outsourced a new warehouse to a third-party supplier.
The resulting disruption has at times left store shelves empty, which in turn hurt Loblaw profit and sales.
Loblaw said its food operations are now back to normal and the general merchandise business will be on track by the end of the second quarter.
"None of us takes pleasure in the impact these challenges have had on sales, earnings and share price performance," said Loblaw president John Lederer.
"We believe our performance will stabilize by the end of the second quarter ... and earnings will improve during the balance of the year," he added.
Loblaw's share price, already down 24.8 per cent this year, shed another 9 cents to close at $55.51 on the Toronto Stock Exchange yesterday.
The company said it plans to continue opening more superstores, which compete with Wal-Mart on price and selection. But Weston cautioned the era of the superstore may be coming to a close "at least in terms of the rapid growth we see right now." Loblaw operates 80 such stores, which carry both food and household goods, including clothing and furniture, mainly in suburban centres.
Those stores face increased competition as Wal-Mart adds the full assortment of fresh produce and meat to its Canadian stores later this year.
That challenge may be one reason why Loblaw is now looking at smaller, more convenient stores to serve busy urban consumers. Such stores would be roughly half the size of the superstores and carry mainly food.
Loblaw already has two locations picked out for downtown Toronto and would add more if they were successful, Weston said.
Sites include the former Maple Leaf Gardens arena on Carlton St. and another near Bathurst St. and Lakeshore Blvd. W.
Loblaw is also trying to reach busy urban shoppers by placing some of its President's Choice products in gas station convenience stores.
The company may also build some bigger No Frills discount stores in rural areas.
Sales at stores open more than a year declined 2.5 per cent, a trend that Lederer said reflected consumers' growing preference for shopping across several stores.
Loblaw may be cannibalizing same-store sales as it replaces older stores with larger superstores, said John Chamberlain, an analyst with Dominion Bond Rating Services Ltd.
Chamberlain said the warehouse restructuring was the right thing to do, given the Wal-Mart challenge.

SSLL

May 9, 2006, 9:23 PM

From: http://www.canada.com/nationalpost/financialpost/story.html?id=45d1350f-927c-4f9f-9833-4baafde62ab4&k=67033
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Loblaw girds for battle
Facing Wal-Mart threat: Breakneck capital expansion chips at Q1 profit

Hollie Shaw
Financial Post
Friday, May 05, 2006

Loblaw president John Lederer vowed earnings will start to improve in the third quarter.
The "creative destruction and reinvention" of the old Loblaw Cos. was necessary for the survival of Canada's leading grocery chain in an era of exploding retail square footage, company president John Lederer said yesterday -- particularly from foreign, "non-union" competitors.

"We are changing the company from what it was to what it can be, and what it must be," Mr. Lederer told shareholders at the company's annual meeting in Toronto.

Mr. Lederer and company chairman Galen Weston defended the breakneck expansion of Loblaw's large general merchandise warehouses into eastern Canada, which comes as the non-unionized Wal-Mart Canada Corp. is set to open its first Canadian grocery superstores in Ontario later this year.

At the same time, some shareholders questioned whether the large-format Loblaw stores -- which incorporate food, an array of services, pharmacy, clothing, toys, electronics, housewares, and selected furniture and appliances -- were convenient enough for consumers in urban areas.

"I'm wondering if your whole concept of bigger and bigger is always better" mused one shareholder who said he frequents Dominion, competitor Metro Inc.'s smaller store, when he needs "to get in and out quickly."

Mr. Lederer said Loblaw is trying to appeal to all segments of the consumer market by offering its wares in multiple store formats: discount stores, conventional food-focused stores, larger food stores with some general merchandise and services and its superstores. "The consumer today is cross-shopping," he said. "They are always looking for value ... that then augers right for a multi-format business."

Loblaw has increased its net retail square footage by 5.4% in the last year, or 2.5 million square feet, opening 60 new stores and closing 46.

Mr. Lederer acknowledged there is room for Loblaw to open "smaller stores with great value" in urban markets such as Toronto, but would only do so if the cost structure made sense, and added Loblaw is working with its unions right now to see whether such stores are feasible.

Loblaw operates at a competitive disadvantage to Wal-Mart in terms of labour costs, as the majority of Loblaw stores are unionized. The retailer has successfully negotiated to pay employees at its 80 superstores lower wages than at its traditional stores.

The company is also running a test market with Imperial Oil Ltd., Mr. Lederer revealed, selling a selection of its popular President's Choice house brand at five of the company's gas bars.

The retailer's torrid capital expansion has come at a cost: Net earnings were down 23% in 2005, and Loblaw reported yesterday earnings sank another 1.4% in the first quarter to $140-million, or 51 cents a share, from $142-million (52 cents) in the same period a year earlier. Sales climbed 1.5% to $6.15-billion.

Sales at stores open for more than a year, an important industry metric known as same-store sales, fell 2.5%.

The earnings were in line with analyst expectations, but some analysts pointed to the same-store sales dip and questioned whether Loblaw's superstores were cannibalizing business at its conventional outlets.

Loblaw, which has slashed costs and reconfigured its supply chain to compete more effectively with Wal-Mart, has seen its sales and profits dip in the past year due to problems consolidating its warehousing operations, resulting in out-of-stock store shelves, particularly in health and beauty items.

Mr. Lederer vowed earnings will begin to improve in the third quarter.

But analysts say it could take a while before Loblaw's strategy begins to bear fruit.

"It will take at least another several quarters, possibly a year, before the company realizes any meaningful productivity improvements," Jim Durran, retail analyst at National Bank Financial, wrote in a recent note to clients.

SSLL

May 9, 2006, 9:25 PM

From: http://www.canada.com/nationalpost/financialpost/story.html?id=0922d022-482b-4412-ae1e-e500bf04754f
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U.S. bread chain eyes Canada

Peter Koven, Financial Post
Published: Saturday, May 06, 2006
The popular U.S. restaurant chain Panera Bread Co. has unveiled plans to enter the Canadian market in 2007, adding another competitor to an already crowded sector.
Panera is a quick-serve chain of so-called "bakery-cafes" based in Richmond Heights, Mo. For people sick of burgers and fries, the company offers premium sandwiches like asiago roast beef or portobello & mozzarella. It also offers a variety of soups, salads and sweets.
Panera is remaining close-mouthed about its Canadian expansion plans, only saying the first restaurant will be open next year. The company will not reveal what markets it plans to enter, or how many restaurants it eventually hopes to open.
"One of the things we've found in the last five to 10 years is this concept translates well regardless of geographic boundaries," said spokesman Mark Crowley. "This is something people are responding well to. It has led us to believe there could be an opportunity in an international market like Canada."
Panera owns and operates almost 900 stores in 36 U.S. states, more than 500 of which are franchised. It is planning to open another 150 to 160 this year. The stores tend to be located in suburban areas, but the company does have a growing urban presence as well.
But it's coming to a market that's already rife with competition. According to analyst Robert Silgardo at Dundee Securities Corp., the barriers to entry in Canada aren't especially strong, but being successful is another matter.
"Your average sandwich is already costing $8. To come in and charge $10, it would be hard to do, especially with gas costing $1 a litre," he said.
While Panera has positioned itself as a higher-end and healthier fast-food option, Mr. Silgardo said it's still going to face tough competition from the likes of McDonald's, Tim Hortons, Subway and Quizno's. Quizno's also marketed itself as a more premium brand when it entered Canada, but recently cut its prices.
"They're all trying to compete for that lunch dollar. McDonald's has their special deals, Wendy's has salads. If they're trying to be more premium than Quizno's, it would be tough. It depends how good they are at marketing," he said.
Location could be a problem as well. According to Mr. Silgardo, it is becoming increasingly hard to find good locations in Ontario. He said Panera might have an easier time in Alberta, where there is no provincial sales tax and more wealth.

SteelTown

May 9, 2006, 10:16 PM

$100 million to be injected into Centre Mall redevelopment

TORONTO (May 9, 2006): The CPP Investment Board and Osmington Inc. today announced it will invest $100 million in the redevelopment of Centre Mall in Hamilton, Ontario. Co-owner and operating partner Osmington Inc. will be leading the redevelopment plans for the shopping centre. Construction will begin in this fall and will be completed in phases by fall 2008.

Centre Mall is one of five shopping centres purchased jointly by the CPP Investment Board and Osmington Inc. in 2003 and was among the first real estate investments made by the CPP Investment Board.

It first opened in 1955 as an open-air mall. Centre Mall contains 750,000 square feet and is located at Barton Street and Kenilworth Avenue, near the city's downtown and serves a large regional area. The redevelopment plans call for the conversion of the mall into an 800,000 sq.ft. power centre format. Details on the redevelopment will be finalized in the summer of 2006, with major tenant announcements to follow.

According to Osmington Inc., the major redevelopment of this long-standing property in such a key location in downtown Hamilton will return the property to prominence as one of Hamilton's premier shopping destinations.

"Real estate offers attractive risk-adjusted returns that are a good match for the inflation-indexed benefits provided by the CPP," said Graeme Eadie, Vice-President Real Estate Investments, CPP Investment Board. "Shopping centres are a favourable investment as they help balance our Canadian real estate portfolio."

Together, CPP Investment Board and Osmington Inc. own 9 shopping centres across Canada.

The CPP fund's $4 billion real estate portfolio contains mostly office and retail commercial properties located in major centres across Canada including Vancouver, Calgary, Edmonton, London, Hamilton, Toronto, Ottawa, Montreal, Sherbrooke and Quebec City.

As at December 31, 2005, the CPP fund held $92.5 billion in assets including government bonds, publicly traded stocks, private equities, inflation-linked bonds, infrastructure and real estate.

According to the Chief Actuary of Canada, the CPP fund is expected to grow to $246 billion within the next decade and will be among the world's largest institutional investors.

SSLL

May 13, 2006, 1:50 PM

From: http://www.theglobeandmail.com/servlet/story/RTGAM.20060511.whbcc0511/BNStory/Business/home
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Zucker's vision for HBC: Think Macy's
MARINA STRAUSS
From Friday's Globe and Mail
Jerry Zucker offered suppliers his vision of Hudson's Bay Co. this week — and a lot of it looks like Macy's.

The new U.S. owner wants to make the Bay a more distinctive department store retailer, even replacing plastic shopping bags with paper bags and tissue paper. He wants to stock the stores with brands that aren't available at HBC's Zellers or Home Outfitters — or anywhere else — and he's already adding more staff on the sales floor.

He envisages a chain that emulates the venerable Macy's in the U.S., a destination for exclusive products and attentive service.

In addition, he is stocking HBC stores with merchandise geared to neighbouring ethnic communities.

These are some of the points that surfaced at an invitation-only, $250-a-head meeting for HBC suppliers Mr. Zucker and his executives hosted at the Mississauga Convention Centre on Wednesday, according to some vendors who attended.

They described the low-profile U.S. businessman as charming and engaging. He started the session by insisting that the information remain confidential, reminding the 1,500 or so attendees that he is a very private person and his company is no longer public. He asked anyone with a tape recorder to turn it off, and “stopped once to make sure no one was recording,” one source said.

“He came across as very sincere,” said another source — who, like others, asked not to be named. “He knows how to talk to people.... He's very approachable.”

Another source added: “He seemed upbeat.”

In addresses by Mr. Zucker and his team, the suppliers found out that he considers ethnic communities a growth opportunity for HBC and wants to stock each store with goods that cater to the local residents.

He himself immigrated to the United States from Israel, and understands newcomers' difficulties in trying to shop in unfamiliar territory.

An HBC store in Brampton is already stocking more food and other merchandise that will appeal to residents in the surrounding neighbourhood, which includes many people from India and Pakistan.

At another store, a sales woman at the fragrance counter is making a point of speaking Chinese to customers of that background — producing some record sales, the meeting was told.

Mr. Zucker has other items on his to-do list. He plans to transform HBC's Western Canadian discounter, Fields, into a national dollar-store-like chain, while expanding Home Outfitters and the fledgling Designer Depot.

He wants HBC suppliers to take more responsibility, and more risk, for how their products fare in the stores and plans to hook them up to computer systems to feed them detailed data on their sales at each outlet. Taking a page from the books of many large U.S. retailers, he expects suppliers to manage their inventory, taking back unsold merchandise after a certain period, and replenishing shelves when needed.

Store managers should also have more power to order products as they see fit.

Mr. Zucker believes spending on television and newspaper ads should be reduced in favour of direct marketing, taking advantage of the rich database of customer information gleaned by the company's loyalty program.

He even suggested that HBC charge higher prices on goods in remote areas to make up for high costs of shipping the goods there, one supplier said.

He also provided reassuring news for anxious suppliers about getting credit coverage for goods they ship to HBC, telling them to contact two of the banks that helped finance his $1.1-billion acquisition of HBC earlier this year. They have divisions that provide credit coverage for suppliers.

Several suppliers complained that Mr. Zucker had charged $250 a person for up to four people from each company to attend the conference. In addition, he charged $50 for a store tour and $75 for any other company members to show up at the reception following the meeting. It lasted about 2½ hours, with a band, open bar and hors d'oeuvres afterward, attendees said.

“How can they have the gall to have a vendors' conference and charge the vendors for attending?” one supplier asked rhetorically before the meeting. “This at a time when vendors are nervous and looking for reassurance.”