Canadian Retail Thread

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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]

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]

^Chinook too, no?

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

[theUSUALsuspect]

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

[SteelTown]

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.

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From: http://www.canada.com/national/natio...5-2fd58cee96b4
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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.

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From: http://www.theglobeandmail.com/servl...Story/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.

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From: http://www.thestar.com/NASApp/cs/Con...l=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.

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From: http://www.thestar.com/NASApp/cs/Con...d=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.

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From: http://www.theglobeandmail.com/servl.../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]

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/Con...=1144273817088

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From: http://www.thestar.com/NASApp/cs/Con...l=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.”

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From: http://www.canada.com/nationalpost/f...50fb99&k=92006
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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]

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]

Originally Posted by SteelTown

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.

What's gonna happen to poor Lime Ridge then?

It's not like Grand and Toy can just go in there and fill up the equal of an H&M type space.

[SteelTown]

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]

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]

From: http://www.thestar.com/NASApp/cs/Con...l=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]

From: http://www.thestar.com/NASApp/cs/Con...l=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]

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.