Canadian Retail Thread

[neilson]

^Would you want Linens 'N Things or Bed, Bath, and Beyond to buy Home Outfitters?

[MikeTTG]

^^Yes, please, HURRY!

[MTL-514]

^ funny!

[SSLL]

A NEW OWNER FOR HUDSON'S BAY: STRATEGY
Note to Zucker: Five things you should know
Life at HBC is more crazed than when our grandfathers shopped there, GORDON PITTS writes
By GORDON PITTS
Friday, January 27, 2006 Page B5

If Jerry Zucker takes ownership of Hudson Bay Co., he will venture into the tumultuous world of retailing, where today's triumphant business model becomes next year's road kill.

That's reflected in the staggering mortality rate of once-successful store brands-- names like Eaton's, Woodward's, Woolworth, Kresge--and the abject vulnerability of formerly dominant concepts, such as the mid-range department store exemplified by the Bay.

Even Loblaw Cos. Ltd., considered Canada's most savvy retailer, has stumbled as it frantically refits its supply lines for a looming Wal-Mart Stores Inc. threat in food retailing.

"It's a topsy-turvy world," says John Williams, a Toronto retail consultant, who points his finger at the mercurial consumer as primary agent of this change.

Michael Silverstein, a Chicago-based retail consultant and senior vice-president with Boston Consulting Group, says retailing is the most Darwinian of all businesses, propelled by an ever-changing cast of entrepreneurs with energy and drive.

There is one major shift that totally re-orders the retail industry in every decade of modern history, he points out. The main premise to understand is that the leading concepts today will surely stumble tomorrow, Mr. Silverstein said in an e-mail message.

With that in mind, Mr. Zucker must become familiar with several facts of life:

The mid-market is still collapsing

"There is no reason to shop in the middle," says Mr. Williams, who heads J..C Williams Group. Consumers who find a product to their liking at a mid-range store can always go to Zellers Inc., Costco Wholesale Corp. or Wal-Mart to buy the same item at a reduced price.

Of course, some consumers find the relatively tacky environment and pedestrian service of the discounter retailers is an affront to their sense of taste and self-image. In that case, they can always move up to the creature comforts of luxury retailing with its intense customer service --as long as they are willing to meet the price. All of which leaves the mid-market vendor with an eroding group of consumers.

This is not your grandfather's store

The department store is not dead, but it is being reshaped. In some cases, "it is becoming a collection of specialty stores with the same staffing model as a specialty store," says Mr. Silverstein, who views Bloomingdales of New York and Harvey Nichols of London as models for many reshaped players.

"The ones that will die are chasing cost reduction and inventory turn," says Mr. Silverstein, who sees no relaxation by Wal-Mart as a force in the discount end of the sector.

Toronto-area retail consultant Richard Talbot points out that once stumbling department store operators, such as Nordstrom Inc., based in the U.S. Northwest, and Selfridge's of London, have revived through new concepts and the exercise of "real entrepreneurial flair." He says the Bay had that opportunity with the demise of Eaton's but chose a more down-market approach.

The rise of instant product delivery

Mr. Silverstein likes the way a new wave of branded manufacturers have been able to use their own retail networks as detection systems for consumer trends and vehicles for instant product delivery.

"When Apple launched the Nano [iPod], it was able to announce it on Monday and have it on sale in over 300 stores with dramatic merchandising on Tuesday," he says. "It was a blockbuster success."

He notes that the U.S. manufacturer of Coach leather goods also constitutes one of the most profitable retailing successes. Similarly, Zara, the Spanish fashion retailer, supports its stores with a tightly connected manufacturing and supply chain capability.

The Internet as great influencer

On-line sales are rising, Mr. Williams says, but they still only account for a tiny percentage of retail shopping in Canada. But the Internet is making a huge impact in specific areas, such as books and travel, and is influencing 20 per cent of all retail sales.

People use it to research and compare product specifications, prices and quality ratings. Then they go to the retailer of choice to kick the tires and clinch the deal, Mr. Williams says. It does not show up as an Internet retail transaction, but all the preparation is done on-line.

It's also contributing to the collapse of the middle and the pressure on price. "Consumers can really learn about goods and pick exactly what they want," Mr. Silverstein says. "They can then 'force' the retailers to compete on price."

Buzz is big

Increasingly mobile, media-saturated consumers are alert to all the latest global trends, and that is shaping their shopping patterns.

Mr. Talbot, who heads Talbot Consultants International Inc., says Hudson Bay's discount brand, Zellers, has probably run its course. But if it were converted to Target, the popular U.S. discounter with the style cachet, sales would soar overnight because Canadian consumers are already well informed about the Target model. Similarly, Canadians were primed for Wal-Mart's price-slashing formula when it moved into Canada 12 years ago.

All this transborder buzz accelerates the pace of change, as retail formats shift and store banners fall in and out of favour. As brands become more transient, the stores' real estate emerges as the deal maker for retail companies. But, no doubt, Mr. Zucker already knows that.

[SSLL]

Retailers welcome renovation
Station's stores pine for customers

Sprucing up `shabby' terminus may help
Feb. 3, 2006. 01:00 AM
HAROLD LEVY
STAFF REPORTER

Plans to redevelop Union Station were met with mixed feelings by the owners of some of the station's smaller stores.
Ching Mei, owner of The General Store on the departures level, welcomed the massive renovations but feels much more downtown development is required.
"It is not enough to improve Union Station," Ching, who at 18 years believes she is the longest-standing merchant at Union Station. "The whole area around it has to be made more conducive for retail stores and there has to be adequate parking."
But Ching hopes the renovation will bring more business to the stores in Union Station which are often stagnant between the morning and evening rush hours.
"It could use a boost," she said.
Nancy, owner of a small bakery franchise in the GO Corridor area of Union Station, described her feelings about the renovation as "fifty-fifty."
"It's good for regular people and for Toronto because Toronto is open to the world and that is good," said Nancy, who has a 1 1/2-year lease. "But for us, for the business ... we're nervous.
"Change may not be good for the business."
It was good news to Jane Kang who works in a small cosmetics store in the concourse.
"This place is shabby," she said. "It definitely needs to be cleaned up.
"Look at the marble," she said, pointing toward the corridor. "I'm pretty sure it was white when they put it in. Now, it is brown."
Kang pointed out major problems for everyday users of the station, such as elevators that are so inaccessible that people take the ramps instead, poor access to the building and a confusing layout.
"I get people coming in all the time to ask me where to go," she said.
Mayor David Miller also welcomes the proposed overhaul.
"My hopes are that, first of all, the retail areas that are there are significantly improved. It will actually be a destination," he told reporters yesterday.
It was also good news to Qin Bin who operates a newsstand in the concourse area and has dreams of the station being transformed into an "enchanting" retail and transportation centre.
"I hope it can be made like a station fit for a modern city," said Qin, who recently signed a four-year lease.
"This could be huge and I will benefit."
with files from catherine porter

[SSLL]

Roots reaches out to grow
The Canadian outfitter of the U.S. Olympic team has a new beret and other gear, plus a sales deal with Target

By Mary Ellen Podmolik
Special to the Tribune
Published February 4, 2006

Four years ago, Roots Canada Ltd. struck gold at the Winter Olympics with a navy and red beret.

The $19.95 hat worn by the U.S. team became the must-have item from the Salt Lake City games. Fans lined up outside Utah stores for hours in hopes of nabbing one. Others, who saw the berets on television being worn by Olympians, bought them through Web sites or plunked down up to $50 to nab one via eBay. Altogether, the Toronto-based Roots sold more than 1 million Team U.S.A. berets during and after the games.

It was an extraordinary break. No retailer could ever have hoped to achieve that kind of recognition through traditional marketing.

Four years later, Roots executives are wondering if lightning can strike twice.

Heading into the 2006 Olympics in Torino, Italy, which kick off Friday, Roots again will outfit the U.S. team during the opening and closing ceremonies. The beret is back, too, albeit with a different color scheme, style and a suggested price tag of $24.99.

This time Roots is being slightly more aggressive. Athletes and consumers will get a choice of wearing solid-color berets that are either red, white or blue. There also are shirts, pants, sweaters and color-blocked vests, all featuring a look that Roots co-founder Michael Budman calls "retro futurism." They will be sold in Italy and through Roots and the Internet, but they also will be available in Target stores.

Success isn't necessarily a sure thing.

"When opening day comes, when judgment day comes, hopefully the 70 or 85 million Americans that are watching will support the team," Budman said. "What happened in '02, something like that happens once in a lifetime. The mood in the country was much different than it is today. America was more unified."

Factors that helped propel sales four years ago--the then-recent events of Sept. 11, 2001, and the staging of the Olympics in the U.S.--no longer apply. Also, the firm is sharing the spotlight as an official U.S. team outfitter with Nike Inc., which for the first time will dress athletes for the medals stands.

So Roots, which has only five U.S. stores but would eventually like to have 40, is looking for maximum exposure. It signed speed-skating gold medalist Apolo Ohno for its ads. It inked deals with Internet retailers to sell key items like the berets. And efforts to find a U.S. distributor for the berets led to an agreement that is now sending most, but not all, of the 12-piece Olympic collection to Target's 1,400 stores in time for the opening ceremonies.

"It's very trendy," Target spokeswoman Aimee Sands said. "That athletic look has been popular and we expect it to do well."

Consumers who favor either Nike's or Roots' duds are buying into a trend that is helping fuel one of the biggest areas of growth in retailing right now: the sale of active sportswear to be worn on the street, not just in the gym.

Last year, sales of women's activewear rose 7.9 percent over 2004's level, compared to a 2.7 percent gain for all of women's apparel, according to the NPD Group. Sales of men's active sportswear grew by 7.7 percent during the same time period, compared with a 5 percent increase for all of men's clothing.

Jane Hali, a retail consultant at New York-based Coleman Research Group, thinks the beret's popularity was cemented after athletes wore it while carrying a tattered U.S. flag from the World Trade Center during opening ceremonies.

This time around, she predicts a different best seller. "The cap will sell more," she said. "It's Americana."

Despite increased visibility of its brand four years ago, Roots did not open additional stores in the U.S. The privately held company points to the large financial commitment required and its continued quest for the right partner to share expenses.

So while Roots operates more than 125 locations in Canada, it has not expanded across the border. "That's the natural inclination, to focus on your own backyard," Roots spokesman Robert Sarner said. "It's not a casual endeavor to open stores in major cities in the United States."

U.S. retailers like Home Depot, Sears, Costco and Gap have crossed the Canadian border, but Roots may put more stock in the history of another Toronto-based company, Dylex Ltd., once one of Canada's largest retailers with more than 600 stores in its home country. Dylex's entry in the U.S. market, made through the purchase of existing chains Foxmoor Casuals and Brooks Fashions, faltered; divisions were sold and Dylex was put into receivership in 2001.

"Canada is a very teeny country," said Howard Davidowitz, chairman of Davidowitz & Associates, a New York-based retail consultancy and investment banking firm.

"The United States is like a different world to negotiate leases in. We've got lifestyle centers, urban centers, malls. If you come to the U.S. and you're a Canadian company, you've got to get quite a bit of expertise or you get destroyed."

[malek]

Puma Acquires Montreal-Base Licensee ATAadvertisementRelated information

All Associated Press News

FRANKFURT, Germany (AP) - German apparel maker Puma AG said Tuesday it acquired ATA Inc., a Canadian company that licenses and distributes its footwear, clothing and accessories.

Terms of the detail were not disclosed, but Herzogenaurach-based Puma said it would help it expand its products in Canada.

"As a licensee and distributor, ATA Inc. has exceeded our expectations and has grown to be a valued and respected partner," said Puma Chairman and CEO Jochen Zeitz. "This business venture builds upon the success demonstrated by Puma North America and will lead to new and exciting opportunities in Canada."

Shares of Puma were up a quarter of a percent to euro266.69 (US$319.52) in Frankfurt trading.

[MTL-514]

Trendy to the core
Banana Republic, H&M said to be close to finding downtown locations
EVA FRIEDE, The Gazette
Published: Tuesday, February 07, 2006

Downtown appears headed for a retail rush: after H&M opens at least three suburban stores this spring, it will most likely set up shop on Ste. Catherine St. W.

One possibility for a location is the Bank of Nova Scotia branch on Ste. Catherine just west of Peel St. The branch is closing April 7.

Sources say both H&M and Banana Republic are closing in on downtown locations.

H&M, the Swedish fast fashion retailer, has revealed plans to open in March or April in Rockland Centre, Galeries d'Anjou and Fairview-Pointe Claire. But recruiters are already hiring for a Carrefour Laval store, although company spokesperson Christian Bagnoud said plans for that store are not final.

Bagnoud said he is not aware of leasing details in the downtown core, but sources say the mega-giant company - with more than 1,100 stores worldwide - is days away from signing a deal.

H&M, established in 1947, is known for its cheap, trendy fashion and for signing on guest designers Karl Lagerfeld and Stella McCartney for one-time collections.

The downtown store would probably be more than 10,000 square feet in size, Bagnoud said. The Fairview store, the first slated to open, will be 16,000 square feet.

Banana, a division of Gap, made its entry into Montreal last August with four suburban stores more than a decade after opening in Toronto. A representative of Gap in Canada would not confirm details of Banana's hunt for a downtown location.

Another entry to the retail scene will be Aritzia, an upscale Vancouver-based retailer with about 20 shops across Canada.

Aritzia carries trendy denim brands like Fidelity, Habitual and Seven for all Mankind, as well as Juicy Couture, Ella Moss and its own brands.

Marketing manager Sally Parrott said Aritzia was looking at a fall opening, on Ste. Catherine St. or possibly in a mall.

© The Gazette (Montreal) 2006

[malek]

I just read (sorry its in French) that Oakley will open its second Canadian O-Store in downtown Montréal on st-catherine st. between Drummond and Montagne. It'll be the largest Canadian store with 3200 sqft, almost twice the size of its Toronto location (1700 sqft).

[MTL-514]

wow - lots of new stuff coming to St Catherine Street West

[malek]

I was getting worried after seeing some stores being closed... I guess it was their landlords that kicked them out for better (i.e. fatter) tennants.

[SSLL]

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

[MTL-514]

it's often the case, with many stores and restaurants

[malek]

they need to adapt their marketing and services to a different market... but 10 years is a bit too long for that ...

[miketoronto]

I was busy showing my aussie friend around so now I have time to comment on this thread as someone mentioned I did not comment yet.

All I have to say is it is disgusting how our oldest retailer and company is now controlled by American's, along with a bunch of other companies in one week.

In one week Canada has lost Hudson's Bay Company, Fairmont Hotels, and Dofasco Steel to foreign ownership.

This is very risky business for Canada to be letting everything in our country be foreign owned. As they say in my dad's town in Italy, "you don't have a country anymore if nothing is owned or made in your country".

Anyway we will have to see what happens, but I think it is a sad day in this country that so many companies in one weeks time have just been taken over.

HBC is a worrying one, as ou can bet American's are going to do something nasty with the downtown stores to make them lost profit and close them down. And if not that, then they will either turn them into such high end places us normal residents won't be able to shop there, or downsize them.

I already noticed THE BAY sign is dark on the top of the Hudson's Bay Centre in downtown Toronto.

Anyway sad sad sad week for Canada. Our legendary department store is now owned by city hating Americans. Our legendary railway hotels which had to give up the CP NAME, are now owned by a prince who rules a country that hates everything western. And now our own steel companies are not even Canadian.

Not good for Canada, and maybe we need drastic takeovers like this to show how Canada is in such bad shape when it comes to protecting our country and our own companies and products.

I say its time to shut down free trade and bring back the rules of foreign ownership not being allowed at such high levels.

Anyway let these companies keep buying us out. I will just spend less money at them. I was in Montreal last week, and I bought a whole new set of clothing from SIMONS, a nice Canadian owned company.

We should be ashamed as Canadian's that there is almost no stores in our malls owned by Canadians or Canadian icons anymore.

And the same goes for companies. We should be ashmed CP HOTELS is no longer, MOLSONS is no longer, DOFASCO is no longer.
These are companies with proud histories and links to Canadians. Now they are nothing but foreign owned by people who could not give a crap about Canada.

Then we wonder why people are not visiting Canada in record numbers anymore. Could it be because when people cross the border all they see is the same stores, restaurants, and companies they have in their own country? Whats the point of going somewhere different when its all the same.

Even my mom who is American born thinks its a sad day for Canada and is very upset HBC was sold to American's.

Canada was much better off in the 80's. I remember a Canada back then with more idenity then now.

But it seems Canada does not care anymore. Lets just keep selling off our country. Maybe the next step will be the selling off of Ontario to a prince in some other land.

[SSLL]

Apple Stores for downtown Toronto and Carrefour Laval:
http://thinksecret.com/news/0602briefly.html

[SSLL]

Canada firm to buy Sleep America

Erica Sagon
The Arizona Republic
Feb. 16, 2006 12:00 AM
Valley mattress retailer Sleep America is getting into bed with Sleep Country Canada.

The Toronto company said it intends to buy Sleep America's chain of 32 stores in the Phoenix area and Tucson for an undisclosed price. The deal is expected to be final in March.

Sleep America co-founders Debbie and Len Gaby will keep their posts as president and chief executive officer, respectively, and no immediate changes are planned for the Sleep America brand.

Len Gaby said he is looking to expand Sleep America outside Arizona in "a couple of years, at least." For now, the Valley's population growth is keeping the firm busy, he said. Six or seven Sleep America stores are set to open in Arizona.

"I wouldn't say we're maxed out here yet," he said. "We're looking at locations that literally weren't on the map a few years ago."

He added that Sleep Country Canada's growth plans were consistent with his own and that the takeover was a natural fit.

The Gabys opened Sleep America in 1997 and made the name well-known in the Valley through ads touting the company's customer-satisfaction guarantee.

Sleep Country Canada Income Fund, the parent company of Sleep Country Canada, has 116 stores and 800 employees under Sleep Country Canada and Dormez-Vouz brands. Sleep Country Canada executives were not available for comment.

[SSLL]

Giant Tiger store has me purring
Feb. 18, 2006. 01:00 AM
MARION KANE

My daughter Ruthie was a mere pup — about 6 years old, as I recall — when her dad returned from a shopping spree in search of a party dress with this burning question: "Where did she learn how to shop?"
Apparently, he was astounded to watch my offspring walk into the first store, immediately approach a rack of clothes and begin effortlessly flicking the hangers with one hand — a well-known selection technique — as if this were second nature.
"Guilty on all counts," was my reply, knowing full well that Ruthie had learned the art and wondrous pleasures of shopping under the tutelage of a skilled expert — yours truly.
Many of my well-honed purchasing pointers were gleaned from my mother. Among them: always eat lunch, not dinner, in a posh restaurant; visit high-end stores (the likes of Holt Renfrew and, in her case, Liberty of London) only during sale season and always thoroughly scour the reduced rack for expensive lingerie.
This canny plan has given me a magpie eye (I can spot a designer vintage coat at a Goodwill store from across the room) and a passion for bargain-hunting.
All of which leads to today's topic: the wondrously eclectic retail emporium that's a famous landmark in my new home of Stratford: Giant Tiger.
I'd been here only a couple of weeks when news of its many attractions reached my ears — and my mouth.
At a jolly wine and dessert gathering in late summer, a guest brought a delicious lattice-crowned cherry pie made at the well-known eatery Anna Mae's in nearby Millbank. The pie's source, she freely confessed, was Giant Tiger, where they get daily deliveries of Dutch apple, lemon meringue, raspberry custard and other tasty versions priced at less than $7 a pop.
Soon, I became a regular at this clean, brightly lit store, spurred on by friends' tales of $5 terry cloth bathrobes from a defunct cruise line, brand-name bathing suits for $15 and delectably creamy fudge made in Quebec by Ste. Julie and priced at under $3 for 240 grams.
Seated on a swivel chair in Giant Tiger's second-floor office, where we have a bird's eye view of the entire store, I chat with owners Jack and Pauline Book.
With many years in the retail biz, they bought this outlet as a franchise in 1996 and quickly doubled the space to comprise its current 20,000 square feet.
Giant Tiger is a family-owned Canadian chain with 159 stores located mostly in Ontario and Quebec but expanding rapidly into other provinces. It began with its three-storey landmark outlet in downtown Ottawa 40 years ago and quickly spread, mainly to rural areas. This spring, the GTA will get outlets in Mississauga and Brampton with plans for more.
"We try to have Canadian products," Jack explains, "but not everything we sell is Canadian." Main attractions are fashion and food. "We constantly have new arrivals," he continues, noting there are customers who come daily. "People are on the hunt for treasures," adds Pauline. "You may come in and find we've got a popular item at a very good price."
Yes, I have the spectacular velvet skirt, black beaded top, small leopard suitcase, frozen shrimp and chicken breasts, microfibre cleaning cloths, Mortimer's tourtiere, pear-flavoured white tea, Melitta coffee and crunchy Vlasic dill pickles to prove she's right.
"We cater to a large German and Dutch population," Jack explains as we cruise an aisle rife with Spekulaas cookies, Dr. Oetker pudding mixes and Zwieback rusks. Cadbury's chocolate fingers made in the U.K. and terrific Waterbridge jams from Denmark are other top-notch imports.
Seeking a sugar fix, I recently picked up a package of King Dons made by Hostess. Surprisingly, they are yummy: small dark chocolate mini-cakes covered in dark chocolate with white "cream" oozing from the middle.
Here are two recipes made with items from Giant Tiger, my favourite new shopping venue.
Tuna Bean Salad
Inspired by a Tuscan salad of tuna, cannellini beans, tomatoes and onion, this makes a nutritious, tasty sandwich filling for pita pockets. Use President's Choice Organic Bean Medley but red or white kidney, black-eyed peas, cannellini beans or chick-peas are fine, too. Omit olives, dried tomatoes, if desired.
170g can chunk or solid white tuna, drained
19-oz (540-mL) can beans, drained, rinsed
1-1/2 cups halved cherry or whole grape tomatoes
1/4 cup pitted black olives, quartered
1/4 cup sundried tomatoes packed in oil, drained, sliced
1/2 red onion, peeled, quartered, thinly sliced
1/3 cup extra-virgin olive oil
2 tbsp red wine vinegar
1/2 tsp dijon mustard
Salt + freshly ground black pepper to taste
1/4 cup chopped fresh parsley
In serving bowl, break up tuna with fork. Add beans, tomatoes, olives, tomatoes and onion. Stir gently to combine.
In small bowl, whisk together oil, vinegar and mustard. Add to salad; stir gently to combine. Taste; add salt and/or pepper if necessary. Garnish with parsley.
Makes about 4 to 6 servings.
Caramelized Pineapple
Inspired by a dessert prepared by students at Northwestern Secondary School right here in Stratford and their clever chef/teacher Paul Finkelstein. They used fresh pineapple served with panna cotta and coconut ice cream. Add a little coconut milk to sauce, if desired.
19-oz (540 mL) can sliced pineapple
1 tbsp butter
3 tbsp granulated sugar
1 tbsp lemon juice
1/4 cup golden or dark rum
2 tbsp reserved pineapple juice
1 tsp vanilla extract
Lemon juice to taste, optional
Drain pineapple well, reserving 2 tablespoons for sauce and remainder for fruit salad, smoothies, etc. Pat pineapple dry with paper towel.
Preheat oven broiler.
In large heavy skillet, melt butter and sugar over medium heat; stir in lemon juice and cook 2 to 3 minutes or until golden brown and beginning to caramelize. Add pineapple in single layer; cook about 3 to 4 minutes per side, turning once with tongs. Transfer to wire broiler rack in single layer.
Meanwhile, reduce heat under skillet to medium low; add rum, reserved pineapple juice and vanilla. Cook, stirring and scraping browned bits from skillet, until slightly thickened, about 2 minutes. If too sweet, add a little lemon juice.
Place pineapple under broiler; cook until browned and caramelized, about 5 minutes.
Serve warm drizzled with a little of its sauce with ice cream, crème fraîche or whipped cream.
Makes about 4 to 6 servings.
_________________________
Giant Tiger coming to GTA soon
Feb. 18, 2006. 01:00 AM

Giant Tiger plans to open stores in Mississauga and Brampton this spring.
In Mississauga, a 26,000-square-foot store is set to open March 18 at 3200 Erin Mills Parkway in a former Food Basics location. In Brampton, a 38,000-square-foot store is to open April 1 in the Kingspoint Plaza at 370 Main St. N. (Highway 10) in a former A&P grocery store.
Jeff York, the president of Ottawa-based Giant Tiger Stores Ltd., says the company has had good response to its new stores in Ajax, Newmarket, Bradford, Bolton and Acton. "We have had numerous requests from customers to open more stores in the area," he says.
Giant Tiger, a privately held Canadian company, was established in 1961 in Ottawa's Byward Market and now has 159 locations throughout Ontario, Quebec, Manitoba, Saskatchewan, Alberta and New Brunswick. There are 99 stores in Ontario.

[SSLL]

From: http://www.theglobeandmail.com/servl.../Business/home
___________________________________

Couture by Loblaw
MARINA STRAUSS
RETAILING REPORTER
Grocer Loblaw Cos. Ltd. is poised to launch a low-priced private-label apparel line next month as it races to shore up its product selections and compete against powerful discounter Wal-Mart Canada Corp.

The line is being referred to as Joe Fresh -- Joe after fashion guru Joseph Mimran, who developed the men's and women's wear for Loblaw, and Fresh, referring to styles that are refreshed often and therefore never become outdated. Mr. Mimran is also the architect of the retailer's private-label general merchandise offerings under its familiar President's Choice label.

The apparel rollout is important for the country's largest supermarket chain as it grapples with disappointing financial results and snags in introducing non-grocery items. At the same time, Loblaw is feeling the heat from Mississauga-based Wal-Mart Canada, which is preparing to introduce more food and apparel at larger supercentres in Canada late this year or early next year.

It is a timely strategy for Toronto-based Loblaw, said retail consultant David Howell, president of Associate Marketing International. "It's important that Loblaw do it now. . . . It's a fast race between Wal-Mart and Loblaw."

Loblaw has been racing to build more superstores, expand product selections and cut costs in a bid to take on Wal-Mart. But the grocer's transformation has been bumpy, and Loblaw doesn't expect a turnaround until later this year.

The problems were particularly acute in the non-grocery aisles, as new home products were added to the mix but couldn't make it to store shelves on time because of distribution breakdowns, resulting in missed sales and lower profits.

Now Loblaw is gearing up for its next major launch -- apparel -- as it attempts to emulate popular U.S. discounter Target Corp., industry observers said. Minneapolis-based Target has become a destination retailer for cheap fashions, and is one of the few merchants successful in competing with Wal-Mart.

Wal-Mart, for its part, has beefed up its clothing offerings, partly by adding trendier fashions under the George label. It is aimed at capturing a higher-income, style-conscious shopper, the same one that Loblaw is chasing.

Loblaw is putting finishing touches to its private-label apparel line, which some industry insiders say is being named Joe after its designer, Mr. Mimran, just as George was named after George Davies.

Mr. Mimran does private-label work for Loblaw and Toronto-based Holt Renfrew & Co. Ltd., both headed by billionaire Galen Weston. Mr. Mimran, who declined to comment, is founder of the hip fashion chain Club Monaco.

Loblaw is redesigning some of its superstores to accommodate an expanded apparel section, with fitting rooms and separate cashiers.

Loblaw spokesman Geoffrey Wilson wouldn't comment on the apparel plans, but suggested March 13 should be set aside, and an invitation would be forthcoming. "There are many new and exciting things coming down the pipe."

Wal-Mart spokesman Andrew Pelletier said its George line is performing well in Canada, and will be expanded. "We'll be raising the bar when it comes to apparel because that's what the customer expects."

[SSLL]

From: http://www.theglobeandmail.com/servl.../Business/home
_________________________________

HBC shakeup imminent
MARINA STRAUSS
From Monday's Globe and Mail
If all goes as scheduled, Jerry Zucker will pick up the keys to Hudson's Bay Co. on Friday. He's expected to take a little while to look around the old place, and then get right to work.

There's a lot on his “To Do” list as he takes over the oldest company in Canada. Its core retailing division makes little, if any, money, and has been losing business to nimbler rivals. Its discounter Zellers struggles to compete with the powerful Wal-Mart Canada Corp., while the Bay races to keep up with specialty chains.

HBC is desperately in need of a sharpened image and leaner, more efficient operations.

“Zellers has to do more to be different,” says retailing consultant Walter Loeb in New York, a former member of HBC's board of directors. “In order to make it, you have to take a position against Wal-Mart ... Zellers is key to the future success.”

Mr. Zucker has said he will follow HBC's strategy of closing unprofitable Zellers stores, expanding others and improving customer service and inventory management to ensure in-demand goods are on store shelves. Asset sales are also on the drawing board.

“We think there is tremendous potential to really reinvigorate this company and put it back on its growth trajectory and re-establish itself as the dominant department-store retailer in Canada.” Says Robert Johnston, a vice-president at Mr. Zucker's South Carolina business.

Mr. Loeb says some Bay stores should be converted to Zellers, and that the Target-ization of Zellers — styling them more in the image of the successful U.S. discounter Target — needs to be hammered home even more.

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

A wealthy industrialist with no retailing experience, Mr. Zucker may take a page from U.S. billionaire hedge fund manager Eddie Lampert. He's another non-retailer who orchestrated the acquisition of Sears Holdings Corp. after scooping up the bankrupt Kmart. Now he's set to fix both.

Like Mr. Lampert, Mr. Zucker will likely cut costs and replace top management with his own picks, says Joe Manget, vice-president at Boston Consulting Group who does work for Sears.

(That won't come cheap: golden parachutes for HBC CEO George Heller and four of his senior executives could reach almost $10-million, according to information in public filings.)

Like Mr. Lampert, Mr. Zucker will likely call the shots on strategy. And like Mr. Lampert, Mr. Zucker will be extremely focused on boosting the bottom line. During discussions with senior HBC executives, Mr. Zucker wanted to talk numbers more than anything else, a source said.

But Mr. Zucker should not be too quick to slash advertising because it draws customers to stores, Mr. Manget says. Mr. Lampert went too far at Sears by ditching ads, prompting sales to dwindle, Mr. Manget says. “It's the easiest way to cut costs but it's very hard to regain the customers once they stop shopping you.”

Indeed, Mr. Manget warns that Mr. Lampert's financially-driven recipe of slashing costs, inventory and promotions could yield short-term profit gains but long-term disaster for HBC.

Mr. Zucker would do better by making smart investments in HBC in a bid to shorten inventory purchasing cycles to help ensure that stores carry relevant and timely merchandise, Mr. Manget says. Otherwise products can become dated and have to be cleared out at marked-down prices, which pinches profit.

HBC stores also need to make sure they don't run out of basic items such as white shirts and black pants, he adds. If shoppers can feel confident that they'll be able to find the staples in their desired size, they will likely return to a store and, at the same time, snap up other products while there.

What is more, Mr. Zucker needs to invest in other basics that make shopping more convenient such as comfortable change rooms and helpful people to staff them, he says.

But it's not just the inside of the stores that needs to be transformed, Mr. Manget says. In updating Zellers outlets to emulate Target, Mr. Zucker should refashion the outside as well, he says.

He points to the successful makeover of Canadian Tire and Shoppers Drug Mart newest outlets. With more windows and an airier look, the exterior re-designs flag significant changes inside, too. “Zellers has made some progress here but has a long way to go.”

Shifting more resources to burgeoning product categories, such as pet care, could also pay off for HBC, he says.

For all the potential fixes, there are some retailing experts who say Mr. Zucker would fare better by just selling off the real estate and its leases to rival retailers.

“He could lose all the gains he's made by trying to run this thing,” says retailing consultant Don Watt of DW + Partners, who advises Wal-Mart Canada's U.S. parent. “This turnaround could take years.”