Posted: Mar 2, 2012, 5:37 PM
Planet Ottawa and beyond
Join Date: Feb 2009
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Sears shuttering Rideau Centre store
Peter Kovessy, March 2, 2012
Struggling department store retailer Sears Canada is closing its 240,000-square-foot Rideau Centre store by the end of October, along with locations in Vancouver and Calgary, the company announced Friday.
Rideau Centre general manager Cindy VanBuskirk declined to discuss what the move means to the Rideau Centre and directed questions to the mall's owner, Cadillac Fairview.
In a statement, Cadillac Fairview said it does not discuss tenant negotiations or leasing strategies. The company added that it is always looking for opportunities to "create a fresh and enticing shopping environment for our customers, and this agreement with Sears is a reflection of that."
The departure of Sears could open up opportunities for retailers who currently do not have a presence in Ottawa, which Ms. VanBuskirk said in an earlier interview is sometimes due to the unavailability of space within the city's prime shopping locations.
Speaking at last fall's Ottawa Real Estate Forum, Ms. VanBuskirk said there are several retailers who should have Ottawa on their radar, such as Crate & Barrel, Victoria's Secret, J.Crew, Anthropolgie and H&M. She named several other retailers that she'd like to see come to Ottawa, including Juicy Couture, Brooks Brothers, Williams-Sonoma and Pottery Barn.
"The reason they are not here is either that they are just coming to Canada and just going into the Toronto market, and Ottawa is a year or two away or - as in the case of H&M - they haven't been able to get the right real estate here. They can't find the right location, with the right size at the right time."
The city's regional malls and large power centres - representing almost seven million square feet of shopping space - ended 2011 with a vacancy rate of 0.6 per cent, according to statistics from Cushman & Wakefield Ottawa.
Sears will pay a total of $170 million to sell its Ottawa, Calgary and Vancouver leases back to Cadillac Fairview in deals expected to close by April 20.
Some employees will have the opportunity to apply for other positions at nearby Sears locations, the company said. The retailer will also look at opening other Sears stores in the affected areas.
The move comes as the retailer works to revamp its struggling Canadian operations. Over the past few months it has laid off about 470 employees in an attempt to cut costs.
The sale of the three department stores follows a similar strategy made by its U.S. parent company in an attempt to shore up some cash.
"While we had no plans to close stores, the transaction for these three specific locations provides an attractive financial benefit for the company which strategically allows us to drive growth in areas which can be most beneficial," said president and CEO Calvin McDonald in a release.
"We are investing in a refresh of our stores and piloting new formats which will provide Canadians exciting ways to access Sears products and services. This is an opportunity for Sears Canada that fits well with our vision and where our strengths are as a retailer."
Sears and other Canadian retailers have been gearing up in preparation for the arrival of U.S. discount retailer Target next year.
Mr. McDonald took the lead role at Sears Canada last summer as the retailer pushed ahead with a streamlining effort to help reverse recent losses.
He has said he wants to make the stores more attractive, relevant and shopper friendly after finding that Sears' stores were cluttered and difficult to navigate.
Last month, the company announced plans to cut roughly 400 jobs across the country as it closed nearly all of its in-store cafes. Sears Canada also laid off about 70 employees in its head office last year.
Sears has roughly 30,000 employees across Canada and more than 400 corporate, dealer and home services stores.
In the National Captial Region, Sears also has locations at the St. Laurent Centre, Carlingwood Mall, the Ikea plaza off Pinecrest Road and across the Ottawa River in Hull and Aylmer.