Small cities brace for Sears closures
Easiest solution for malls would be to woo intermediate-size shops
VANCOUVER — At Heritage Place Mall in Owen Sound, an empty Sears department store would leave a mammoth void. The insolvent retailer is one of the mall’s largest occupants. More than 60 people work in the anchor tenant’s roughly 6,500 square metres, a space big enough to fit 14 basketball courts.
On Friday, a court gave Sears Canada’s approval to liquidate its 130 remaining stores, a decision that sent shoppers, employees and mall owners in Owen Sound and dozens of other smaller Canadian cities scrambling to find alternative shopping destinations, jobs and tenants.
“My first reaction was: Oh, crap,” said Owen Sound Mayor Ian Boddy of hearing the nearly 30-year-old location, is likely to close soon. “We’re pretty disappointed.”
A closure will hurt the local economy, he said, leaving dozens unemployed and, perhaps, prompting fewer people to travel to the region to shop.
Some 4,000 kilometres away on the West Coast, Lyn Hall, mayor of Prince George, B.C., echoed those concerns about Sears at its Pine Centre Mall. “It will have a direct economic impact on our community.”
The store employs more than 60 people, he said, and sells goods and services to hundreds of thousands living in Prince George and the surrounding areas.
Both leaders wondered how their malls would cope with an anchor’s departure.
The bulk of the former juggernaut’s stores are in shopping centres in communities such as Owen Sound and Prince George — smaller Canadian cities, where the store may serve a larger geographic area than just those living within the city’s borders.
Of Sears’s remaining 74 department stores, all but one are in shopping malls, most in areas with populations under 400,000 and some well under that.
The malls in these so-called secondary markets are likely to struggle to fill the vacant space if Sears doesn’t sell its leases or real estate to a third party, said Peter D. Morris, the founder of Greenstead Consulting Group, a real-estate consultancy firm.
“I fear some of those smaller properties may not be able to come back at all,” he said, declining to speculate which of the malls may go under.
There isn’t another big department store chain that requires that much space waiting on the sidelines, he said.
The remaining department store mall locations total nearly one million square metres. That means the select few chains such as The Hudson’s Bay Co. or Simons that could take over some locations have a plethora of real estate to choose from, said Morris, and likely won’t gobble up anywhere close to all the vacant space.
For malls that don’t draw another single anchor tenant, he said, the easiest solution would be to divvy up the former department store space and woo intermediate-size shops, such as athletic retailer Sport Chek or bookstore Indigo.