Sears Canada targets middle-class shoppers
The future of Sears Canada rests in the hands of middle-class shoppers, says the president and chief executive of the retailer that has been cutting staff and stores to improve its financial performance.
Doug Campbell, who was in Calgary Monday to visit Sears employees, told the Herald that the company has been around for 61 years on the Canadian retail landscape and he intends to keep it going at least another 60 years.
“I’ve been talking in Toronto about how there’s a fascination lately with luxury retail. The Nordstrom coming in. The Saks Fifth Avenue. Everyone is taking their product offering and moving it towards luxury,” said Campbell at the Southcentre Mall Sears.
“The reality is that most Canadians are not luxury retail customers. The reality is most Canadians are middle class, middle income, suburban families.”
He said the company is on a journey of continuous improvement and although further reductions are not “imminent” it will continue to drive efficiency in the business.
“We’re going to continue to do that because the health of Sears is really what’s important to our associates and to our customers,” said Campbell.
In late January, Sears Canada announced it would eliminate 624 jobs. Most of the reductions will be in middle management at Sears department stores, affecting an average of five employees per location, the company said.
It also said it will rework its regional and head office structure to reflect the latest changes and to align it with the smaller business.
Two weeks ago earlier, Sears said about 1,600 positions would be affected as it moved ahead with plans to shutter its three Canadian call centres and reduce staff at its warehouses.
The company is trying to reduce costs and improve its overall business as part of a three-year turnaround plan. Last year, it made a similar round of cuts that lowered its overall employee count to about 20,000 people.
Sears Canada has made an effort to shrink its operations by selling off leases for some of its most prominent locations and has been more aggressive in cutting the number of employees across its operations, from head office positions to customer service.
The retailer operates 181 corporate stores, 241 Hometown appliance stores, more than 1,400 merchandise pickup locations and 101 travel offices.
“The Sears brand in Canada related to the department store format is in a period of steep decline and is likely not to recover,” said Albertabased retail specialist Michael Kehoe with Fairfield Commercial Real Estate Inc.
He said the retail marketplace in Canada is polarized with higherend retailers such as luxury brand Holt Renfrew, rapidly expanding Simons and the much-anticipated Saks Fifth Avenue at one end with the Hudson’s Bay Co. upping their offerings as well.
“On the other end of the Canadian retail spectrum, Walmart and Target duke it out in a competitive dogfight for consumer dollars,” said Kehoe.
“Sears is caught at the lower end of the middle with no value proposition with Canadian consumers and no future. Sears will soon join K-Mart, Simpson’s and Woodward’s in the scrap heap of Canadian department store retailing.”
In Calgary, Sears has three stores (Southcentre Mall, Marlborough Mall and North Hill Mall), three home stores and one specialty appliance/mattress store, as well as one distribution centre and a new one to be built this year primarily for the direct business which will be open for Christmas operation. Total employees in Calgary number about 850 people.
Calgary lost about 138 people in recent layoffs in the logistics and product repair services area.
Campbell said the company has to better understand the dynamics of the communities where it operates.
“Calgary is a big and important community for us,” he said. “We have to do more reinvesting back into the community ... We have to be community based. What’s important in Calgary isn’t the same thing that’s important in Richmond or what’s important in Toronto.”
Campbell said he doesn’t have a strategy in selling real estate. In the past year or so, the company has sold back leases to shopping centres (including Chinook Centre and Deerfoot Mall in Calgary) because they were opportunities presented to Sears.