Lost Retail- Everything from A-Z: Zellers

Zellers' logo from 1975-present

Today’s lost retail post is about the “Truly Canadian” discount store, Zellers. Selling everything from A-Z, Zellers was basically like a Kmart in the sense that it was struggling and that their stores were old, but had updated signage for the most part. That’s ironic considering they brought most of the Canadian Kmarts in 1998. However, the merchandise they sold was more like what Target sold. Sadly HBC sold Zellers’ leases to Target in 2011 and closed all but two stores in 2013 as a result.

Early years

The first Zellers store was founded on August 4^th, 1928 by Walter P. Zeller in London ON. Because the stores were doing good, an American retailer called Schulte-United brought them out. In 1931 Zeller brought 14 Canadian stores from Schulte-United and reverted them back to the Zellers brand. In its first year, Zellers had 12 stores in southwestern Ontario, Quebec, and New Brunswick with 11 being former Schulte-United stores and the Kitchener location built by Zellers themselves. Zellers than expanded Eastwards with the acquisition of Federal in 1952.

1950s-1970’s: W.T. Grant Partnership and growth

Around the time Zellers was experiencing high growth, Zellers reached a deal with the W.T. Grant Company, which was allowed to purchase 10% of Zellers common shares, and was given options that eventually allowed W.T Grant Co. to have 51% ownership of Zellers in 1959. In return, the “Grant Company made available to Zellers its experience in merchandise, real estate, store development, and general administration.” Zellers employees were sent to Grant stores and head offices for training, and together they made frequent buying trips to Asia.
From 1952 to 1976, sales climbed from $27 million in 35 stores to $407 million in 155 stores. Zellers adopted several innovations during this period. They opened the first in-store restaurant called the Skillet, their first auto-centre, and the first Zellers to be located in a suburban mall.
Walter Zeller had retired from Zellers in 1955 at the age of 65 and died in 1957.
In 1956, Zellers opened its first fully self-service store, at the Norgate Shopping Centre in Saint-Laurent, Quebec.

HBC years

In 1976, Field’s, who had 70 stores became majority shareholder of Zellers. In June of 1978, Hudson’s Bay Company (HBC) brought out Zellers and Fields and aquiring full control in 1981. In 1991, the locations of Towers Department Stores from the Oshawa Group and were merged with Zellers’ operations. Following their takeover of Vancouver-based Woodward’s in 1994, some stores were converted to Zellers while the others converted to The Bay. In 1998, Hudson's Bay Company acquired Kmart's Canadian division, and merged most of the stores with the Zellers division.

2000s: Decline and sellout to Target

Zellers store in Ottawa. Image: Wikimedia Commons

Hudson's Bay Company and its subsidiaries including Zellers came under the ownership of a New York based company, NRDC Equity Partners, owners of the Lord & Taylor store chain in the US. NRDC invested heavily in The Bay and managed a turnaround by re positioning it as an upscale, fashion forward retailer. However the Zellers chain was still struggling.

On January 13, 2011, it was announced that HBC had reached an agreement with Target for an approximately $1.8 billion sale for the leases of 189 Zellers stores. This was done so that HBC could focus on their core business of department stores and repay debt. The remaining stores that were not purchased by Target would be closed down by March 30, 2013. Of these stores, 125–135 stores would be converted into Target stores,39 others were resold to Walmart, and the remaining 15–25 leases were either sold to other retailers or returned to the landlords.

Three locations in Montreal (which would close January 2014), Etobicoke, and Ottawa (former Kmart) continue to operate under the Zellers brand as clearance centres for Hudson’s Bay, as well as a few stores that Walmart acquired from Zellers in 2013.

It was sad to see yet another Canadian retail icon wither away into the bluelight. On the bright side, some Zellers are still in operation, for now. I hope you enjoyed this post on the History of Zellers

Until next post, DZ

Sources
http://www.hbcheritage.ca/history/acquisitions/zellers
https://en.wikipedia.org/wiki/Zellers