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Timing might be right for HBC to revive Zellers brand

Hudson's Bay Company might have picked a good time to roll out the return of the Zellers department store brand, which begins this week with locations inside 25 Hudson's Bay stores across Canada.

The relaunch also includes a e-commerce platform, which is slated to go live with the new in-store locations on March 23.

The new Zellers stores will open in spaces ranging from 8,000 to 10,000 square feet in the 25 existing Hudson’s Bay stores in locations owned by such major landlords as Cadillac Fairview, Ivanhoe Cambridge, Oxford Properties, Morguard and Primaris REIT, among others.

With the comparatively small footprints within the existing department stores, Madeleine Nicholls, Colliers Vancouver senior managing director and national retail brokerage leader, doesn’t expect the bricks-and-mortar locations to have a huge impact on the Canadian retail market.

However, she thinks Zellers' placement between luxury and discount store brands will appeal to many Canadians.

“We're all feeling the pinch in our pocketbooks right now for loads of reasons, and I think that the timing of this launch is very good,” Nicholls told RENX.

“It's not going to look and feel like the Zellers of yesteryear, but I think The Bay is going to be very thoughtful about the items that go into that 8,000 to 10,000 feet and I think it's going to be more of a curated selection of goods.”

Initial Zellers rollout locations

Hudson’s Bay stores participating in the initial rollout include: CF Rideau Centre in Ottawa; Scarborough Town Centre in Scarborough; The Pen Centre in St. Catharines; Sunridge Mall in Calgary; Kingsway Mall in Edmonton; CF Pacific Centre in Vancouver; and Guildford Town Centre in Surrey.

Colliers Vancouver senior managing director and national retail brokerage leader Madeleine Nicholls. (Courtesy Colliers)
Colliers Vancouver senior managing director and national retail brokerage leader Madeleine Nicholls. (Courtesy Colliers)

“The top-performing malls have the most traffic going through them, so if they’re doing a bit of an experiment it’s better to do it with more traffic than less,” Nicholls said.

While the new Zellers locations won’t include the in-store diners of the past, some will feature food trucks outside serving popular and iconic menu items. 

The physical locations will also provide support for the e-commerce site which will service all of Canada and be a big part of the Hudson's Bay Company's (HBC) Zellers relaunch strategy.

Nicholls sees the Zellers outlets in Hudson’s Bay stores as a test run.

If it proves successful, she believes it could lead to the opening of stand-alone stores in the future. 

Zellers history

The Zellers chain was founded in London, Ont. in 1931. It was purchased by HBC in 1978 and closed in 2013. At its peak in the late 1990s, Zellers had 350 stores across Canada.

HBC sold the leases for many Zellers locations to Target Corporation in early 2011.

The first Canadian Target store opened in March 2013 and the chain was up to 133 locations by January 2015, but the U.S.-based retailer closed all locations by April of that year after racking up more than $2 billion in losses. 

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