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Sears "lost its way" says Cambrian business prof

Store's liquidation will cost 12,000 people their jobs across Canada
Sears
Sears Canada was given court approval on Oct. 13 to move forward with a full liquidation of its remaining stores, including its Sudbury location inside of the New Sudbury Centre. (File)

Sears Canada was given court approval on Oct. 13 to move forward with a full liquidation of its remaining stores, including its Sudbury location inside of the New Sudbury Centre.

The move will put 12,000 employees of out of work Canada-wide, as the 65-year-old chain will vanish from the country's retail landscape.

What will the impact be locally, here in Sudbury? Job loss, a shrinking retail sector, vacant space in one of the city's most popular shopping destinations. 

While today's announcement that Sears will undergo a complete liquidation may have come as a shock to some, Cambrian College School of Business professor Brian Vendramin says he saw this coming for some time.

"I'm not surprised that this has happened, I've been preparing for this for the last two years, and Sears had certainly lost its way," said Vendramin. 

"I thought that they were akin to a GPS that kept recalculating. They couldn't find a merchandise mix that would resonate with their customers, they were neither off-price or high-quality or high-touch shopping. They were trying to reinvent for younger people but what they really ended up doing was following their traditional shoppers to the grave."

Vendramin explains that in order for big box retailers like Sears to survive in today's marketplace, they need to have a clear understanding of what business they're in and if they're relevant in that business.

"You look at the Sears model where they had a very attractive catalogue business for a number of years, but they weren't ever able to move that online and have that e-commerce that other stores were doing," said Vendramin.

"Sears' footprint was too big and I had noticed in the last few years there were less and less people on the floor and you weren't able to find an associate in a lot of instances until you went to the cash register. In the older days there were cashiers and associates in every department and there was more building of relationships with the customer."

Vacant space makes for another challenge, as the soon to be empty Sears location will leave New Sudbury Centre managers Morguard with a large space to fill.

"While we are disappointed with the news, ultimately there is opportunity," said a statement from Morguard.

"The New Sudbury Centre could benefit from another retailer in the space – or it could result in an opportunity for redevelopment and remerchandising. We will work to identify the best opportunities and communicate our plans to the community as they are solidified."

This is an issue that is not exclusive to Sudbury however, as Vendramin explained that smaller centres that are at zero growth will soon see a lot of big box stores leave town.

"Rio Can recently announced that they're putting up 100 properties for sale, and they'll only be retainining property in places like Vancouver, Toronto, Ottawa, Calgary, and Montreal," said Vendramin. 

"So places with these big box stores like Sudbury, Timmins, Sault Ste. Marie and North Bay, those properties are going to go up for sale. And when the (Rio Can) CEO was asked why they're going up for sale, he said it's because there's zero growth in these small centres and over the years they've been divesting, but now in his words, it's time to take the bandaid off."

At its peak, Sears Canada employed as many as 41,000 people, and while that number is just 12,000 now, it is still a lot of lost jobs, and the effects of that will be felt across the board as other companies may have to create new positions.

"I think if you're a top performer, somebody like a Canadian Tire or Lowes or Home Depot may pick you up," said Vendramin. 

"But for others, we need to be respectful, they're going to go through some tough times and I'm hoping that the government will step in and offer some re-training or some post-secondary education so that these people can learn some new skills."

The ripple effect continues when mass layoffs like this occur, as a number of people are no longer receiving their normal paycheque, and are then unable to put money back into the economy at the same rate, as their spending starts to trend downwards.

While the big box stores continue to struggle, Vendramin says that locally, independant, local businesses are on the upswing.

"Independant retailers continue to do well, they have their own niche and understand their customers and know how to reach them," said Vendramin. 

"It's not just social media, it's having events, making the customer service experience a good experience. You need to continue to differentiate yourself from everybody else in the marketplace."


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