Sears' Leading U.S. Retailers Downturn in Canada
Several years ago, Canada was considered a gold mine for U.S.-based retailers to expand and open up their stores. After all, Canadians have similar tastes, buying habits and an affection for American brands and retailers.
Many parking lots in cities that are in close proximity to the Canadian border are filled with Canadian cars, but several American retailers operating their stores within Canada are struggling.
Sears (NASDAQ: SHLD) is the latest example of an American retailer experiencing a tough time in the Canadian market.
The Globe and Mail reported on Tuesday that Sears approached at least one retail rival for a potential sale as the company continues to sell off its best Canadian stores.
Sears' most notable location in Canada is in the country's largest city, Toronto. The company announced in October that it has sold its lease at its landmark location in the Toronto Eaton Center. he soon-to-be-vacant lot is rumored to be occupied by Nordstrom (NYSE: JWN), as the fashion retailer makes its Canadian debut in 2014.
According to a source, Sears is selling off its Canadian locations in parts rather than as a whole. “If they had a real [buyer], they would be saving the better real estate so they could sell the whole company. They figured out a long time ago they can't sell the whole company and now they're liquidating.”
Target (NYSE: TGT) is facing similar woes following its mass expansion to Canada in summer 2013. The discount retailer is showing signs of struggling in dealing with its supply chain management, and has failed to convey its message that the store can be a “one stop shop” for all of its clients needs.
Macy's (NYSE: M) must have been paying close attention to its retail peers performance in Canada. “We have indicated on many occasions that we have no plans for expansion in Canada,” says spokesman Jim Sluzewski.
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