News of Sears Canada seeking creditor protection was not a surprise to anyone that follows retail trends. I myself was surprised it took this long.
Many have commented (blamed) changing shopping habits particularly in the online space but that is not that only reason for Sear’s demise. There are several reasons and many of them will be similar to other brands who are no longer here.
Let’s start with their online strategy. For generations like Eatons, Sears was known for their catalogs. I remember as a kid looking forward to the Christmas wish book which would show up around the end of August and look through all the amazing things. No matter where you were in this vast country you could order something from the catalog and it would show up in a matter of weeks at your local depot.
When the online revolution came, many stores thought the growth would be very slow. Sears could have used its institutional knowledge of mail order sales and start to transition to an online model. They had done this in the past with telephone orders decades before. When they acquired Eatons in 1999 it would have been another change to use that institutional knowledge.
The next thing was the change in consumers buying habits. The growth of low-end stores like Walmart and Dollerama and the rise of specialty stores hollowed out the middle ground that traditional department stores had. This affects many stores in that space and successful ones have moved to redefine their market. Most have moved upmarket with varying results.
One of Sears largest mistakes IMHO was selling off several of their exclusive brands that they were famous for. Craftsman tools for example. Craftsman tools had a large loyal clientele who would continue to buy from the brand for its quality and the fact you could return a broker tool no questions asked. Customers were willing to pay a higher amount for the quality.
The last issue was selling off many of their higher profile locations. Malls are experiencing a change as “anchor” stores like Sears and Target close. Most experts agree and it has been seen that smaller neighborhood malls are disappearing with larger regional malls surviving while changing as well. Many of these locations would have been ideal holding to keep, now they have to rely on small stores with smaller margins.
I haven’t begun to talk about the various management issues but as it is very clear Sears has an uphill battle ahead of it. The company must overcome quite a bit and it is far from certain that it will survive.