Zellers

Zellers

Zellers Inc. is Canada's second-largest chain of mass merchandise department stores, with 282 locations in communities across Canada. Zellers is headquartered in the Toronto suburb of Brampton, Ontario, and is a subsidiary of Hudson's Bay Company ("Hbc").

In recent years, Zellers has been moving slowly away from the discount department store model, and has introduced better quality merchandise and different customer service concepts. New and remodelled Zellers stores are often compared to that of Target Corporation in the United States.

History

Early years

The company was founded in 1931 by Walter P. Zeller as "stores for thrifty Canadians". The chain began with the purchase of the fourteen Canadian locations of American retailer Schulte-United, all of which are in southeastern Ontario. Almost immediately, Zellers began an aggressive expansion strategy, and within 25 years operated sixty stores, and employed 3000 people. In 1952, in a move to expand into eastern Canada, it acquired the Federal chain of variety stores, adding more than a dozen new Zellers locations.

Acquisition by W.T. Grant Company

During this period of expansion, Zellers concluded a deal with the W.T. Grant, a similar chain of American mass merchandise department stores. This arrangement allowed W.T. Grant to purchase 10% of Zellers shares, and eventually a 51% ownership in 1959. In exchange, the "Grant Company [was] making available to Zellers its experience on matters of merchandise, real estate, store development, and general administration". Zellers employees were sent to Grant stores and head office for training, and both companies made common buying trips to the Orient. In the 1950s, the chain again began opening new locations, and in 1956 opened its first self-serve location at the Norgate shopping centre in Saint-Laurent, Quebec. Stores opened in 1960 saw many new innovations, including the first in-store restaurant, the first auto centre, and the first suburban location. By 1976, Zellers had grown to a chain of 155 stores, with annual sales of $407 million.

Acquisition of Fields

Although Zellers was prospering, W.T. Grant was facing intense competition in the United States, and was forced to withdraw itself entirely from its Canadian operations. In 1976, Zellers management and shareholders were presented with an offer from Fields, a clothing retailer based in Vancouver, British Columbia, to purchase a 50.1% stake in the company for $32,675,000. Zellers shareholders, unhappy with the idea of Zellers becoming a subsidiary of Fields, reversed the takeover, and purchased Fields, and its hardware store division, Marshall Wells. This sale added 70 Fields stores, and 162 franchised Marshall Wells stores to the company. Fields President and founder, Joseph Segal, was appointed as President of Zellers.

Merger with Hudson's Bay Company

In June, 1978, Zellers presented a bid to acquire 100% ownership of the Hudson's Bay Company. HBC management, recognizing Zellers' profitability, and the potential to enter a new retail segment, decided to purchase Zellers instead. As two retailers operating in very different retail segments than HBC, both Zellers and Fields were kept intact, and established as separate divisions of the company. HBC would acquire full ownership of Zellers and Fields in 1981, and Marshall Wells, in 1982. By 1985, the Company had sold Marshall Wells for $20 million, because it was not relevant to its department store business.

Further acquisitions

In 1991, HBC acquired the 51 stores of the Towers/Bonimart chain, and converted most of them to Zellers outlets, including its flagship location in Toronto. Zellers advertisements at the time featured both the Towers mascot "Sparky", and the Zellers mascot "Zeddy", walking arm-in-arm. During this period, Zellers had the popular and well-known slogan "Where the lowest price is the law. Everyday."

In 1993, HBC purchased the assets of the bankrupt Woodward's chain, including 21 store locations. These were converted into both Zellers and Bay stores, and greatly expanded the Company's presence in Western Canada.

In 1998, Hudson's Bay Company acquired Kmart's Canadian division, and merged it with the Zellers division to create a larger combined chain under the Zellers name. Many Kmart locations were closed, and some sites became full Zellers outlets. The Barrie, Ontario location was closed and re-opened as a Bay store. Zellers also took over Kmart's Canadian head office in Brampton, Ontario at this time.

On February 28, 2006, Zellers was taken private when South Carolina businessman Jerry Zucker finalized a takeover bid on the Hudson's Bay Company. Following his death, Zellers came under the ownership of a New York-based company, NRDC Equity Partners, the owner of the Lord & Taylor and Fortunoff brands.

Current operations

Today, Zellers operates stores from St. John's, Newfoundland and Labrador, to Victoria, British Columbia, and employs over 35,000 people. The average store size is 94,000 square feet (8,700 m²). Zellers Select stores are designed for smaller markets with populations under 25,000, with stores averaging 45,000 square feet (4,200 m²). Almost every Zellers location features a pharmacy and an in-store restaurant, the 1950s themed Zellers Family Diner. Newer locations are typically larger than 100,000 square feet(9,290 m²), and also feature a hair salon, refrigerated groceries, major appliances, mattresses, and expanded electronics and cosmetics departments. Multi-level stores are gradually being equipped with a new, state-of-the-art shopping cart system known as the "Cartveyor", which is designed to transport carts between floors next to a standard escalator.

In the past several years, Zellers has made a notable push to drive sales through use of exclusive, private label merchandise. In a strategy similar to Target's, Zellers sells Big Star, Cherokee, Sportek, "Stuff by Duff", Homestyles, Nest by House & Home, Wabasso "Design Ideas", Alfred Sung Home, Truly, MarketSquare, Beaumark, Home Studio, and many other labels that can only be found in their stores in Canada. Private brands now represent over 30% of Zellers sales.

The Neighbourhood Market is Zellers' expanded section of grocery items that goes beyond just selling dry snacks and other food. Frozen and dairy aisles, including ice cream, and frozen pizza, have been added to create an easy one-stop shopping experience. This may seem unusual to many customers, and was practically unheard of in a mass merchandiser in Canada until recently. In these stores, the food assortment has been expanded by 50%. Whenever a new store is built, or an old one renovated, Zellers will make Neighbourhood Market part of it. In spite of all of this, Zellers says it doesn't expect to take things to the point where it has all of the same products as a full grocery.

HBC announced in late May 2005 that as part of their sales growth plan, "The Big Ticket strategy" will be expanded to 97 Zellers stores across the country, after being piloted at select locations in Ontario, Quebec and Manitoba. Nine stores will offer a small assortment of appliances, 83 will offer appliances and mattress sets, and five will offer a full assortment of appliances, mattress sets and furniture. HBC is also expanding brands previously only sold at the Bay to Zellers, such as Jockey International and London Fog.

Several new Zellers stores will be opened in 2008.

Trivia

  • Square One Shopping Centre, located in Mississauga, Ontario is home to Canada's largest Zellers store at . The store is also in the same mall as Canada's largest Wal-Mart.
  • Zellers and the Bay are major tenants in the West Edmonton Mall in Edmonton, Alberta.
  • Zellers in store restaurants used to be named "The Skillet". Some older stores may still use this name today however the majority stores use "Zellers Family Restaurant" or "Zellers Family Diner" name.
  • Zellers had started a customer loyalty program called "Club Z" in 1986. Program members earned points on the purchases they made in the store. Today, the Club Z program has evolved into the HBC Rewards program where customers can earn points for their purchases at all HBC stores and other partners.
  • Zellers once published a line of unlicensed Atari 2600 games.
  • Zellers once used a teddy bear mascot named Zeddy.
  • A Zellers in Brampton, Ontario was used in Emily Haines's music video for "Doctor Blind" from her debut solo album Knives Don't Have Your Back.
  • An unknown Zellers location was used in the popular American show, Queer As Folk; serving as the workplace of character Michael Novotny. The show disguised the store as the "Big Q", but the Zellers signage was still used.

References

External links

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