The return of Zellers? Experts divided on whether pop-up will revive brand
More than eight years after the closure of most of its stores across Canada, Zellers is back -- sort of.
The Hudson's Bay Company (HBC) revived the Zellers brand as a pop-up shop within a Bay store in Burlington Ont. But experts are divided over whether the pop-up could bring the long-gone discount retail brand back to life.
Marketing expert Tony Chapman says for many Canadians, particularly for the older generation, the Zellers brand continues to evoke nostalgia.
"To the boomer who grew up with Zellers in the 90s and were building their families, Zellers was all about the lowest price being the law. And that resonated with them, and they loved the fact that they could go there and get their everyday goods at a great value price," he told CTVNews.ca over the phone on Tuesday.
An HBC spokesperson told CTV News Winnipeg last month that the pop-up was designed to "delight our customers with a fun and nostalgic experience with one of HBC's most beloved brands."
However, retail analyst and author Bruce Winder says the brand carries a significant amount of baggage. At its peak in the 1990s, the retailer with the red and white logo had 350 locations. But after the arrival of Walmart, which offered better prices and a wider product selection, Zellers struggled.
"It was definitely an underperforming retailer that was not seen by many as a great retailer," Winder told CTVNews.ca in a phone interview on Tuesday.
In 2011, HBC concluded that Zellers was no longer financially viable and sold its leaseholds for the majority of its Zellers stores to Target for $1.8 billion. At the time, the company was down to 273 stores.
By 2013, nearly all Zellers locations had closed. Three stores in Surrey, B.C., Toronto and Ottawa were kept open as liquidation outlets for The Bay, but these locations would also close their doors by January 2020.
Winder, who used to work at Zellers’ head office, says there isn't much room in the retail landscape for Zellers to mount a comeback.
"The markets changed since they've left. I mean, Walmart has gotten significantly stronger. Amazon is now incredibly strong, and other folks like Canadian Tire and Costco have really upped their game," he said.
If anything, Winder says Zellers could potentially do well as a dollar store brand, but even that would be a challenge, given the success of Dollarama and Dollar Tree.
"I'm not sure if there's enough room. You could try it, but I'm not sure if it would work."
On the other hand, Chapman sees potential in the Zellers brand as being a small-scale Winners-esque liquidation store selling unsold products from The Bay or Sak's Fifth Avenue at deep discounts, while leveraging a "treasure hunt" mentality in its marketing and evoking brand nostalgia in boomers.
"I think they could have a lot of fun with the Zellers pop-up, because they have enough of that inventory that they mark down in their stores," said Chapman.
"They can make Zellers their pop-up 'last chance, too good to be true' brand, and I think they've got a brand name that will capture that boomer who still likes to shop in physical stores."
Currently, the pop-up is limited to only one Bay location, but the HBC has said that there is a possibility for more Zellers pop-ups in the future.
Chapman thinks HBC should set up Zellers pop-ups at more Bay stores, and even vacant Main Street retail locations.
"I have to believe there's a lot of space that you can appropriate at the Bay that would make it very easy to build a little Zellers boutique," he said. "I mean, there's a lot of dead space."
Winder sees the pop-up experiment as more of a PR exercise but remains skeptical over whether it will bring more shoppers into Bay stores.
"It could have been a bit of a test out there to see how people reacted to the brand, to see whether it's worth developing another format down the road," he said. "They may have done that, but I think they have to be careful. Just because people talk about it and get excited about it doesn't mean they're going to shop there.”
With files from CTV News Winnipeg