Zellers
Encyclopedia
Zellers Inc. is Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...

's second-largest chain of mass merchandise discount stores, with locations in communities across Canada. A subsidiary of the Hudson's Bay Company
Hudson's Bay Company
The Hudson's Bay Company , abbreviated HBC, or "The Bay" is the oldest commercial corporation in North America and one of the oldest in the world. A fur trading business for much of its existence, today Hudson's Bay Company owns and operates retail stores throughout Canada...

 (HBC), it has 273 locations across the country.

In 2011, Target Corporation
Target Corporation
Target Corporation, doing business as Target, is an American retailing company headquartered in Minneapolis, Minnesota. It is the second-largest discount retailer in the United States, behind Walmart. The company is ranked at number 33 on the Fortune 500 and is a component of the Standard & Poor's...

 acquired the leaseholds of 189 Zellers stores (including locations being resold to other retailers) as the chain prepares to expand into Canada
Target Canada
Target Canada Co. is the Canadian subsidiary of United States-based discount department store chain Target Corporation, formed in 2011 to oversee the company's Canadian operations....

 in 2013 and 2014. HBC will continue to operate these locations until at least early 2012, at which point they will close for renovations, with individual closing dates varying by location. Target is not buying the Zellers chain outright, and HBC is currently reviewing options for the remaining 84 Zellers locations.

Early years

The company was founded in 1931 by Walter P. Zeller
Walter P. Zeller
Walter Philip Zeller was a Canadian businessman and founder of discount retail chain Zellers.Zeller was born in Waterloo County, near the city of Kitchener, Ontario. His great-grandfather settled in Breslau, Ontario after arriving from Germany. Prior to founding the store, Zeller moved to the US...

 as "stores for thrifty Canadians". The chain began with the purchase of the fourteen Canadian locations of American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 retailer Schulte-United, all of which were in southeastern Ontario
Ontario
Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....

. Almost immediately, Zellers initiated an aggressive expansion strategy. Within 25 years, Zellers operated sixty stores and employed 3,000 people. In 1952, in a move to expand into Atlantic Canada
Atlantic Canada
Atlantic Canada is the region of Canada comprising the four provinces located on the Atlantic coast, excluding Quebec: the three Maritime provinces – New Brunswick, Prince Edward Island, and Nova Scotia – and Newfoundland and Labrador...

, it acquired the Federal Stores
Federal Stores
Federal Stores was founded as a distribution and retail group in Malaysia in 1899. In 1926 the business was incorporated as Cycle and Carriage in Singapore. It is currently a major part of the Jardine Matheson Group and is known as Jardine Cycle and Carriage Limited. It is based in Singapore....

 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 W. T. Grant
W. T. Grant
W. T. Grant or Grants was a United States-based chain of mass-merchandise stores founded by William Thomas Grant that operated from 1906 until 1976. The stores were generally of the variety store format located in downtowns.-History:...

, a similar chain of American mass merchandise department stores. This arrangement allowed W.T. Grant to purchase 10% of Zellers shares
Share (finance)
A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...

, and eventually a 51% ownership in 1959. In exchange, the Grant Company made available to Zellers its experience in merchandising, real estate, store development, and general administration. Zellers employees were sent to Grant stores and head office for training and the two companies made common buying trips to the Orient
Orient
The Orient means "the East." It is a traditional designation for anything that belongs to the Eastern world or the Far East, in relation to Europe. In English it is a metonym that means various parts of Asia.- Derivation :...

. In the 1950s, the chain again began opening new locations, and in 1956 opened its first self-serve location at the Norgate shopping centre
Norgate shopping centre
Norgate shopping centre is a strip mall built in 1949, in the then-suburb of Saint-Laurent, Quebec, now the Saint-Laurent borough of Montreal, Quebec, Canada.-History:...

 in
Saint-Laurent, Quebec
Saint-Laurent, Quebec
Saint-Laurent is a former city on the Island of Montreal in southwestern Quebec, Canada. It is now the largest in area of the boroughs of the city of Montreal....

. Stores opened in 1960 employed many new innovations, including the first in-store restaurant, the first auto centre, and the first suburban location. In 1975, Zellers changed to the current logo.

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 entirely from its Canadian operations. In 1976, Zellers management and shareholders were presented with an offer from Fields
Fields (department store)
Fields is a brand of Canadian discount stores owned by Hudson's Bay Company, with 165 locations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Yukon, and Northwest Territories.- History :...

, a clothing retailer based in Vancouver
Vancouver
Vancouver is a coastal seaport city on the mainland of British Columbia, Canada. It is the hub of Greater Vancouver, which, with over 2.3 million residents, is the third most populous metropolitan area in the country,...

, British Columbia
British Columbia
British Columbia is the westernmost of Canada's provinces and is known for its natural beauty, as reflected in its Latin motto, Splendor sine occasu . Its name was chosen by Queen Victoria in 1858...

, 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. Zellers and Fields, operating in very different retail segments than HBC, were kept intact, and established as separate divisions of the company. HBC acquired full ownership of Zellers and Fields
Fields (department store)
Fields is a brand of Canadian discount stores owned by Hudson's Bay Company, with 165 locations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Yukon, and Northwest Territories.- History :...

 in 1981, and Marshall Wells, in 1982. By 1985, HBC had sold Marshall Wells for $20 million, because it was not relevant to its department store business.

Further acquisitions

In 1990, HBC acquired the 51 stores of the Towers/Bonimart
Towers Department Stores
Towers, operating as Bonimart in Quebec, was a Canadian discount department store chain owned by the Oshawa Group, a now-defunct grocery retailer and distributor.-History:The first store was opened in 1960 in Toronto Towers, operating as Bonimart in Quebec, was a Canadian discount department store...

 chain, and converted most of them to Zellers outlets, including its flagship location in Toronto
Toronto
Toronto is the provincial capital of Ontario and the largest city in Canada. It is located in Southern Ontario on the northwestern shore of Lake Ontario. A relatively modern city, Toronto's history dates back to the late-18th century, when its land was first purchased by the British monarchy from...

. Zellers advertisements at the time featured both the Towers mascot
Mascot
The term mascot – defined as a term for any person, animal, or object thought to bring luck – colloquially includes anything used to represent a group with a common public identity, such as a school, professional sports team, society, military unit, or brand name...

 "Sparky", and the Zellers mascot "Zeddy", walking arm-in-arm. During this period, Zellers had the popular and well-known slogan "the lowest price is the law".

In 1993, HBC purchased the assets of the bankrupt Woodward's
Woodward's
Woodward's was the name of a department store chain which operated in Alberta and British Columbia, Canada for one hundred years, before its sale to the Hudson's Bay Company .-History:...

 chain, including 21 store locations. These were converted into both Zellers and the Bay
The Bay
The Bay is a chain of 91 department stores that operate across parts of Canada. It is the main brand of Hudson's Bay Company , North America's oldest company. It has its headquarters in the Simpson Tower in Toronto. In French, the chain is known as la Baie, short for "Compagnie de la Baie d'Hudson"...

 stores, and greatly expanded the Company's presence in Western Canada. In 1998, Hudson's Bay Company acquired Kmart
Kmart
Kmart, sometimes styled as "K-Mart," is a chain of discount department stores. The chain acquired Sears in 2005, forming a new corporation under the name Sears Holdings Corporation. The company was founded in 1962 and is the third largest discount store chain in the world, behind Wal-Mart and...

'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 while some sites became full Zellers outlets. Zellers also took over Kmart's Canadian head office in Brampton
Brampton
Brampton is the third-largest city in the Greater Toronto Area of Ontario, Canada.Brampton may also refer to:- Canada :* Brampton, a city in Ontario** Brampton GO Station, a station in the GO Transit network located in the city- United Kingdom :...

, Ontario.

On February 28, 2006, Zellers was taken private when South Carolina
South Carolina
South Carolina is a state in the Deep South of the United States that borders Georgia to the south, North Carolina to the north, and the Atlantic Ocean to the east. Originally part of the Province of Carolina, the Province of South Carolina was one of the 13 colonies that declared independence...

 businessman Jerry Zucker
Jerry Zucker (businessman)
Jerry Zucker was an Israeli-born American businessman and philanthropist.-Biography:Jerry Zucker was the son of Holocaust survivors. He graduated from the University of Florida with a Bachelor of Science degree in mathematics, chemistry, and physics and went on to earn his M.S...

 finalized a takeover bid for the Hudson's Bay Company. Following Zucker's death in 2008, HBC (including Zellers) came under the ownership of a New York-based company, NRDC Equity Partners
NRDC Equity Partners
NRDC Equity Partners is an entrepreneurial-based private investment firm investing in retail, real estate and consumer branded businesses.-History:...

, the owner of the Lord & Taylor
Lord & Taylor
Lord & Taylor, colloquially known as L&T, or LT, based in New York City, is the oldest upscale, specialty-retail department store chain in the United States. Concentrated in the eastern U.S., the retailer operated independently for nearly a century prior to joining American Dry Goods...

.

Sale of leases to Target

On January 13, 2011 it was announced that Target Corporation
Target Corporation
Target Corporation, doing business as Target, is an American retailing company headquartered in Minneapolis, Minnesota. It is the second-largest discount retailer in the United States, behind Walmart. The company is ranked at number 33 on the Fortune 500 and is a component of the Standard & Poor's...

 of the United States will purchase the lease agreements of up to 220 Zellers stores for C$1.825 billion. Under the agreement, Zellers will initially sublease the properties, and continue to operate them as Zellers locations until at least January 2012, and at latest the end of March 2013. After the Zellers stores at these locations close, Target will renovate 100 to 150 of them, and reopen them under the Target banner during 2013 and 2014, with the remaining acquired sites to be transferred to other retailers.

105 of the maximum 220 locations to be transferred to Target were identified in late May 2011, and another lot of 84 locations in late September 2011, bringing at 189 the total number of Zellers stores acquired by Target. Of theses 189 stores, an estimate of 125-135 stores will be converted into Target stores, 39 others will be resold to Walmart Canada, and the remaining 15-25 leases will either be sold to other retailers or returned to the landlords who own the sites. One of the first Zellers stores closing down for the 2010s is a store in Dorval, Quebec
Dorval, Quebec
Dorval is a city on the island of Montreal in southwestern Quebec, Canada. As of the 2006 Canadian Census, the population increased by 2.2% to 18,088. Although the city has the largest surface area in the West Island, it is among the least densely populated...

 before HBC's announcement to wind down most Zellers stores and sell them to Target.

The remaining 84 Zellers stores, that are not affected by the transaction, will continue to operate under the banner until the HBC takes a decision about the future of the chain. Almost the entirety of theses stores are either situated in towns/small cities, or located in shopping centres with less than 30 tenants, or unionized
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...

. The four Zellers Select stores are among theses 84 outlets.

Current operations

Zellers operates stores from St. John's, Newfoundland and Labrador
St. John's, Newfoundland and Labrador
St. John's is the capital and largest city in Newfoundland and Labrador, and is the oldest English-founded city in North America. It is located on the eastern tip of the Avalon Peninsula on the island of Newfoundland. With a population of 192,326 as of July 1, 2010, the St...

, to Prince Rupert, British Columbia
Prince Rupert, British Columbia
Prince Rupert is a port city in the province of British Columbia, Canada. It is the land, air, and water transportation hub of British Columbia's North Coast, and home to some 12,815 people .-History:...

, 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 in the English-speaking provinces
Provinces and territories of Canada
The provinces and territories of Canada combine to make up the world's second-largest country by area. There are ten provinces and three territories...

 features a pharmacy and an in-store restaurant, the 1950s themed "Zellers Family Diner". Most locations in Quebec
Quebec
Quebec or is a province in east-central Canada. It is the only Canadian province with a predominantly French-speaking population and the only one whose sole official language is French at the provincial level....

 don't have a pharmacy, but practically all stores have a restaurant (known in the province as "Restaurant familial Zellers").

Newer Zellers 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 shopping cart
Shopping cart
A shopping cart is a cart supplied by a shop, especially supermarkets, for use by customers inside the shop for transport of merchandise to the check-out counter during shopping...

s 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 that used by Target Stores, Zellers sells Big Star, Cherokee, Sportek, "Stuff by Duff
Hilary Duff
Hilary Erhard Duff is an American actress, singer-songwriter, entrepreneur, and author. After working in local theater plays and television commercials in her childhood, she achieved fame playing the title role in the Disney Channel television series Lizzie McGuire. She also reprised her role in...

", Homestyles, Hunt Club, Midtown, 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 dry snacks and other food. Frozen and dairy aisles, including ice cream, and frozen pizza, have been added. 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. With a new prototype underway for Zellers, the new Neighbourhood Market will feature a full grocery department including fresh produce and baked goods. This is seen in the newly renovated Winnipeg
Winnipeg
Winnipeg is the capital and largest city of Manitoba, Canada, and is the primary municipality of the Winnipeg Capital Region, with more than half of Manitoba's population. It is located near the longitudinal centre of North America, at the confluence of the Red and Assiniboine Rivers .The name...

 stores. The company is expected to continue renovating old stores and building new stores with this new format in 2011.

In late 2008, under the new direction of Mark Foote, Zellers rolled out the new Every Day Priced Strategy under the title 'Saving You More'. Products identified with a 'We've Checked the Price' bubble and/or signs are priced similarly (usually the same) as at their major competitor in the marketplace (i.e., Wal-Mart). Zellers' focus with this program and other 'Pricing Programs' such as Price-Cut (monthly price reductions) and Save This Week (Weekly Sale Items), as well with its new focus on Price Matching Canadian retailers on identical items, should improve its pricing message to the consumer.

In July 2010, Zellers unveiled its new format/look stores in five Winnipeg stores, with two more to open late 2010 and early 2011. One store opened on the lower floor of the downtown Winnipeg
Downtown Winnipeg
Downtown Winnipeg is centred around Portage Avenue and Main Street, and is bounded by the Assiniboine River on the south, Colony and Balmoral Streets on the west, Notre Dame Avenue, Princess Street, and Logan Avenue on the north, and the Red River on the east. It includes the Exchange District,...

 Bay
The Bay
The Bay is a chain of 91 department stores that operate across parts of Canada. It is the main brand of Hudson's Bay Company , North America's oldest company. It has its headquarters in the Simpson Tower in Toronto. In French, the chain is known as la Baie, short for "Compagnie de la Baie d'Hudson"...

 store making it the first Bay/Zellers hybrid store in the HBC family of stores.

Starting at the beginning of November 2010, a pilot project will be launched at certain Zellers stores. This new pilot project now allows customers can now trade-in their video games in-store to receive in-store credit in the Electronics department. The project was expected to be launched in the first week of November 2010 in:
  • Mississauga (four stores)
  • Brampton (four stores)
  • Lindsay
  • Peterborough


Zellers shares a loyalty program, HBC Rewards
HBC Rewards
HBC Rewards is a loyalty program where customers earn points for purchases at Hudson's Bay Company's various chains of stores in Canada, including Zellers, The Bay, Home Outfitters, HBC Telecommunications, and hbc.com, their online store...

, with the Bay
The Bay
The Bay is a chain of 91 department stores that operate across parts of Canada. It is the main brand of Hudson's Bay Company , North America's oldest company. It has its headquarters in the Simpson Tower in Toronto. In French, the chain is known as la Baie, short for "Compagnie de la Baie d'Hudson"...

 and Home Outfitters
Home Outfitters
Home Outfitters is Canada's largest kitchen, bed, and bath superstore, with 69 stores across the country selling bedding, towels, housewares, and other home accessories....

. Customers can collect these points for free every time they shop at an HBC store. Customers can earn double points and even collect points when they shop outside of HBC with an HBC MasterCard issued by Capital One. Customers can redeem points immediately in stores for Hbc Gift Cards and other special promotions which are found at www.hbcrewards.com. Every 80,000 points equals $10 in the store.

Zeddy

Zeddy is a teddy bear
Teddy bear
The teddy bear is a stuffed toy bear. They are usually stuffed with soft, white cotton and have smooth and soft fur. It is an enduring form of a stuffed animal in many countries, often serving the purpose of entertaining children. In recent times, some teddy bears have become collector's items...

 mascot used by Zellers all over Canada. He was first used in the mid-1980s as an advertising campaign, and then rose to his popularity by the early 1990s. The main purpose of Zeddy was to advertise Toyland, the toy section in Zellers stores. Zellers would provide a stuffed Zeddy bear for any child who had a birthday party sponsored by Zellers. There would also be a Zellers employee in a giant Zeddy costume hosting the party. Lineup toys of Zeddy were also created.

Many stores feature a "Zeddy Wheel" ride, which accommodates one young child on a miniature ferris wheel
Ferris wheel
A Ferris wheel is a nonbuilding structure consisting of a rotating upright wheel with passenger cars attached to the rim in such a way that as the wheel turns, the cars are kept upright, usually by gravity.Some of the largest and most modern Ferris wheels have cars mounted on...

-type ride. Some older people got on the ride with no problem. The ride costs $1 and plays carnival music when in use. When no one is riding the wheel, Zeddy says on a regular basis: "Come ride with me! All aboard the Zeddy Wheel!" in an attempt to attract customers. Despite Zeddy being withdrawn as Zellers' mascot , the Zeddy Wheel remained in operation at stores featuring it, and the voice track was unchanged . Some wheels removed the big Zeddy sticker in favour of multiple, small generic stickers.

Zeddy remains used as a baby brand for products such as diaper
Diaper
A nappy or a diaper is a kind of pant that allows one to defecate or urinate on oneself discreetly. When diapers become soiled, they require changing; this process is often performed by a second person such as a parent or caregiver...

s, as well as baby bath products.

During the Christmas and holiday season of 2011, Zeddy was reintroduced in weekly flyers for Zellers' "Festive Finale" sale before closing their stores for Target. Zeddy continues to represent the Toyland section of the store. The character was only used as a static picture. No animated television commercials of him were made during this season, although a cashier named Jason at Zellers mentioned the mascot's name in one of the company's commercials:

External links

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