Hudson’s Bay to resurrect discount chain Zellers

Canadian department store Zellers hopes to return next year, a decade after the discount chain closed most of its stores.

Hudson’s Bay Company announces that Zellers will launch a new e-commerce website and expand its physical presence in select Hudson’s Bay department stores across the country in early 2023.

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The company says the relaunched Zellers will offer “a digital shopping journey that taps into the nostalgia of the brand.”

In an email to CBC News, a Hudson’s Bay spokesperson did not confirm the location of the new Zellers stores.

The initial inventory will include household items, furniture, and toys, with clothing to be introduced later in the year. The company also plans to launch a private label, according to the statement.

Lawsuit against the Zellers brand in progress

Zellers’ return comes as soaring inflation pushes consumers to buy discounts from retailers looking for lower prices. This follows Tuesday’s announcement from Hudson’s Bay that outdoor gear retailer MEC will open stores in three major Bay Area stores this fall.

It also comes amid an ongoing lawsuit over the use of the Zellers brand by a Quebec family.

The Moniz family is behind a variety of recent trademark and business registry applications, including Zellers Inc., Zellers Convenience Store Inc., and Zellers Restaurant Inc.

In a statement filed last fall, HBC accused the Moniz family of trademark infringement, goodwill deprecation and so-called deception – deceptive marketing or misrepresentation of goods.

Bruce Winder, a Toronto-based retail analyst, said he believes Zellers’ revival was partly a reaction to the lawsuit.

“They need to demonstrate that they still care about the brand and there’s no better way to do that than to open stores,” Winder said.

Mixed reaction from consumers and retail strategists

A Zellers storefront advertises its closure in 2013. Consumers and retail strategists offered mixed reactions after the Hudson’s Bay Company announced it would resurrect the discount chain this year. (Radio Canada)

CBC News heard a range of responses from consumers with good — and not so good — memories of shopping at Zellers. Some are hoping for the return of the in-store restaurant and the brand’s mascot, Zeddy.

Others expressed hope that Zellers could compete with big-box stores such as Walmart and Giant Tiger.

“I always thought Zellers was the store for everyone, and I was very disappointed to see it go,” said Diane, a longtime resident of Toronto’s Richmond Hill neighborhood.

“And then we had Target. He didn’t meet Zellers standards. I would love to see him come back. I think it would serve a lot of people with different incomes.”

Others recalled poor customer service experiences, a shortage of advertised products and understaffed stores. Some have expressed concern that the store does not carry locally made products.

Mark Satov, a strategy consultant at Satov Consultants based in Toronto who has worked with Zellers in the past, is cautiously optimistic about the resurrection of the brand.

“They probably have to spend a little less to resurrect this brand than to create a new brand,” he said.

Satov added that he doesn’t think the brand has a negative connotation among consumers – but it was not a successful business, which is why it was sold, he said.

“I think it’s a good call. I’m not sure it’ll be a home run, but let’s see.”

Others have lower expectations. While the move is intended to capitalize on consumer nostalgia for the Zellers brand, many will associate the company with a negative shopping experience, according to Craig Patterson, founder and publisher of retail site Retail Insider.

“I think people are just thrilled to get something that was in their life in the past, and it could be almost anything. But I’m not sure this move from Zellers will be good for Hudson’s Bay in the long run,” Patterson said. “It really remains to be seen how it is executed.”

“I think there’s going to be an uphill battle to grow this new brand and build these boutiques and stores, and this whole new e-commerce division for Hudson’s Bay Company, which is, again, an expansion for this business.”

Most stores closed in 2013

Hudson’s Bay has launched a pop-up Zellers store at Hudson’s Bay department stores in Burlington, Ontario and Anjou, Quebec in 2021. (Anis Heydari/CBC)

Zellers department store was founded in 1931 and acquired by HBC in 1978.

It operated as the discount division of its flagship Hudson’s Bay department stores, with the slogan “Where the lowest price is the law”.

The store reached its peak of around 350 locations in the late 1990s, before losing ground to big box competitors such as Walmart.

In 2011, HBC announced plans to sell the majority of its remaining Zellers leases to Target Corp., closing most stores by 2013.

The retailer has kept a handful of Zellers stores open as liquidation outlets through 2020.

The company launched a Zellers pop-up store in Hudson’s Bay department stores in Burlington, Ontario, and Anjou, Quebec in 2021.

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