Hudson’s Bay Co.’s revival of Zellers could be an effort to fill underperforming retail space, Mark Cohen, the former chief executive officer of Sears Canada and current professor at Columbia University, said in an interview Wednesday afternoon.
Hudson’s Bay announced the Zellers comeback Wednesday, nearly a decade after the Canadian retailer closed its doors. The company said Zellers is expected to return across Canada in early 2023 as an e-commerce website and with a brick-and-mortar presence in some Hudson’s Bay stores.
“They have quite a few Bay stores with substantially unproductive space. They tried to move Saks Fifth Avenue into the Bay some years ago, [but] that didn’t work out too well,” Cohen said.
Another possible motivation, according to Cohen, would be to create an additional brand to seek investment opportunities.
“This could also be a play to create another brand that they can hive off through an IPO as they’ve done with their dotcom business in both Canada and the U.S., looking for a hapless investor who will see fit to put cash on the line,” Cohen said.
The company said the relaunch of Zellers looks to tap into the nostalgia of the brand. However, Cohen said consumer memory alone may not be enough.
“The nostalgia element may not hold water when they try to open the door,” he said.
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