Sears Canada is subject to closure, shutting down by January. In a state of being insolvent, Sears has gone through years of declines. The funding manager, Edward Lampert had profited from Sears Canada’s asset sales and ultimately left little money to invest in the chain. Faced with these challenges it had been an uphill battle for Sears to get back on their feet despite the efforts of Mr Stranzl’s [management] group to save the retailer. Sears was just losing so much money.
Retrieved from: http://laithzreikat.com/seo-tips-for-canadian-online-retailers/
Moreover, the problems with Sears’ sale declines were not solely a result of the funding manager’s insufficient investments, but more so the effect of their inability to adapt to the rapidly changing retail environment. Today’s consumer-driven factors are based on the shift of physical stores to online stores, transfer of market share, and the ongoing entry/expansion of luxury brands into Canada. The market is increasing at an incredibly competitive rate and Sears was evidently unable to keep up. As a business, it is expected that they continuously adapt and establish unique value propositions to encourage consumer loyalty. However, since Sears has remained relatively stagnant with their business models and strategies, they’ve begun to fall behind despite its, then-known, leading position in its field in Canada.
Who’s the most at risk?
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With the fall of retail giants such as Zellers, Target, Kmart, and Future Shop to name a few, we can conclude that the market is changing, and the retail environment is becoming ever more competitive and demanding. With a greater number of people buying online and the entry of several luxury brands into Canada, Canadian consumers are turning to other retailers to provide them with the services and products they are looking for. As a result, weaker retailers who are slow to transform are losing their position in the market. Mike Pratt, the president of Best Buy Canada states that “the retail landscape continues to change and our success is dependent upon our ability to evolve along with it.” Therefore business models must be improved frequently. Ultimately, businesses must recognize the new retail landscape we are heading towards and develop newer, up-to-date, market and business strategies in order to compete, stand out, and grow.
In conclusion, the evolution of consumer environment as well as the progression of the retail landscape forces business to review their business model on a consistent basis. They are also expected to consider the rising spending power of Millennials and Generation Z in order to come up with newer and relative value propositions that will keep their businesses moving forward for the years to come.
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References:
Levitt, A. 2011, February 8. Top 3 Sectors For Value Investors. Retrieved from: http://www.investopedia.com/stock-analysis/2011/top-3-sectors-for-value-investors-xlv-ihe-kbe-pgf-vpu0208.aspx
Strauss, M. 2017, October 14. Sears Canada to liquidate as chain readies for shutdown. Retrieved from: https://beta.theglobeandmail.com/report-on-business/sears-canada-granted-permission-to-liquidate-remaining-stores/article36585133/
Why More Retailers Have Announced Store Closings and Bankruptcies in Canada in 2017. 2017, February 15. Retrieved from: https://www.retail-insider.com/retail-insider/2017/2/store-closings-bankrupt
Yonis, S. 2017. Retail giants closing down in Canada. Retrieved from: http://humbernews.ca/retail-giants-closing-down-in-canada/
