Sears Canada Chief Financial Officer Billy Wong walks away from the Ontario Superior Court in Toronto on July 13, 2017. THE CANADIAN PRESS/Frank Gunn

Small cities brace for pending Sears closures

“It will have a direct economic impact on our community,” said Lyn Hall of Prince George.

At Heritage Place Mall in Owen Sound, Ont., an empty Sears department store would leave a mammoth void. The insolvent retailer is one of the mall’s largest occupants. More than 60 people work in the anchor tenant’s roughly 6,500 square metres, a space big enough to fit 14 basketball courts.

If the court approves Sears Canada’s bid to liquidate its roughly 130 remaining stores, the decision will send shoppers, employees and mall owners in Owen Sound and dozens of other smaller Canadian cities scrambling to find alternative shopping destinations, jobs and tenants.

“My first reaction was: Oh, crap,” said Owen Sound Mayor Ian Boddy of hearing the nearly 30-year-old location, is likely to close soon.

“We’re pretty disappointed.”

A closure will hurt the local economy, he said, leaving dozens unemployed and perhaps prompting fewer people to travel to the region to shop.

Some 4,000 kilometres away on the West Coast, the mayor of Prince George, B.C., echoed those concerns about the Sears store at its Pine Centre Mall.

“It will have a direct economic impact on our community,” said Lyn Hall.

Related: Facebook readers weigh in on Sears

The store employs more than 60 people, he said, and sells goods and services to hundreds of thousands living in Prince George and the surrounding areas.

Both leaders wondered how their local malls would cope with an anchor tenant’s departure.

The bulk of the former juggernaut’s stores are in shopping centres in communities like Owen Sound and Prince George — smaller Canadian cities, where the store may serve a larger geographic area than just those living within the city’s borders.

Of Sears’s remaining 74 department stores, all but one are in shopping malls, most in areas with populations under 400,000 and some well under that.

The malls in these so-called secondary or tertiary markets are likely to struggle to fill the vacant space in the event Sears doesn’t sell its leases or real estate to a third party, said Peter D. Morris, the founder of Greenstead Consulting Group, a real-estate consultancy firm.

“I fear some of those smaller properties may not be able to come back at all,” he said, declining to speculate which of the malls may go under.

Related: Sears Canada asks court for permission to liquidate

There isn’t another big department store chain that requires that much space waiting on the sidelines, he said.

The remaining department store mall locations total more than 10.6 million square feet (nearly one million square metres). That means the select few chains like The Hudson’s Bay Company or Simons that could take over some locations have a plethora of real estate to choose from, said Morris, and likely won’t gobble up anywhere close to all the vacant space.

For malls that don’t draw another single anchor tenant, he said, the easiest solution would be to divvy up the former department store space and woo intermediate-size shops, like athletic retailer Sport Chek or bookstore Indigo.

Another possibility, he said, is that certain restrictions in place due to Sears’s lease, like limiting further development, could disappear along with their corresponding leases and open landlords to a whole range of development possibilities. They could choose to build residential units or a mixed-use space that combines entertainment, recreation and shopping, said Morris.

However, that takes time. Consumers could find other venues with a greater selection to shop at in the interim, he said, and landlords will have to find a way to lure them back after the changes are made.

To make matters worse, for many of the malls, the Sears saga is a recurring problem. In recent history, they’ve grappled with the demise of Zellers and, more recently, Target.

Prince George’s Pine Centre Mall, for example, lost its Target location about two years after it opened when the American chain announced it would shutter all of its Canadian stores. A Lowe’s Canada has since opened in the location.

The Sears vacancy — at 10,400 square metres, or 24 basketball courts — will leave a much larger hole for management to fill.

Mayor Hall said he’s not sure what the mall will do, but it will be quite a challenge.

Follow @AleksSagan on Twitter.

Aleksandra Sagan, The Canadian Press

Just Posted

Craft beer hop farm on Seabird territory preparing for first harvest

Founders have plans to become one of Canada’s largest hops suppliers

UPDATE: Man with gunshot wound drives into ditch on Chilliwack River Road

Serious crimes investigators believe early morning shooting to be targeted

No red flags in expense audit, says former Fraser Health boss who fired Murray

Wynne Powell said report showed need for tighter rules, but didn’t suggest abuse of expense claims

Lower Mainland could see spring flurries

Snow expected at higher elevations

News Recap – March 23

Local climber remembered, speculation tax, avalanche risk and more

B.C. umpire has developed thick skin after 30 years listening to insults

Scott McLaren pays no mind to comments from the cheap seats

Musicians Sarah Harmer, Grimes join B.C. anti-pipeline protests

Musicians are in Vancouver for the Juno Awards on Sunday night

Gas prices likely driving Canadians to US pumps

Customs say cost of fuel, nice weather, spring break are contributing factors of uptick of traffic

VIDEO: Hockey tournament remembers young fan

Hundreds take part in annual Jordan Owens memorial in Lower Mainland

Canadian cities hold March for our Lives events in wake of Florida shooting

Hundreds of people support the massive March for Our Lives event in Washington, D.C.

Health officials called after acid spill near B.C.-Alberta border leaks into creek

Tanker truck crashed south of Dawson Creek, spilling 17,000 litres of hydrochloric acid

Embattled band Hedley plays last show in B.C. before hiatus

About 3,000 tickets had sold for final performance at Kelowna’s Prospera Place

Trudeau to exonerate B.C. First Nations chiefs hanged in 1860s

Prime Minister to absolve Tsilhqot’in chiefs in relation to deaths of 14 construction workers

Most Read