Canadian Tire’s plan to purchase Hudson’s Bay assets is a positive move for both iconic Canadian retailers, says one retail consultant.
“The beauty of this is that you have two Canadian brands coming together, one that’s 350 years old and another that’s over 100 years old, and so they share that sense of Canadiana for one thing,” Doug Stephens, founder and CEO of the consultancy firm Retail Prophet, said on CTV’s Your Morning on Friday from Ancaster, Ont.
“So this is a massive opportunity and I think a really smart acquisition and, if anything, kind of a nice allegory for Canadian brands coming together and taking back control of Canadian assets in the environment we find ourselves in today.”
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Canadian Tire Corp. Ltd. announced Thursday that it would buy the intellectual property of Canada’s oldest retailer for $30 million, including the brand trademarks such as the multicoloured stripes motif and coat of arms, houseware brands Gluckstein and Distinctly Home, and apparel line Hudson North, The Canadian Press reported.
The sale, expected to close this summer, requires court approval.
While Stephens doesn’t expect Hudson’s Bay to be revived as the same department store Canadians have known for years, he said the deal could mean the creation of “small format” Hudson’s Bay stores down the road.
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The deal is also a win for Canadian Tire, which owns SportChek, Party City, Mark’s and Pro Hockey Life, because it could boost its offerings in homeware, apparel and sporting goods, he added.
“I think that there’s been so much reinvigoration of this (Hudson’s Bay) brand just over the last year,” said Stephens, who wrote three books on the future of retail. “What an opportune time to invest in an iconic Canadian brand that really gives Canadian Tire a massive amount of runway now into other categories.”
Canadian Tire’s purchase of Hudson’s Bay assets for $30 million is a “bargain,” he said, but Canadian Tire needs to have a “very disciplined approach” when it comes to using the iconic stripes.
“I think there’s going to be a propensity on the part of marketers within Canadian Tire to want to put that on everything initially and I think that could be a mistake,” Stephens said. “They don’t want to commodify it. They want to use it very preciously and very strategically where it makes sense and where it can really grow brand equity.”
The Canadian Tire deal comes as Hudson’s Bay has been struggling to pay its bills and filed for creditor protection in March. The 355-year-old department store chain has been liquidating all its shops because it failed to secure funding.
Watch the video above for the full interview.
With files from The Canadian Press
