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article imageU.S. retailers invasion of Canada stirs competition

By Larry Clifton     Jul 21, 2014 in Business
Canadian retailers, already hurting from diminished sales, will soon have to compete with six additional large U.S. retail chains looking to expand their customer base in Canada.
Already, many Canadian retailers are struggling to keep their heads above water. Montréal-based retailer Le Chateau has been under pressure from dwindling sales and high inventories for several consecutive quarters.
Tabi, a midsize retailer catering to women shuttered all 76 of its locations in late 2011. Meanwhile, Montréal’s well-known retailer Jacob has closed about third of its stores in recent months, and Please Mum, a Vancouver chain selling children’s apparel, shuttered 68 of its 90 stores in 2014.
Larger well-known retailers have been hit as hard. Sears Canada is facing a major effort to reorganize its business in order to keep up with the demands of modern retail.
Analysts say Canadian retailers will continue to be rocked by competition from the U.S. and overseas. Canadian consumers are not likely to mind the influx of American retailers in their malls as it represents more places to shop often at lower prices. Canadian retail trends show that many times, American companies deliver the same products for less than their Canadian counterparts.
Below is a list of the six U.S. chains with plans to open and locations throughout Canada has published in CBC/Business:
• Target The discount chic chain bought the leaseholds for 189 Zellers locations from Hudson's Bay Co. in late 2010, with plans to convert most of them to Target locations in the near future. After some legal headaches surrounding the use of their name in Canada, Target is set to open as many as 135 locations across Canada later this year.
Marshall’s The U.S. owner of outlet chain TJ Maxx quietly set up shop in Canada recently with very little fanfare. The company currently has 12 locations across Ontario, but it plans on adding to that stable in the near future. Similar to Canadian chain Winners, Marshall’s business model is to sell excess designer clothes at drastically reduced prices.
J Crew The upmarket clothing chain launched its first Canadian location in August 2011. After weathering complaints about higher prices in Canada compared with American stores, the chain slowly expanded its footprint. In February, three new locations were added in Vancouver, Edmonton and Toronto.
Bloomingdale's The high-end department store chain has set its sights on the Canadian market and is working with Hudson’s Bay Co. to bring the brand across the border. The move would bring the chain into the Bay’s retail chain as a "store within a store" concept, an expansion that could begin as early as this fall.
Nordstrom The luxury retail behemoth had been shopping for Canadian space for over a year, and the closure of a few Sears locations came as an opportunity to acquire prime real estate. Over the next few years, the upscale store is geared to set up shop in Vancouver, Toronto, Ottawa and Calgary.
Tanger Outlets In early 2011, Tanger signed a $1 billion deal with Canada's largest REIT (and mall-owner) RioCan to bring Tanger Outlet centres to Canada. While similar to outlet malls that most Canadian suburbanites would be familiar with, Tanger outlets tend to be even larger. The first glimpse of Tanger's Canadian model is the outlet mall in Cookstown, Ont., north of Toronto.
Increased retail competition from the U.S. means Canadians will spread their loonies amongst many more stores owned by successful competition-hardened retail chains from across the border.
On the other hand, the profitability of Canadian retailers will suffer as consumer products are priced less expensive to attract a shrinking share of the retail market.
More about US retail canada, us retail chains, customer base canadian, Sears canada, jacob canada
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