At Zellers, the lowest price is no longer the law. Hudson’s Bay Co. rebooted the discount brand as a special section in a dozen of its The Bay department stores in March.

Retail strategist Lisa Hutcheson was at the Scarborough Town Centre Zellers on opening day. The relaunch impressed her, as a marching band led keeners who lined up ahead of time through the Bay and up the escalator to explore Zellers’ “well-merchandised” displays, which featured a “good” and “interesting” product assortment, she said.

“There was lots of things I liked,” Hutcheson said. “And lots of things that I sort of scratched my head at.”

Hutcheson said she found it jarring to see the sprawling brick-and-mortar Zellers stores from her memory reduced to a 10,000-square-foot, store-within-a-store concept. Also puzzling, she said, was an apparent laxness to restocking hot-selling items, such as Zellers-branded clothing, and inconspicuous checkouts.

Ultimately, she’s unsure whether HBC’s resuscitated discount brand will hold its own against a new array of retailers that has taken over the value segment, including Dollarama Inc., Walmart Inc. and TJX Companies Inc.’s HomeSense and Marshalls brands.

“I think it’s a short-term strategy,” Hutcheson said of HBC’s decision to revive Zellers after a 10-year hiatus. “I would call the relaunch a success. I just don’t know — is it three months? Is it six months? What’s the next step because I think keeping it as just this department isn’t sustainable.”

“Zellers is a value retailer, filling a gap in the Canadian marketplace,” a spokesperson said by email. “Canadians will tell us how to grow. We are being thoughtful in where and how we open, with a scalable approach that allows us to listen to customers, test and learn, and build accordingly.”

In March, Report on Business magazine published a feature on HBC in which the company’s president, Sophia Hwang-Judiesch, said that winning over younger Canadians was her top priority. Regarding Zellers, she stressed the revamp would offer “Target-esque” products with branding that emphasized “value at a phenomenal price.”

But it’s been a while since value shoppers have been on the Bay’s radar. The company’s product assortment targets affluent shoppers with a focus on millennials, said Bruce Winder, a retail analyst and author who was a Zellers merchandise manager at HBC’s head office in Brampton, Ont, between 2009 and 2011. The pop-ups at the Bay stores might attract a new audience, but Winder said there was reason to wonder what happens when the nostalgia buzz wears off. 

“I’m not convinced nostalgia is a business. I think it’s a good PR campaign,” said Winder. “People are going to go there to check it out, but once they’re done checking it out, are they going to come back? That’s the million dollar question.” 

Source: Financial Post