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Leon抯 to take over eight Sears Home leases across CanadaWednesday, March 02, 2016 > 09:43:35
(Home Goods Online)
Leon’s Furniture has achieved one of its long desired goals and planted its flag in British Columbia, after assuming eight leases from Sears Canada, including four in this country’s westernmost and currently fasting growing province. This makes the company a truly national retailer for the first time in its 107-year history.
All eight locations in the deal are part of Sears Home, the freestanding furniture, mattress, major appliance and electronics specialty store network created by Sears Canada in 1995.
Included in the deal were three locations in the Greater Toronto Area (GTA) as well as one in Moncton, New Brunswick, which will become Leon’s first corporately-owned location operating under The Brick banner in that province. The GTA stores are located in Brampton, Etobicoke and Mississauga.
The Brick already has 27 stores in British Columbia, where it has been operating for almost 30 years. The new Leon’s stores will be in Abbotsford, Langley, Richmond and Victoria.
“This transaction represents a significant opportunity for Leon’s to strengthen its leading position in existing markets around the GTA as well as to enter highly desirable locations in Greater Vancouver,” said Edward Leon, president and chief operating officer of the publicly-held and family-managed retailer.
“This is a unique opportunity for us to expand our market share and lay the groundwork for continued growth. This move brings the Leon’s banner within reach of Canadians coast-to-coast for the first time ever,” he continued.
“Our Leon’s and The Brick banners serve distinct customer segments and we are confident that by expanding both banners in a measurable fashion, we will continue to drive significant value creation for shareholders over time. The locations we are assuming have been carefully selected to fulfill Leon’s strategic mandate to have a meaningful presence in all key areas of the country,” he added.
These eight stores have an average of 43,000 square feet of selling space. Leon estimates each will require capital improvements costing in the range of $300,000 to $500,000, for a total potential investment of $4 million.
However, according to a spokesman for Sears Canada, no money changed hands – Leon’s will simply take over the leases – seven of them on June 1. The lease for the Brampton, Ontario unit will be assumed on July 1.
Sears Canada expects to vacate each unit about 10 days before the transfer while Leon’s expects to re-open under its banners by late September, 2016.
Leon’s also announced it has secured 75,000 square feet of warehouse space to support the short-term needs of the new stores in B.C. It plans to have a new 434,000 square foot state-of-the-art distribution centre in operation to support both Leon’s and The Brick stores in B.C. by August 2017.
Meanwhile, Sears Canada executive chairman Brandon G. Stranzl said the arrangement will strengthen the multi-channel retailer’s efforts to make its core brick-and-mortar store footprint more productive.
“We are working on rationalizing our store network to ensure our core store physical footprint is highly productive,” he said, adding Sears Canada intends to convert customers from poor performing stores to its better performing stores, giving it more business over less square footage.
“In the case of these eight stores, we have communication plans in place to invite all Sears Home customers to our nearest full-line department store where they can continue to shop for major appliances, mattresses, furniture, home décor, and outdoor seasonal products,” he continued.
According to Sears Canada’s vice president of communications Vincent Power, recent conversion projects in Halifax and Laval were quite successful thanks to a targeted marketing and communication campaign targeting Sears Home customers, who were persuaded to shop at the full-line department store – and every online – for their big ticket needs.
He also noted both mattresses and major appliances are carried by the full-line department stores and with the decision to take electronics off the floor there is more than enough space to ensure each outline as an adequate furniture presentation. “We’re working to make the space we have as efficient as possible,” Power said.
In recent years, Sears Canada has been quietly shrinking its Sears Home network, although Power stressed the multi-channel retailer remains committed to the concept. At the beginning of 2014, there were 48 stores in the chain. With the expected closure of the store in Saskatoon in April, there will be 31 left when the transfer to Leon’s is complete.
Meanwhile, Leon’s will see its national store count rise to 309.