January 31, 2013 Comments

Markets were generally down on Thursday. This hardly seems surprising after all the recent gains.

There was unfortunate news for employees at Best Buy / Future Shop and Sears Canada with layoffs announced.

Sears Canada was smart in 2012 to have sold off some leases for huge gains. If they have any long-term leases at good rates on large stores they would likely be best to try to sell the lease holds if they can.

I don’t have any good opinion of Sears Canada. At West Edmonton mall a week after Christmas, I walked through one of their stores at 3 p.m on A Saturday and the floors were full of mud that appeared to be left there from previous days. If they can’t even bother to clean the floors they are toast. Simons of Quebec has opened in West Edmonton Mall. I had seen their store on St. Catherine’s Street in Montreal several years ago and liked the prices and merchandise (like Canada Goose jackets). The new Simons in Edmonton is carved up into boutique areas within the store and in general seems to be a good shopping experience. In retail I think you either have to be a low cost operation (Costco) or go for higher end brands and service. Trying to compete on price while not having low costs is a losing strategy.

I suspect Best  Buy / Future Shop can survive but Sears is probably circling the drain.