Sears Canada Chief Financial Officer Billy Wong walks away from the Ontario Superior Court in Toronto on July 13, 2017. THE CANADIAN PRESS/Frank Gunn

Small cities brace for pending Sears closures

“It will have a direct economic impact on our community,” said Lyn Hall of Prince George.

At Heritage Place Mall in Owen Sound, Ont., an empty Sears department store would leave a mammoth void. The insolvent retailer is one of the mall’s largest occupants. More than 60 people work in the anchor tenant’s roughly 6,500 square metres, a space big enough to fit 14 basketball courts.

If the court approves Sears Canada’s bid to liquidate its roughly 130 remaining stores, the decision will send shoppers, employees and mall owners in Owen Sound and dozens of other smaller Canadian cities scrambling to find alternative shopping destinations, jobs and tenants.

“My first reaction was: Oh, crap,” said Owen Sound Mayor Ian Boddy of hearing the nearly 30-year-old location, is likely to close soon.

“We’re pretty disappointed.”

A closure will hurt the local economy, he said, leaving dozens unemployed and perhaps prompting fewer people to travel to the region to shop.

Some 4,000 kilometres away on the West Coast, the mayor of Prince George, B.C., echoed those concerns about the Sears store at its Pine Centre Mall.

“It will have a direct economic impact on our community,” said Lyn Hall.

Related: Facebook readers weigh in on Sears

The store employs more than 60 people, he said, and sells goods and services to hundreds of thousands living in Prince George and the surrounding areas.

Both leaders wondered how their local malls would cope with an anchor tenant’s departure.

The bulk of the former juggernaut’s stores are in shopping centres in communities like Owen Sound and Prince George — smaller Canadian cities, where the store may serve a larger geographic area than just those living within the city’s borders.

Of Sears’s remaining 74 department stores, all but one are in shopping malls, most in areas with populations under 400,000 and some well under that.

The malls in these so-called secondary or tertiary markets are likely to struggle to fill the vacant space in the event Sears doesn’t sell its leases or real estate to a third party, said Peter D. Morris, the founder of Greenstead Consulting Group, a real-estate consultancy firm.

“I fear some of those smaller properties may not be able to come back at all,” he said, declining to speculate which of the malls may go under.

Related: Sears Canada asks court for permission to liquidate

There isn’t another big department store chain that requires that much space waiting on the sidelines, he said.

The remaining department store mall locations total more than 10.6 million square feet (nearly one million square metres). That means the select few chains like The Hudson’s Bay Company or Simons that could take over some locations have a plethora of real estate to choose from, said Morris, and likely won’t gobble up anywhere close to all the vacant space.

For malls that don’t draw another single anchor tenant, he said, the easiest solution would be to divvy up the former department store space and woo intermediate-size shops, like athletic retailer Sport Chek or bookstore Indigo.

Another possibility, he said, is that certain restrictions in place due to Sears’s lease, like limiting further development, could disappear along with their corresponding leases and open landlords to a whole range of development possibilities. They could choose to build residential units or a mixed-use space that combines entertainment, recreation and shopping, said Morris.

However, that takes time. Consumers could find other venues with a greater selection to shop at in the interim, he said, and landlords will have to find a way to lure them back after the changes are made.

To make matters worse, for many of the malls, the Sears saga is a recurring problem. In recent history, they’ve grappled with the demise of Zellers and, more recently, Target.

Prince George’s Pine Centre Mall, for example, lost its Target location about two years after it opened when the American chain announced it would shutter all of its Canadian stores. A Lowe’s Canada has since opened in the location.

The Sears vacancy — at 10,400 square metres, or 24 basketball courts — will leave a much larger hole for management to fill.

Mayor Hall said he’s not sure what the mall will do, but it will be quite a challenge.

Follow @AleksSagan on Twitter.

Aleksandra Sagan, The Canadian Press

Just Posted

Questions remain following Friday crash

Questions remain following Friday’s dramatic crash on Sooke Road. The three-vehicle incident… Continue reading

Final push to fund new ultrasounds at Victoria hospitals

Victoria Hospitals Foundation’s Beneath the Surface campaign nears goal of $500,000

VIDEO: Surveillance camera catches Sooke Rd crash

New details emerge into crash that sent three people to hospital

Shovels in the ground for Sooke library by 2019?

New timelines announced for new library construction

Big Brothers Big Sisters seek mentors for kids who need a guiding light

September marks National Big Brothers Big Sisters of Canada Month

B.C. RCMP turn to Const. Scarecrow to shock speeders into slowing down

New addition will watch over drivers from a Coquitlam median for first-of-its-kind pilot in Canada

Admitting mistakes is the first step

On Friday afternoon a dramatic three-vehicle crash took place on Highway, an… Continue reading

B.C. home to 1/3 of Canada’s overdose deaths in first 3 months of the year

There were 1,036 overdose deaths in the first three months of the year, with 94 per cent accidental

B.C. candidate moves from hospice care to council race

He beat terminal cancer twice and entered hospice when he decided to run for council.

Canadian tobacco exec pushes back against vaping health concerns

A warning from Interior Health about the unknown health risks of vaping is getting a partial rebuke

Ministry of Agriculture commits $300,000 to help B.C. farmers obtain land

B.C. Land Matching Program supports access to affordable farmland for young farmers

Canadian air force short 275 pilots

Attrition outpaces recruitment and training claims Air Force

Teacher suspended after physically shushing, saying ‘shut up’ to student

Grade 5 student reported feeling ‘confused and a little scared’

A B.C. society helps to reforest Crown land after wildfires

Forest Enhancement Society of BC focuses on wildfire mitigation and the reforestation

Most Read