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The return of Zellers: Hudson's Bay to resurrect Canadian discount retail chain

·3 min read

Canadian department store Zellers hopes to make a comeback next year, a decade after the discount chain shuttered most of its locations., brand owner Hudson’s Bay Co. said Wednesday.

Zellers will debut a new e-commerce website and expand its brick-and-mortar footprint within select Hudson's Bay department stores across the country in early 2023, HBC said.

The relaunched discount retailer will offer "a digital-first shopping journey that taps into the nostalgia of the brand," the company said.

“We know how special Zellers is in the hearts and minds of people in Canada," said Adam Powell, Zellers' chief business officer. “Zellers is a brand deeply rooted in the Canadian experience."

The return of Zellers comes as soaring inflation drives consumers to discount retailers in search of lower prices and fierce competition from existing stores like Walmart, Dollarama and Giant Tiger.

Reviving the brand when people are looking for ways to save money could help Zellers capture market share in part through "the illusion of more competition," said Vass Bednar, executive director of the Master of Public Policy in Digital Society at McMaster University.

"We're in this inflationary period and people are more price conscious than ever before," she said. "Shoppers who remember the Zellers brand will associate it with saving money."

The planned resurrection of Zellers also comes amid an ongoing lawsuit over a Quebec family's use of the Zellers brand.

The Moniz family is behind various recent trademark applications and corporate registries, including Zellers Inc., Zellers Convenience Store Inc. and Zellers Restaurant Inc.

In a statement of claim filed last fall, HBC accused the Moniz family of trademark infringement, depreciation of goodwill and so-called passing off — the deceptive marketing or misrepresentation of goods.

Retail analyst Bruce Winder said the reintroduction of Zellers likely stems in part from the lawsuit.

"It's most likely related to the legal issue with the trademarks," he said. "For Zellers to really say, 'This is ours,' they have to show that they're using it."

Zellers will face an uphill battle from entrenched competitors in the discount retail marketplace, he said.

"It could be a niche opportunity and I hope it works, but I just don't see it coming back successfully en masse."

The Zellers department store was founded in 1931 and acquired by HBC in 1978.

It operated as the discount division of its flagship Hudson's Bay department stores, with the slogan "Where the lowest price is the law."

The store hit its peak of about 350 locations in the late 1990s before losing ground to big box competitors such as Walmart.

In 2011, HBC announced plans to sell the majority of its remaining Zellers leases to Target Corp., closing most stores by 2013.

The retailer kept a handful of Zellers locations open as liquidation outlets until 2020.

The company recently launched pop-up Zellers shops inside Hudson’s Bay department stores in Burlington, Ont. and Anjou, Que.

This report by The Canadian Press was first published Aug. 17, 2022.

Brett Bundale, The Canadian Press