Half a century of discount retailing

Although I consider discount chain-store retailing the source of much fashion and corporate evil, it can’t be ignored that those types of retailers have changed how we shop today. Surprisingly, most of them were founded, created, or reorganized fifty years ago in 1962.

Sam Walton opened his first Walmart Discount City store in Rogers, Arkansas (the first Wal-marts came to Canada in 1994) and the first Target store opened in Roseville Minnesota (the first Target stores in Canada are scheduled to open next year), and Meijer, a smaller regional chain opened its first modern format store in Grand Rapids, Michigan. Created by established retailers, K-mart was the child of parent company Kresge’s, and nearly went broke in 2002, but has since merged with Sears and become a strong third place in the discount retailer battle for supremacy. The now defunct Woolco was created by parent company Woolworth’s and went out of business in the U.S. in 1983 but remained open in Canada until 1994 when Wal-mart purchased its remaining stores to gain entry into the Canadian market. Wal-mart closed some Woolco locations but reopened others as Wal-marts.

Canadian Fashion Connection – Zellers

Walter Zeller, c. 1950

In 1928 Kitchener Ontario native Walter Zeller founded a discount retail chain of stores. He was bought out by the American owned Schulte-United dime stores allowing the company to expand into the Canadian market. Zeller was made manager of the Canadian division for Schulte-United, but with the onset of the Depression, the  U.S. company found itself over-extended.

In 1931 Zeller bought the Canadian stores from Schulte-United and reopened most of them under the new name of Zellers. His company expanded aggressively and in 1952 acquired the Eastern Canadian Federal dime chain stores. That same year the Zellers empire was effectively taken over by the American retail chain W.T. Grant acquiring 51% of the stock. Walter Zeller died in 1957, but his company continued to grow and prosper.

In the 1960s Zellers expanded into suburban mall locations until by 1976 the company consisted of 155 stores across Canada. W.T. Grant withdrew from Zellers in 1976 and declared bankruptcy in the U.S. Joseph Segal of Fields, a clothing retailer founded in Vancouver in 1950 won a bid to control Zellers by becoming the majority shareholder, but within a few months Zellers reversed the takeover and made Fields a subsidiary. In 1978, Zellers was bought out by the Hudson’s Bay Company, which maintained Zellers as a separate division to broaden its customer base. Zellers continued its strategy of growth, acquiring Towers Department stores (founded 1967) in 1991, some British Columbia Woodward’s store locations (following HBC’s takeover of Woodwards) in 1994, as well as the Canadian stores of the American retailer Kmart in 1998.

Zellers began struggling when Walmart entered the Canadian market, and in 2008 the Hudson Bay Company, Zeller’s parent company, was sold to a U.S. owner. Zeller’s will end its 80 year run this year as the remaining Zeller’s are converted to Target stores.