Canadian department stores

The Globe and Mail (Toronto) quotes a leading mall developer as saying, "The department store as we know it is dead. It will have to reinvent itself."

The article goes on to speculate that the country's two major chains, Hudson's Bay and Sears Canada, may merge and/or be bought up by an American company.

Hudson's Bay is the target of a $1.1-billion hostile takeover bid by U.S. investor Jerry Zucker and is in talks with parties that have expressed interest in countering that bid.

Sears Canada, controlled by hedge fund billionaire Ed Lampert, is believed to be a possible takeover target, as well. There has been speculation that a financial player could emerge to snap up the two retailers, merge them and weed out unwanted stores.

The major problem with Canadian department stores appears to be the same as here in the south: "The problem with full-line department stores is the fact that, in Canada, there has been no innovation. There is no reason to walk into a department store."

Update: We posted this Sunday, and on Monday it was announced that Sears Holding Company has made an offer to buy the stock it doesn't already own in Sears Canada (currently SHC holds about 54%).