Why new Eatons died so fast

When Eatons was reinvented as a slimmer, hipper retail chain in 2000, it marked the event by launching a new commercial campaign during the television premiere of the James Bond movie Tomorrow Never Dies.

Well, yesterday Eatons died. And tomorrow, Canada's few remaining department stores will continue to struggle against the expanding selection of bigger, more economical U.S. specialty stores that are winning over Canadian consumers.

The popularity of U.S. retailers is transforming once legendary Canadian brands such as Eatons, Simpson's and Woodward's into museum pieces, relics of another era when a few chains supplied everything from hockey sticks to snowblowers to most Canadians.

Chicago-based retail giant Sears Roebuck & Co. put the final nail in Eatons coffin yesterday morning with a brief announcement that it would be closing or renaming the seven Eatons stores its Canadian subsidiary bought less than three years ago.

"No one ever thought this could happen so fast," said a Bay Street adviser who was involved in Sears's 1999 purchase of the stores. Reciting the names of U.S. retailers such as Williams Sonoma, Pottery Barn and Target, which are either expanding or considering a move north, the adviser said: "Canada is turning into an adjunct of the U.S. retail market."

Sears barely acknowledged in its announcement yesterday the historical significance of Eatons, a 133-year-old retailer that once controlled 58 per cent of the Canadian department-store market and employed more than 70,000 people. During a 30-minute conference by Sears executives with financial analysts, the closest thing that approached sentiment was a query about whether Toronto's Eaton Centre would keep its name.

Toronto real-estate developer Cadillac Fairview, which owns the Toronto landmark and the Victoria Eaton Centre, said it has no current plans to rename the malls. When Sears finishes converting or closing the stores as scheduled by the end of July, the once formidable Eatons brand name will be relegated to a cultural artifact.

The famous bronze statue of store founder Timothy Eaton that greeted customers at the flagship Toronto store now sits in the Royal Ontario Museum, a background decoration for banquets and weddings.

In literature, "Monsieur Eaton" is the retailer that accidently sent a Maple Leaf sweater to the devoted young Canadiens fan in Roch Carrier's The Hockey Sweater. In song, it is remembered as the store where the late country musician Hank Snow bought his first guitar.

In the end, financial analysts said Eatons was destined for the history books because the old-fashioned business of big department stores makes less sense in the modern new retail world.

Today consumers are increasingly rejecting traditional chains for so called big-box retailers such as Costco Wholesale Corp. and Wal-Mart, which are able to pass on large volume discounts. They remain loyal only to those retailers with distinct or hot brands such as American Eagle Outfitters.

Toronto retail consultant Sam Geist says it was a mistake for Sears to try to take advantage of the Eatons name because the brand was "tired" after a decade of declining quality.

"The name is history already," he said. "The marketplace doesn't miss Simpson's, and the marketplace is not going to miss Eatons. We haven't missed Eatons for the past decade."

Observers said Sears's acquisition of the Eatons stores was based on shaky logic to begin with because it was partly driven by the lure of a big tax break. Sears purchased a total of 19 Eatons stores in 1999 while the company was effectively being liquidated by a receiver after years of losses.