It’s true: Zellers is coming back. Here’s what you need to know

Shoppers outside of the Zellers department store at the County Fair Mall in New Minas, Nova Scotia, January, 2012.PAUL DARROW/The Globe and Mail

For many Canadians, the name Zellers conjures up memories of more than just a department store. The flood of nostalgia may include getting high fives from Zeddy the mascot or a family trip to the store’s 1950s-style diner for some Eggs Zenedict.

Now, more than a decade after a Target Corp. deal that saw the end of the beloved Zellers era, the discount retailer is making a comeback. Here’s a refresher on all things Zellers.

A bit of history about the Zellers brand

The Zellers chain was founded in London, Ont., by Walter Zeller in late 1931 as “retailers to thrifty Canadians.” Zellers was a store with something for everyone, with a wide range of product from clothing and groceries, to toys, electronics and furniture, advertising itself as a place where “the Lowest Price is the Law.”

In 1932, it ran with 12 stores. By the mid-1970s, it expanded to 155 stores, when it began launching locations in suburban shopping malls and growing its services to include restaurants in some stores.

The first of these restaurants, known as The Skillet, opened in 1960, eventually rebranding as Zellers Family Restaurant. Many of the restaurants were decorated in a 1950s-style, complete with teal vinyl booths, checkered floors, a jukebox and featured cheap food like the 3D Breakfast Club for $7.99.

HBC to resurrect discount retailer Zellers with outlets inside Bay stores by next year

Zeddy the mascot

Zellers mascot, Zeddy, is a pantless light brown bear who sported a cropped T-shirt. His job was to advertise the Zellers toy section (officially named Toyland, of course) and he was always ready to have his picture taken. He skyrocketed to fame in the early 1990s, and many Zellers stores carried Zeddy-themed rides like a mini-ferris wheel called the Zeddy Wheel ride.

Zeddy, however, came into tough times during the Zellers liquidation campaign. In one ad, the teddy bear was abandoned in the middle of the woods and left to fend for himself as part of an online contest to adopt him. He was eventually adopted by Camp Trillium – now called Campfire Circle – which supports children with cancer.

The downfall of Zellers

With the arrival of Walmart in 1994, Zellers struggled to compete, even as HBC continued to expand by buying up Towers Department Stores, Woodward’s and Canadian locations of American chain Kmart, converting many of them to Zellers stores.

By the early 2000s, Zellers was faltering. By 2004, rumours that HBC would sell the stores had begun making their rounds. Three years after Richard Baker’s NRDC Equity Partners acquired HBC in 2008 for $1.1-billion, the company inked a deal with Target to sell the majority of the Zellers store leases – 189 in total – for $1.8-billion.

Many of the 64 locations that weren’t converted to Target department stores closed in March, 2013. With an average of 100 employees per store, it was estimated that roughly 6,400 Zellers employees lost their jobs. The stores final two locations in Toronto and Ottawa were shuttered in January, 2020.

With a healthy dose of humour, Zellers says goodbye

What’s the deal with the comeback?

Not much is known about the deal. Hudson’s Bay Co. made the announcement on Wednesday. Starting early next year, the retail company said it is planning to open Zellers locations within its The Bay department stores, adding that Zellers will debut “a new e-commerce site.”

There had also been subtle hints of the return of Zellers. Last year, HBC launched two Zellers pop-ups at the Galeries d’Anjou mall in Montreal and inside a Hudson’s Bay in the GTA’s Burlington Centre.

HBC did not specify how many Zellers locations it plans to open, but said in a statement that Zellers will have a presence in major cities across Canada. HBC also did not say how much floor space the Zellers shops would take up inside its department stores, since plans for the locations are still in progress.

Will the Zellers comeback be a success?

While some Canadians are rejoicing over the news, analysts are skeptical.

“It’s going to be, at best, a niche play,” said retail analyst Bruce Winder, adding that the average frugal shopper has “moved on” in the absence of Zellers.

“The discount market has really evolved since they left. Walmart has gotten bigger and stronger. Amazon has gotten much bigger in Canada and Costco has strengthened. Dollarama has strengthened, Dollar Tree has expanded and Giant Tiger has expanded and got stronger, so I really don’t see much room left for them,” he said.

Mr. Winder noted the nostalgic value of Zellers may initially help capture some of the market, but “the tough part is taking that nostalgia and converting it to a meaningful business model.”

With reports from Susan Krashinsky Robertson.

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