There are few things that really get the passive Canadian public’s blood boiling, but losing the country’s oldest and most historically significant company to an American is definitely one of them.
Canadians have been unusually vocal about South Carolinian business tycoon Jerry Zucker’s $1-billion takeover deal of the Hudson’s Bay Company. On Jan. 26, the 335-year-old Canadian company, which operates The Bay, Zellers and Home Outfitters, was handed over to the American CEO of Maple Leaf Heritage Investments.
CBC News has posted numerous letters from Canadians about the foreign takeover. “We have lost another landmark.” “I feel the absolute devastation of this transaction.” “I can’t begin to put into words the sorrow I feel today,” are some of the comments from Canadians coast to coast.
But if Canadians were concerned about maintaining domestic ownership of the company that laid the foundations for their nation, it did not show in their consumer habits.
Canadians have been choosing cheaper giant foreign competitors like Wal-Mart or smaller specialty stores like LaSenza over The Bay for years.
Not only have these consumer choices let the iconic Canadian retailer slip into the hands of an American, but they have made this recent change to foreign ownership one of the best things to happen to the deteriorating corporation in a long time.
According to Statistics Canada, retail sales have increased across the country over the last eight years. Between 2000 and 2004, sales at large retailers increased from $72 to $92 billion.
But The Bay has failed to benefit from increased sales and has been suffering from financial problems for a long time. Sales have dropped during the last 10 financial quarters and The Bay lost more than $25 million in 2004 alone. In 2003, Zucker began accumulating the company’s stocks for $9 a share. In 1997, the same stocks were selling as high as $38.
Outrage from the Canadian public is understandable but directed at the wrong target. Canadians should be blaming themselves for the loss of the iconic corporation and be relieved it has not shared the same bankrupt fate as Eaton’s.
It might be hard to get past Zucker’s citizenship, but if the American stands by his word, he may be the solution to turning around The Bay’s dismal financial record.
Zucker’s spokespersons have adamantly told the media that his intentions are to keep the company intact, and that no current plans exist for job cuts or store closures. Sure, there will be changes but change is exactly what The Bay needs right now to lure back Canadian shoppers.
Although it would have been easier on that nation’s pride to see a Canadian take on the enormous task of revitalizing the country’s historic company, nobody was willing to do it.
Canadians have abandoned The Bay, and if the country honestly cares about ensuring its future, they must reflect this in their consumer habits.