Canadian Tire a good fit for Hudson’s Bay but will need to exercise caution: experts

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With Canadian Tire poised to become the new home for Hudson’s Bay and its brands, retail experts say the company will have to balance the integrity and heritage of the 355-year-old department store with the wealth of possibilities its forthcoming acquisitions will bring.

Whatever Canadian Tire winds up doing, caution is key to keep people enamoured with Hudson’s Bay, said Elisha Ballantyne, a Toronto-based retail consultant.

“You have to use the stripes appropriately,” she said, naming apparel, home decor and seasonal merchandise as ideal fits.

She reasoned those items would pair well with the green, red, yellow and indigo motif dating back to 1779 because Hudson’s Bay has long sold such products.

She thinks there is also room for Canadian Tire to take Hudson’s Bay beyond its usual repertoire. Because Canadian Tire owns camping brand Woods, the stripes would be a natural addition to outdoor staples, she said.

Among the other possibilities the company could consider is opening stores under the Bay or Stripes brand, license the names to other companies to make merchandise or develop its own products under the labels to sell at Canadian Tire or its SportChek, Party City, Mark’s and Pro Hockey Life banners.

Ballantyne doesn’t see the stripes as a match for its automotive products or tools.

Grant Packard, associate professor of marketing at York University, agreed that the Bay brands have their limits.

Canadian Tire will need to stay within them or learn what calculated risks it can take to avoid diluting its allure, he said.

“If (the stripes) are on tennis balls, I think there is that danger,” he said.

“But I’m cautiously optimistic that they have so many opportunities that are a clear fit, that we at least have a few years before they’re going to push themselves into oversaturation.”

Canadian Tire has not outlined its vision for the Bay assets it hopes to acquire by later this summer or even detailed the full breadth of what it wants to buy.

When it announced Thursday that Hudson’s Bay had chosen it as the successful bidder for its intellectual property, it said the deal included the overall Bay name, the stripes and “various company names, logos, designs, coat of arms and brand trademarks.”

The $30-million deal still needs a court stamp of approval to proceed.

Hudson’s Bay’s brands also include houseware lines Gluckstein and Distinctly Home, as well as clothing label Hudson North and discount chain Zellers. Canadian Tire has not said if these labels are part of the package.

“The Stripes will add beautifully to our portfolio of owned brands alongside other Canadian favourites that we have fostered and grown, and The Bay and its brands have long been known for their strength in categories that our customers will seek in our stores and online,” Canadian Tire CEO Greg Hicks said in a statement Thursday.

His company beat out 16 other contenders who made offers for Hudson’s Bay or its assets. Canada’s oldest company started looking for buyers in March, when it filed for creditor protection because it was having trouble paying its bills.

A process to select who will takeover leases is still ongoing. Canadian Tire has said they have made offers for a “handful” of the properties.