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TORONTO — 1. What's in a name?
When Giant Tiger customers nicknamed the discount retailer G.T. Boutique, the moniker was just an inside joke. But company executives got in on it by branding their juniors clothing line under the name. Rather than carrying clothing purchases in bags emblazoned with the company's tiger logo, shoppers now leave the store with chic brown and cream-coloured G.T. Boutique totes that don't reveal their thrifty habits.
In its own move to escape the five-and-dime image, Woolworth's rebranded itself as Venator Group in 1998. The company opened its first 5-cents store in 1879, but over the decades had snatched up major chains such as Footlocker, Champs and the now-defunct Kinney Shoe Corp. "The new corporate name positions the company as a high-performance merchandiser," said company chairman Roger Farah when explaining the change.
2. Everything must go
Before it was swept up by Genuity Capital Markets, Saan was tasked with gutting 93 of its stores. Though it had 61 years of retailing under its belt, the discount chain outsourced the massive job to Great American Group and Hudson Capital Partners, LLC: two U.S. liquidation firms.
Hudson president and CEO James Schaye said his company has closed down discount chains including Kmart and Jamesway.
In a typical 10-week clear-out, discounts are set at 10 per cent and prices keep going lower. Shelves are usually empty when tags read "80 per cent off."
Low-margin goods such as appliances are usually the first to be snatched up, while 36-DDD bras are left until the end, said Mr. Schaye. The company's database tracks competitors and spending culture to guarantee a full clear-out. "There's never anything left," he said. "There is a price somebody will pay for anything."
3. Counterfeiting
While startlingly low prices of Nike shorts or Energizer batteries may send shoppers running to discount chains, the deals are sometimes too good to be true.
"When you're in that business, you're looking for deals," said Brian Isaac, an intellectual property lawyer who has sent several cease-and-desist letters to stores peddling counterfeit goods.
While it was once bogus watches at flea markets, now the fake name-brand product list includes toys, video games and clothing.
"I have no doubt that it's an intentional act and there's willful blindness going on," he said. "If you see anything that's usually sold for $10 sold for $1, the hairs on the back of your neck should be standing up."
4. Discount demise
Yesterday marked the end of Saan after its takeover by Genuity, but it has lots of company in the discount retailer cemetery.
In 1999, once-robust discount chain BiWay reported quarter after quarter of losses. By 2001, its parent, Toronto-based Dylex Ltd., laid off thousands, closed BiWay's stores, and filed for court protection from creditors.
Kmart fell from grace in the '90s after struggling amid competition from powerhouses Wal-Mart Stores Inc. and Target Corp. In 1998, the Hudson Bay Co. bought the Canadian outlets for $240-million. In 2002, Kmart filed for bankruptcy in the U.S.
5. Small-town champ
Giant Tiger seems to be the lone survivor of the major Canadian discount chains, maybe because it's done its best business in small towns. Almost all of its 185 stores are in small towns. Last summer, the chain's outlet in Sutton, Ont. (pop. 6,000) was ringing up sales of 1,200 pairs of sandals and 700 bathing suits a week, earning it the title of top "cottage" property.
"It's also an escape, a trip back to when retail shopping was fun," company president Jeffrey York told The Globe and Mail last year. "You don't have to park in a lot that's the size of four football fields."
