The death of the great Canadian downtown department store

Large department stores were once prominent in downtowns in North America, today. In Canada, downtowns are becoming devoid of department stores concerning trend of commercial activity leaving urban cores.

// By Craig Patterson

Even though there are still a handful of downtown department stores operating in Canada, the era of the great downtown department store in North America for the most part is over. It happened gradually over the decades as retail changed and suburban malls took hold, while downtowns shifted away from being the main attraction in Canadian cities. With closures came the loss of the glitz and glamour of the downtown department store, which characterized Canadian downtowns for decades as centres of both commerce and entertainment.

Canadian department store origins

Toronto and Montreal were home to some of the first truly big downtown stores, with Toronto being the headquarters for the Eaton’s and Simpsons department store chains and Montreal being home to department store retailers Henry Morgan, Ogilvy’s and Dupuis Freres. Winnipeg was home to the flagship and headquarters of the Hudson’s Bay Company for decades, while Vancouver was the headquarters for the Woodward’s and Spencer’s department store chains. With these came large and sometimes lavish multi-level flagship stores, carrying a wide range of products as well as restaurants and services that built tremendous customer loyalty while becoming an integral part of the community.

Earlier offering

In the earlier years, department stores operated in massive buildings carrying products ranging from fashions to fabrics, to home goods and various food items, sometimes including groceries. Merchandising and the overall look of the store were particularly important in the earlier decades, as was offering exceptional customer service both in the store and even when offering such services as home delivery. Department stores became important parts of people’s lives as well, with top-of-mind awareness due to such activities as hosting parades, fashion shows and other sponsored events, as well as strong marketing that in some cases included catalogues to order products.

Restaurants were also an important component to the downtown department store in decades past, with such iconic restaurants as Eaton’s Round Room in Toronto (now the Carlu), Le 9 in the former Eaton’s in downtown Montreal, the Arcadian Court at Simpsons in Toronto, and various other restaurants found in stores across the country. Restaurants provided a gathering place particularly for women, in a social space that created community as well as a place to use a washroom — a challenge with some of the structured dresses women wore in the earlier 1900’s.

A special outing

Going downtown to shop used to be a special occasion — women might have worn gloves and a hat and would visit the downtown department store to shop as well as to socialize and eat. Sometimes the entire family would go downtown depending on the occasion, and Christmas Window displays were something to marvel over. In-store events were also a draw and brought shoppers back repeatedly — this was at a time before the internet and social media, when it was easier to get people’s attention and to entertain them. Department stores thus thrived as both entertainment centres and centres for commerce, with downtown department store sales in Canada rivalling the biggest stores globally into the 1950’s.

Eaton’s

Eaton’s was the grandest of the Canadian department store chains for decades, and the company also saw substantial retail sales that saw it become the eighth largest retailer in the world by 1940. In 1930, about 58 per cent of all department store sales in Canada were at Eaton’s (either in-store or through catalogue sales), about 7 per cent of all retail sales in the country that year. Eaton’s, through its downtown stores and mail-order business, attracted a wide Canadian demographic that ranged from urban dwellers with money to middle-class workers in smaller communities and lower-income farmers.

The Eaton’s chain opened a network of stores across Canada, including substantial downtown flagships — Toronto was home to the 1.6 million square foot Eaton’s store on Queen Street and Yonge that was demolished in 1977, and its sister store on College Street that had in the 1920’s been earmarked to become the biggest store in the world. Eaton’s opened a million square foot store in downtown Montreal in the early 1900’s, as well as large stores in Winnipeg, Calgary, Edmonton, and Vancouver. It should be noted that many other Canadian downtowns also had Eaton’s stores, ranging from smaller flagship formats in cities such as Saskatoon, to smaller-format downtown stores in cities such as Moose Jaw, Saskatchewan.

Woodward’s

Woodward’s in Vancouver expanded over the years to become a massive store on West Hastings Street, in a 700,000 square foot building that even had a peanut butter factory on the roof. Woodward’s opened a large downtown Edmonton store in the 1920’s and a handful of other downtown locations, though its expansion didn’t pick up until the 1960’s and 70s when suburban shopping centres were being built.

Hudson’s Bay Company

The Hudson’s Bay Company took over and rebranded the Woodward’s chain after its bankruptcy in 1991 — Hudson’s Bay was becoming the dominant department store chain in Canada at the time, as Eaton’s began to retract and lose market share after the closure of its catalogue business, and a recession that resulted in less funds to invest in stores. In the early 1900’s, Hudson’s Bay had grand downtown stores in Winnipeg, Calgary, Edmonton, Vancouver, and Victoria, as well as various other downtown stores in markets such as Saskatoon and Regina.

As retail began to shift significantly in the 1990’s after a recession, the Hudson’s Bay Company’s acquisition of Woodward’s and rebranding of Simpsons created a retail powerhouse that became even stronger with the demise of Eaton’s in 1999. Sears Canada attempted to revive the Eaton’s chain before converting those stores to large downtown Sears locations, which lacked the magic of department stores of decades past. Sears Canada itself closed shop in 2018, leaving Hudson’s Bay as the last traditional department store standing in Canada.

Cause of death

The death of the downtown department store can be attributed to a variety of factors, including the retailers themselves as well as suburbanization and competition impacting downtown retail. Since WW2, the development of highways and suburbs, along with the increased use of cars and the development of suburban shopping centres, have contributed to the demise of the commercial viability of downtowns and their department stores. Increased competition from big-box retailers, discounters, speciality retailers, brands selling direct-to-consumer, shopping centres and the internet have all impacted department stores as well, downtown or otherwise.

Since the beginning of the Covid-19 pandemic, Hudson’s Bay has shut three of its downtown stores in Canada — that includes the iconic 675,000 square foot downtown Winnipeg flagship, as well as a downtown Edmonton store and a store at the Yonge and Bloor intersection in Toronto. The downtown Winnipeg and Edmonton Bay closures could be seen as particularly devastating — at one time downtown Winnipeg was home to massive Eaton’s and Bay department stores that sold millions annually, as well as Holt Renfrew. Now, all are gone. The same can be said for downtown Edmonton, which once had Woodward’s, Bay and Eaton’s stores as well as Holt Renfrew — now Edmonton’s downtown core struggles with any retail vitality, resembling something one might see in the United States with no downtown department stores and little foot traffic whatsoever.

Downtown Regina will be the next city to lose its downtown Hudson’s Bay store, which will be closing in April 2025. While one might not see the loss of a 180,000 square foot store as a big deal, the end of Hudson’s Bay in the city marks the end of well over 100 years of department store history — the downtown core was once home to Simpson’s, Eaton’s, Army & Navy, Hudson’s Bay and Sears, and by next year there will be zero department stores in the city’s core. It’s a story being played out across Canada as department stores shuttered in years past, and now the future of Hudson’s Bay’s remaining downtown stores in Canada are in question.

The glamour of department store glory years is gone with Hudson’s Bay — most of its stores are in terrible shape, and a shocking lack of investment (as well as various periods of not paying vendors) has led to a situation where Bay stores, even in downtown cores, have non-functioning escalators, elevators, and no centralized music. In the spring and summer of 2024, many Hudson’s Bay stores were forced to close due to hot temperatures. Sources said it’s because HVAC supplier bills were not being paid.

That means that the magic and the experience of the downtown department store is for the most part a thing of the past in Canada — Hudson’s Bay’s downtown Toronto store on Queen Street, once the grand flagship of Simpsons, might install moving window displays for Christmas. But the overall retail experience at the store lacks the customer service, restaurants, the interesting merchandise, events, services, marketing, and entertaining experiences that made department stores of the past busy places — and it’s no longer a place for kids to sit on Santa’s lap in December. It’s in stark contrast to the flashy department stores in places like London, Paris and Seoul, which are highly experiential and do incredibly high sales numbers.

Thus, overseas is where one might have to go to find an example of a “great downtown department store”. These stores usually exist in large cities, with cores characterized by a high density of spending power including tourists and residents. They may be one-off stores, or one of a handful of locations — think Harrod’s and Selfridge’s in London, Galeries Lafayette and Le Bon Marché in Paris, Ka De We in Berlin, and others. Cities in Asia also have some very strong stores, including in South Korea where a flagship Lotte or Shinsegae might see sales exceeding a billion dollars annually. Japan is also legendary for its department stores, which still thrive in urban areas along major subway lines. And China is looking to the future with department stores that aim to be relevant in many aspects of customers’ lives via use of tech.

One might not technically have to cross a body of water if flying to Mexico City, however, to experience a great department store. El Palacio de Hierro, which has its 650,000 square foot flagship store in Mexico City’s Polanco area, is a spectacular example of an upscale department store, the likes that a Canadian city could only dream of at this point. The architecturally attractive El Palacio de Hierro building features stunning interiors, interesting product, customer service, food and beverage options, a food hall, and an overall experience certainly not found at Hudson’s Bay. And one hopes that this isn’t the end of Hudson’s Bay, or at least Hudson’s Bay’s downtown Canadian department stores. Already, the historic downtown Calgary flagship location has been downsized to about half of its previous 400,000 square foot size. Given the news of the downtown Regina closure, one might speculate that the downtown Saskatoon Bay store’s days could be numbered as well. Hudson’s Bay recently attempted to block heritage designation of its downtown Ottawa store, possibly signalling intentions of redevelopment. And office redevelopment plans are already in place for the downtown Montreal and Vancouver Hudson’s Bay flagship stores, though both projects appear to have stalled, and a source says that new plans are being drawn up for the Vancouver flagship building’s redevelopment.

Constant change

One consistent thing about retail is that it is constantly changing, particularly with an acceleration of consumer adoption of digital technologies and AI usage. Consumers are shifting spending patterns and forming new habits as the traditional North American department store languishes. Large-format stores such as La Maison Simons will continue to attract shoppers for years to come with good customer service, interesting product, and attractive stores — the same could be said for Holt Renfrew, though both are more fashion retailers.

Hudson’s Bay is the last traditional Canadian department store standing, and the next couple of years will be critical for it to create a new strategy while investing in operations and infrastructure improvements. It’s more critical than many realize, as consumers develop new consumption habits while the Hudson’s Bay chain slides into irrelevancy. There’s a threat that Canada could be left without a traditional department store, downtown or otherwise, if Hudson’s Bay fails.

Those old enough to remember the great North American downtown department store may still have fond memories of what once was – at a time when it could be more relevant than ever as a comprehensive commercial and entertainment destination. One can still travel abroad to experience such retail, begging the question whether or not such stores could ever operate successfully again in Canada or the United States.