Towers Department Stores History

• Towers Marts of Canada brought the chain discount store concept to Canada in November of 1960. A crash building program would open 12 discount plaza units of 100,00 square feet each in just over two year. In Quebec, the stores went under the Bonimart banner.
  
  The first store was opened at the corner of Lawrence Ave. East and Midland Ave. Each selling department within a Towers store was operated as a licensed concession.
   
• Read Elayne Freeman's first hand account of opening day here.

• Talks are underway to open gasoline outlets at Towers Department Store locations. MORE

• A new store opens (the third) at Bloor and Dundas Sts. On the opening day, the first 1,000 customers were sold silver dollars at 80 cents each. Seven sets of triplets, ranging in age from 3 to 24, took part in the opening ceremonies. They helped Ben Rosenberg, president of Towers Marts and Prooerties Ltd. fill a time capsule and photographs and newspapers. The capsule will remain buried until 2062. [Editor's note: I wonder what happened to it?} Donald Jaffey, president Allied Towers Merchants, said that centralizing warehousing, bookkeeping and inventory control will help streamline merchandising operations. MORE
   
• Allied Towers Merchants Limited offers shares in this May 23 announcement in the Star. MORE

• Shares of discount department store operator Towers Marts and Properties Ltd. drop from a high of $9 to a level of $1 per share. MORE
   
• Discounter Ben Rosenberg, president of Towers Marts and Properties store chain, announces March 6 that Towers is in receivership. Twelve of Towers' 13 stores are making money, he says. Attempting to cut costs, he announces that Allied Towers Merchants Ltd. has just taken over merchandising, cashiering and other in-store operations. MORE
   
• The Star reports on May 29 that Allied Towers Merchants suffered a $268,492 net loss for 1962. Three months earlier, Allied Towers assumed the merchandising functions formerly done by Towers Marts and Properties. MORE
   
• Bankruptcy trustee J.L. Biddell comments on the affairs of Towers Marts and Properties Ltd. "(They are) the most complicated matter I have ever been connected with." About 120 creditors consider a proposal that would keep the company in business. MORE

• M.W. Book is elected president and general manager of Allied Towers Merchants. MORE
   
• Maxwell Goldhar is appointed president and a director of Towers Marts and Properties Ltd. MORE
   
• Sales of Allied Towers Merchants Ltd. in the first seven months compare favourably with 1963 figures. MORE

• Oshawa Wholesale Makes Offer For Allied Towers Share Back
  (Montreal Gazette, December 4, 1965)
  
  Oshawa Wholesale Ltd. and W. L. Atkinson, a director of Allied Towers Merchant Ltd., have made an offer of 60 cents a share for 753,750 shares of Allied Towers held under voting trust agreement by Towers Marts & Properties Ltd.
  
  The offer is subject to approval of Towers Marts & Properties shareholders at a meeting to be held Dec. 13. It is conditional on tendering of at least 250,000 shares and will expire Dec. 15.
  
  At last report Allied Towers Merchants had 1,731,516 common shares outstanding of 3,000,000 authorized.
  
  Allied Towers Merchants operates on a rental and lease basis the stores of Towers Marts & Properties in Ontario and Quebec Towers Marts wnet into receivership in 1963. MORE

• Oshawa diversified into general merchandise retailing in January, 1966 when it purchased a 75% interest and took over management of the six-store Rite-Way Department Store chain, which operated throughout Ontario. A year later the company acquired the rest of Rite-Way's shares and purchased Allied Towers Merchants Ltd., another department store chain, combining the operations of the two under one management group.

• In 1968 Oshawa purchased Rockower of Canada Ltd., a firm which operated the men's and boys' departments in 26 of Oshawa's Towers stores.

• The Richelieu Valley will have its first one-stop regional shopping centre... Place St. Jean, a $4,300,000 fully enclosed shopping complex, will contain a discount department store... It will contain a 66,000 square-foot Les Galeries Towers department store...  MORE

• Sudbury City Centre, with retail, hotel and offices developed by Marchland Holdings, opens. It is built around a Towers-Food City combination.

• There are ten department store chains in Ontario and a handful of independents. The big ten are Bay, Eaton's, Gem, K-Mart, Miracle Mart, Riteway, Simpson's, Simpsons-Sears, Towers and Woolco.

• Toronto Star for October 5 reports that Eaton's, Simpsons, The Bay and Towers will be open for the Thanksgiving Monday. MORE
   
• In the October 27 edition of the Star, "a fight's shaping up over extended store hours." MORE
   
• In Canada, the Oshawa group introduces a hypermarket (department and grocery store together) near Montreal and calls it Hypermarché.
  
  It was 268,000 square feet, with 60 checkouts and 3,000 parking spaces. It was not a success. These “malls without walls” have a high learning curve for their operators, particularly if they are going from food to general merchandise.

• Falsely accused shoplifter at Towers Brantford store awarded over $80,000 by the Ontario Supreme Court. MORE
• Multi-Malls opens in Blandford Square (just outside Woodstock) and in 1978 opens Norfolk Mall (just outside Tillsonburg).
  
  A decade earlier, Towers/Food City combinations had proceeded Multi-Malls, with little trouble and little debate. But the Oshawa Group anchors were not accompanied by small stores in Woodstock (1968), Peterborough (1965), St. Catharines (1965), Owen Sound, Westminster (1967), Niagara Falls (1965), Brantford, Aldershot (1968), and elsewhere. Indeed, the Towers department store was basically a group of jobbers (independent merchants), so no more specialty stores were needed (or advisable, from a landlord perspective) under the Towers/Food City combination.
  
  A blizzard of government restraining orders were issued against Multi-Malls: in the case of Blandford Square, one was issued for the wrong location and by the time the Provincial government noticed its mistake, Multi-Malls had its building permit.

• The Kipling and Queensway Towers store is robbed by two men who climbed to the roof of the store and down a vent. Over $5,000 in men's watches and clothes are taken. MORE
   
• Coles Book Stores Ltd., once had a connection with Towers - they operated the toy, games and stationery concessions. MORE

• Towers Department Stores joins with Hudson's Bay Co., the Great Atlantic and Pacific Co. of Canada, F.W. Woolworth and Gambles to create The Retail Research Foundation of Canada - a non-profit organization that conducts quality, specification and safety tests on a variety of products that retailers propose to sell to Canadian consumers. MORE

• Former Vice President of Towers pleads guilty to fraud. MORE

• Towers Head Office moves from Orfus Road to Airport Road in Mississauga. MORE
   

• Kent Drugs Ltd., a wholly owned subsidiary of the Oshawa Group Ltd. operating under the name Drug City, buys the assets of Metro Drugs Manitoba Ltd. MORE

• Ray Wolfe, chairman and president of of Oshawa Group Ltd., announces that sales have increased 11.7 per cent to $2.12 billion. This despite the lower profit from Towers Department Stores. MORE
   
• Don Beaumont, vice-president of Marketing for Towers concedes competition for toy sales from Toys "R" Us will likely be something to be reckoned with. "We've watched them for many years and have developed a healthy respect for them but Canada is another market, another world. Many prosperous American businesses have moved to Canada and have not enjoyed similar success." MORE
   
• Larry J. Crystal is appointed General Manager of the Restaurant Division MORE

• Shoppers are advised not to shop at the Riverdale Plaza or Galleria Shopping Centre stores. The reason? If you want to cash a cheque there you are going to have your photo taken. MORE
   
• Oshawa Group profit is up. Towers Department Stores helps out. MORE
   
• Towers, and other retailers, remove fake 'Cabbage Patch' dolls from their shelves. MORE

• Receives $128 refund for troublesome bicycle MORE
   

• Wayne Cammack appointed Vice President Information Systems. MORE
   

• The Towers Department Stores unit of Oshawa Group Ltd. of Toronto is being more heavily promoted as a family shopping chain with a new slogan and campaign developed by Saffer Cravit and Freedman Advertising Ltd., also of Toronto. Photos of Towers employees with their families will support the new slogan, "We're part of the family," which will be used in fliers and on radio and television. Globe & Mail (Toronto, Canada). (Feb. 6, 1985)

• W.L. Atkinson, president and chief executive officer of Towers Department Stores Inc. is named to the Peel Region's first Junior Achievement board of governors. MORE
   
• Max Wolfe, founder of the Oshawa Group Ltd., passes away. He was a grocer and businessman born in Lithuania in 1893 and raised near Newmarket, Ontario. At age 16, with $25 cash and a $60 loan, he bought a horse, wagon and load of apples and went into business. In 1914, he launched Ontario Produce Co. with his brother Maurice to supply army bases. The operation expanded to become known as the Oshawa Group Ltd. and at his death it included IGA, Food City, Dutch Boy, Towers Department Stores and Drug City.
   
• Tom Spayde develops prototype retail design concept for Towers Department Stores (Toronto) and led concept integration into Halifax, N.S. flagship location

• Towers looks for experienced retail department managers for "...our new 'Store of the Future' in Newmarket opening early 1989. [Editor's note: This store never opened.] MORE
   

• 13 are charged in Towers store promotion - Police say at least 13 people knew they could splurge on big purchases without paying a cent. All of them had scratch-and-save cards which, when checked by the sales clerks, showed they had won a 100-per-cent discount and would get the goods free. MORE

• William L. Atkinson, President and Chief Executive Officer of Towers Department Stores Inc. announces the appointments of Donald A. Beaumont as Executive Vice President and Chief Operating Officer, and William Douglas as Vice President Marketing. MORE

• The October 4 edition of the Star reports that Woolworth Corp. of New York is interested in putting in a offer for Towers, despite Hudson's Bay Co. signed letter of intent to buy the 51-outlet operation from the Oshawa Group. MORE
   
• Globe and Mail article "A bidding war could erupt for the Towers department store chain run by Toronto's Oshawa Group Ltd." MORE
   
• The Toronto Star, on October 23, reports that "Oshawa, Hudson's Bay seal pact on store sale." While details are sketchy, a "definite agreement to sell its bargain-basement Towers and Bominart department store operations" for between $100 million and $150 million has been reached. MORE
   
• October 15 edition of Discount Store News reports that  "Zellers, Woolworth face off for control of Towers - Zellers Inc. and Woolworth Corp. bid for Towers Department Stores Inc" MORE
   
• The November 5 edition of Discount Store News reports that “Zeller's parent gobbles up Towers - Hudson Bay Company buys Towers Department Stores Inc. from Oshawa Group Ltd., Zeller's Inc.” MORE
   
• On November 16, the Star reports that "Hudson's Bay to expand despite slump." MORE
   
• Zellers buys Towers/Bonimart from the Oshawa Group, 51 stores for $181.5 million ($3.6 million per store, or some $60 per square foot). Zellers buys another half billion dollars in sales and gets an 18 percent market share. President Paul Walters predicts Zellers will overtake Sears in 1991 sales. He also promises that Zellers will remain headquartered in Montreal ("Our roots are here; we wouldn't think of changing that"). Towers is doing some $90 per square foot. The Zellers marketing will bring most of the stores up to the Zellers productivity. [Ed. note. site]
   

• Zellers clinches deal to take over Towers Hudson's Bay beats out Woolworth. Ross Cowan, retail analyst for Levesque Beaubien Geoffrion Inc., estimated the price may be up to $150-million. He described the sale as a good fit. "I think it's a great opportunity for Zellers." MORE
   

• Donald A. Beaumont, Executive Vice President and Chief Operating Officer of Towers Department Stores Inc., announces the appointment of Al Leblanc as Vice President, Operations. MORE
   

• In a move that surprised the industry here, Oshawa Group said it is getting out of department store retailing with an agreement to sell its Towers/Bonimart stores to Hudson's Bay Co. MORE
   

• Speculation is mounting that the giant Zellers Inc. chain is close to buying the Towers and Bonimart department stores run by Toronto's Oshawa Group Ltd.
  
  Officially, at least, neither side will comment on the prospects for a deal or even confirm that discussions are going on. "I can't say anything about it," said a spokesman for Zellers' Toronto-based parent Hudson's Bay Co. MORE
   

• 375 employees at the Towers/Bonimart office in Toronto and 55 workers at the Montreal office will be laid off Feb. 9, 1991 MORE
   

• The takeover of the Towers department store chain by rival Zellers Inc. will cost at least 430 people their jobs.
  
  Zellers, a Montreal-based unit of Hudson's Bay Co., said yesterday that it plans to close the Towers merchandising and administration offices in Toronto and Montreal.
  
  Layoff notices have gone out to about 375 workers in Toronto and 55 in Montreal. The layoffs are effective Feb. 9. MORE
   

• Thomson Financial Mergers and Acquisitions
  Hudson's Bay Co acquires Oshawa-Towers/Bonimart Stores from Empire Co Ltd - Detailed Transaction Report DOWNLOAD
   

• Retail Business Holidays Act (1990) of Ontario originally prohibited most stores from opening on Sundays. However, there were many exceptions to these rules (for example, gas stations, convenience stores, tourist areas). Many store owners who opposed the law decided to open their stores on Sundays, knowing the fact that they were breaking the law.
  
  In June 1990, Ontario Supreme Court found the Retail Business Holidays Act to be unconstitutional. As a result, Ontario had nine months of open-wide Sunday shopping, until Ontario Court of Appeal's reversal of the decision in March 1991.[15]
  
  However, public opposition to Sunday closing continued to rise. Bowing to public pressure, the Rae government passed the legislation in June 1992, to permit Sunday shopping in Ontario.

• Discount Store News reports that “48 Towers due for remake.”  The March 4, 1991 article goes on to detail the conversion. John Urie, Zellers executive vice president, expects sales of the latest Zellers prototype stores "...to show double digit percentage increases." MORE
   
• Toronto Star reports that "Zellers sees banner year, plans expansion" in its March 6 edition. Paul Walters, Zellers president and chief executive officer, says "We are not retrenching - not pulling back and waiting for the storm to blow over. We intend to dominate the Canadian mass retail market, pure and simple." The purchase of Towers increased Zellers sales by about $500 million, Walters said. Analysts indicate that the purchase grew Zellers slice of the Canadian retail market to about 18 per cent, from 15 per cent. MORE
   
• The Toronto Star reports, on May 18, that despite the recession, "Oshawa Group gains after Towers sale." MORE
   
• Donald A. Beaumont yesterday was appointed president and chief executive officer of K Mart Canada Ltd., a subsidiary of the K Mart Corporation, the third-largest American retailer. The new appointee comes to K Mart Canada from Towers Department Stores, a Canadian department store chain, with which he was associated since 1977, most recently as executive vice president and chief operating officer. He was the Towers vice president of marketing before that. Before joining Towers, he was with T. Eaton Company Ltd., one of Canada's largest retailers, for 20 years. MORE
   
• Zellers comfortable in tough retailing climate - Retailing Around the World: Endless Possibilities or Endless Problems? "...while successfully digesting its 6 month old Towers Department Stores acquisition--the 46 Towers stores it kept from the 51-unit chain have been fully converted to the Zellers format--Zellers was also cultivating new retail formats." MORE

• Flea market flourishes where abandoned Bonimart once stood MORE
   
• Zellers loses money despite Zellers benefitting because it received discounts from suppliers to stock the 47 Towers-Bonimart stores acquired from Oshawa Group Ltd. MORE
   
• Laid off Bonimart employees receive little known benefits from Quebec government MORE
   
• Oshawa Group uses surplus cash from sale of Towers stores to buy more IGA MORE

• Announced at Oshawa Group's General Meeting that two top executives will leave.
  
  Oshawa said Allister Graham, chief executive officer, will retire in the near future, at which time there will be "an orderly change in authority at the senior level."
  
  Jonathan Wolfe, president and chief operating officer, also announced his resignation, after it was revealed that he wasn't being considered as a successor to Graham.
  
  The company said it has a short list of candidates to replace Graham, all of whom are from outside the company.

• Staples Inc. Names Edward C. Harsant As President, North American Superstores
  
  Staples Inc. (NASDAQ: SPLS), the office supplies and services retailer, today announced it has named Edward C. Harsant, currently president of its Canadian operation, called The Business Depot, Ltd., to the newly created position of president, North American Superstores for Staples. MORE

• Zellers gives up on old Towers Sudbury location MORE

Formed in 1962, Allied Towers Merchants, Ltd., is now the biggest discount chain in Canada. The company was originally organized by a group of merchants holding concessions in a mushrooming chain called Towers Marts International under the presidency of Samuel J. Rosenstein. Some Canadian capital was invested in the company but the chief guidance came from the principals who had started the chain. Every department was leased and in the early days there was little real control; available merchandise was bought in large quantities in the hope that it would sell. For some months the chain prospered but in the latter part of 1962 trouble developed in regard to real estate payments and merchandising policies. As a result the company went into receivership in March, 1963.

A group of concessionaries, under the company name of Allied Towers Merchants Ltd., stepped in as a protective measure to take over on a con­tractual basis with the trustees for Towers Marts. The lessees operated jointly as a landlord taking over the collection of cash, advertising, and setting general company policy.

President Myrle W. Book says. "We were just low, very low, and it was not until late in 1964 that we had the situation well in hand. Since that time our progress has been steady with a very substantial sales growth. The company produced a sizeable profit for the first time in 1965. We now have 13 units in fast-growing suburban areas and our current level of sales is far in excess of the national average. One of the first things we did was to get into very solid planning.

"In our first year of operation we reduced our inventory by over $2 million since a lot of it was three years old. Many of our departments had been loaded with unacceptable lines which had been bought for promotion. We got rid of it at any price and dropped many low-end lines. For example, we were selling thousands of dozens of Japanese brassieres at 33 cents. We dumped them and put in 87-cent brassieres with excellent results.

We applied this principle to hundreds of items and it has brought about better markon, better acceptance, and obviously a greater profit. At the same time we developed goal planning and merchandise management. For a long time we could not attract very many good people so it was almost a one-man band. I am sure that many have gone through the same experience in trying to find executive talent.

"Although we have traded up, price will always be our predominant customer attraction. But it is price with style, quality, and downright good value. We started as a discounter but we now consider ourselves more of a small promotional department store type of operation. We use comparable pricing fairly extensively.

In the main our prices range from middle-low to middle-high. Our highest priced women's coat used to be $49.88 and is now $79.88 but we did not reach this price in one jump and we cannot do it in all our stores. We fought our way cautiously. The first area in which we started trading up was in women's wear. We actually considered leasing this department as it was one of our greatest losers, however, as a result of careful merchandising, by 1965 our women's wear department became our greatest profit department.

"In 1965, on a very low budget, we managed to redecorate and re-fixture our stores. We hired a company to set up a complete program of new signing. We also strengthened our merchandise mix by adding name brands. After a great deal of negotiation with suppliers we introduced several of the leading lines of cosmetics which we agreed not to discount. We have a large furniture and major appliance department including such brands as RCA and Frigidaire.

"In Canada a whole new upper-middle class has risen in the past 15 years. It consists of educated people in executive, managerial, and professional occupations earning $8,000 to $9,000 a year and up. This segment today accounts for half of the consumer market in Canada.

The upper economic bracket now represents about 20 per cent of the families in large urban areas contrasted with 5 per cent 15 to 20 years ago. Together, particularly in our Ontario-Quebec market, these two groups represent 70 per cent of the consumer demand.

How wrong we could have been in our case to have gone to low-end type merchandise. In Canada 37 per cent of the labor force currently is aged 16 to 31 years. By 1970 this group will comprise about 56 per cent of the labor force. In 1951 this was 11 per cent. Today in Canada about 25 out of every 100 married women work outside their home. To satisfy the wants of this dynamic new consumer market presents a tremendous opportunity.

 

In April, 1961 Samuel J. Rosenstein, president of Towers Marts, lectured it the University of Massachusetts Conference on Discounting. At that time a fierce battle between discount stores for the best locations was in progress. In his talk Rosenstein said, "Now the question of competition is a very difficult problem to analyze, because, as consultant Anthony

Downs (Real Estate Research Corp., Chicago) pointed out, it's very hard for anyone to know exactly who is going into a given area. We in Towers take a very clear-cut position on this matter. For example, we're going into the Washington area with depth. Washington has a population of a little in excess of two million, and after very careful economic studies, the type of which I will exhibit here very shortly, we have decided to put six stores in the metropolitan Washington area. We think we have located them strategically. Now is important for our competition to note that we are going into this area. For this reason we take great pains in publicizing these things and I think that many of the people who know us now know that when we say we're going into a given area, we go in. And when we specify a time that we're going to be there, we will be there. We will open with four stores in Washington in the latter part of May, and we will have two more this fall so that we will have six stores in the greater Washington area within a very, very limited period of time. This principle of saturation we feel is healthy for the industry because unless one of our competitors wants to really come in and have a knockdown, dragout battle, they will look for another city."

In the New York Times of June 10, 1961 it was announced that Towers Marts, Inc., of New York and its wholly-owned subsidiary, Towers Marts of Canada, had made a $25 million transaction for eleven shopping centers, seven of which would be in Ontario, two in Montreal, and two in Washington, D.C. The company then operated nine centers in the United States and one in Toronto.

In May, 1962 Towers Marts filed suit to end its contracts with the Darling Stores Corporation and Grayson-Robinson Stores, Inc., agent for Darling in operating the departments. The suit asked for $1 million damages for breach of contract and the right to terminate agreements with the defendants to operate women's and children's apparel and millinery departments in fifteen Towers stores. Towers charged that the two companies did not cooperate properly in the advertising program and did not maintain a complete line of seasonable and representative merchandise at competitive prices. This situation, according to Towers, jeopardized its customer image. A statement by counsel for Grayson-Robinson as reported in the New York Times of May 5, 1962 called the Towers Mart action "without foundation. It was brought primarily," counsel said, "because the terms of the existing leases are so beneficial to Grayson-Robinson Stores, Inc., that Towers now believes it can secure better terms from others, or by means of this litigation, from Grayson-Robinson. In fact, Towers is in default in the performance of its obligations as landlord in vital respects, and large counter claims are being asserted against Towers by Grayson-Robinson." The matter was settled in June, 1962 when Towers agreed to pay Grayson-Robinson $1,384,936 with the understanding that Grayson-Robinson would give up its right to operate leased departments in present or future Towers stores. Towers made a payment of $703,590 towards the agreed amount.

In September, 1962 Grayson-Robinson Stores filed suit to collect $681,346 alleged owing to it by Towers Marts International, Inc. It was charged that most of the money had been withheld by Towers from the sales of merchandise in leased departments operated by Grayson-Robinson in Towers stores. The dispute was finally settled by a payment of $500,000 by Towers Marts to Grayson-Robinson.

In November, 1962 Towers Marts International sold its Canadian subsidiary, operating thirteen stores, to a group of investors. The company also announced that it had withdrawn a proposed public stock issue of 550,000 shares owing to market conditions. The Wall Street Journal of February 12, 1963 carried an article stating that Towers Marts was in temporary financial difficulty owing to expenditures of more than $500,000 in connection with lawsuits against Grayson-Robinson Stores.

In March, 1963 the Towers Marts and Properties, Ltd., the former Canadian subsidiary, was placed in interim receivership by the Ontario Supreme Court. This company still owed Towers Marts International an unsecured debt of $450,000. It was given six months by its creditors to work out a reorganization.

On April 5, 1963 Towers Marts International filed under Chapter XI of the Federal Bankruptcy Act listing liabilities of $11,073,146 and assets of $9,796,000. Liabilities included $2,959,000 in accounts payable to concessionaires in its stores, all eighteen of which were closed. The four former Towers Marts in the Washington, D.C. area were acquired by the Zayre Corporation from the individual owners of the properties.

As it turned out, Towers management was building a house of cards since the company's stability and the expansion of its physical premises depended on a sales-lease-back principle. All Towers stores had commitments in terms of sales-lease-back but nonetheless cash from the business was used initially to construct the stores. When the stock market crashed and the Tower's stock issue, which would have raised $5 million, also collapsed, the company never went public. The individuals who had made the commitments had to renege because their individual house of cards, so to speak, came tumbling down, or they wanted to contract so the commitment was withdrawn. Towers Mart money was tied up and sunk into the real estate and management could not get it out. In order to keep paying the contractors and to keep the business alive, money due to lessees was borrowed. Marrud, Inc., the cosmetics lessee it is said, was "hung up" for approximately a half million dollars; Rockower, another lessee, lost three quarters of a million.

At any given moment, even in those days, if the principal does not send out a weekly check to his lessee, he is in trouble. Two weeks can go by and "you're sitting on a big chunk of money." Customary procedure with lessees is to settle on Friday for the week ending the previous Saturday. Some have a schedule of payment on the Wednesday of the second following week. Suppose this settlement is not made on the Wednesday but is delayed to the following Monday. You are then talking three weeks of receipts which has already been taken in without the lessee receiving a cent. This can happen very quickly as the days and weeks roll by extremely fast. The check may be a few days late. The lessee controller forgets to tell his boss. If the boss is not informed, the principal may be four, five, or even six weeks into a firm's receipts before management is aware of it. This is exactly what happened with Towers. There was no way out since there was no permanent money coming in to replace the temporary money that was supporting these stores.
The Towers organization was not really a merchandising business since hey merchandised no part of the store — it was merely a real estate venture.

It is conceivable that the Towers management might have pulled through if they had been able to raise the needed money or if the 1962 crash had not taken place making it possible to honor the long-term commitments. On the other hand, not being basically merchandisers, they might have eventually run into store operational problems. It is a generally-accepted theory that in building the discount industry the major lessees play a very important role in supplying operating capital and know-how but a limited one in terms of time. Eventually — in a rapidly expanding and successful chain — there comes with few exceptions a time when there is no place for them since they function as an "extra" middleman between the manufacturer and the ultimate consumer. If they are good merchandisers and making good money, then why, reasons the principal, should that money not accrue to the store operator? If they are not good and don't see eye to eye with the principals as to how the store should be run, then they ought not to be there. Negating this point of view is the fact that some lessees have built up such extraordinary expertise in their specialties that they can, in very many instances, provide more profit for their principals for a given department on a lessee rather than on a self-operated basis. Otherwise why, one might ask, did the Kresge K Mart management lease out their men's and boys' wear departments to Unishops on a long-term basis?


Oshawa Group History

The Oshawa Group was one of Canada's largest suppliers of food, operating in both the wholesale and retail sectors. The company ran 102 supermarkets under a variety of banners, including Food City, IGA, and Dutch Boy. It was also the largest wholesale supplier to independently owned IGA stores in Canada. Oshawa was active in the general merchandwase and pharmaceutical market as well, running 39 Towers department stores in Ontario, nine Bonimart stores in Quebec, and 156 drugstores under the Pharma Plus, Drug City, and Metro Drugs chains. The company also operated 25 pharmacy units throughout its department stores and supermarkets.

The company was originally incorporated in Ontario on June 18, 1957 as Oshawa Wholesale Ltd., and operated as a distributor to grocery stores during its first few years.

But as the company grew in the early 1960s, it quickly began to diversify.

In 1963 Oshawa purchased a controlling interest in the Dominion Mushroom Company, a large mushroom growing and packing concern. Earnings surpassed $1 million in 1963, and Oshawa soon invested heavily in supermarkets.

In September, 1964 the company acquired full control of the Independent Grocers Alliance (IGA) Distribution Company.

Oshawa diversified into general merchandising retailing in January, 1966 when it purchased a 75% interest and took over management of the six-store Rite-Way Department Store chain, which operated throughout Ontario.

A year later the company acquired the rest of Rite-Way's shares and purchased Allied Towers Merchants Ltd., another department store chain, combining the operations of the two under one management group.

Oshawa continued its diversification into other businesses and new geographical areas in the late 1960s.

In July, 1968 the company purchased Kent Drugs Ltd. The acquisition added about $7 million to Oshawa's annual sales, and Oshawa President Ray D. Wolfe announced the company's plans to put Kent Drug store units in new Towers Department stores.

Also in 1968 Oshawa purchased Rockower of Canada Ltd., a firm which operated the men's and boys' departments in 26 of Oshawa's Towers stores.

Oshawa's food distribution unit was greatly expanded late in the year by the purchase of Shop & Save Ltd., an IGA supplier in Quebec.

The company branched into Canada's maritime provinces when it acquired Bolands Ltd., which as supplier to 45 IGA stores in that region had accounted for about $27 million in sales the previous year.

By the end of its shopping spree Oshawa was the supplier to 325 IGA stores in five provinces and had become well diversified in the general merchandise and drug store markets.

In the 1970s Oshawa became more involved in real estate dealings. In mid-1970 the company purchased an interest in Baxter Estates, a real estate partnership which owned an apartment building in Winnipeg and a shopping center in Calgary. (The company sold its interest in Baxter three years later for a nearly 100% profit).

In November, 1971, three months after it changed its name to The Oshawa Group Ltd. to reflect its diversity, the company purchased the rest of Marchland Holdings Ltd., a real estate developer it already half-owned.

At the time of the acquisition Marchland owned four Towers-Food City shopping centers and a commercial complex in Sudbury, Ontario that included a shopping mall, hotel, office center, theater, and parking garage. Oshawa also purchased the remaining third of the modular home developer Systems Construction Ltd. of Ontario.

In early 1972 Oshawa moved into western Canada by acquiring Codville Distributors Ltd. Oshawa's bid was accepted over the competing bid of Westfair Foods Ltd., a subsidiary of George Weston Ltd., because Oshawa's offer was more attractive to Codville's minority stockholders.

In October, 1973, Harvey S. Wolfe succeeded his brother Raphael Wolfe as president of Oshawa; Raphael became chairman and CEO.

The Oshawa group introduced the first hypermarket (Hypermarché) in North America near Montreal in 1973. A hypermarket is a superstore which combines a supermarket and a department store. The concept has been created in France, then exported to other countries.

The format was pioneered by Carrefour upon opening its first such store in 1963 at Sainte-Geneviève-des-Bois, France,[1][2][3] In the Americas,

In 1976 Oshawa bought out its partners in the Decairie Square shopping mall in Montreal. In December, 1977, Norman S. Lipson, former president of Oshawa's Tower Department Stores unit, pleaded guilty to four counts of fraud which involved kickbacks of $411,000. Lipson had resigned from his position in late 1976. He was sentenced to two years' imprisonment and fined $30,000.

In the late 1970s the Wolfes began to slim Oshawa's operations a bit.

The company shed its 50% interest in the Consumers Distributing Company, Ltd. in 1978. Consumers Distributing sold brand-name general merchandise at reduced prices in large, no-frills showrooms; Oshawa had entered into a joint venture with the limited-service retailer, providing capital for the chain's expansion eight years before. Oshawa also sold its 90% interest in Coinamatic Laundry Equipment in late 1978.

The early 1980s saw Oshawa emphasize its core businesses--food wholesaling and retailing. In 1983 group sales surpassed $2 billion. In 1985 the company strengthened its presence in the Atlantic provinces when it acquired nine supermarkets and a distribution center in Nova Scotia from Dominion Stores Ltd. and bought 22 Canada Safeway supermarkets in the Toronto-Hamilton area.

In 1986, as group sales passed the $3 billion mark, Oshawa divested its Dominion Mushroom farm due to both erratic earnings and the unit's need for a major capital reinvestment, and sold its Decairie real estate in Montreal and its Sudbury shopping center.

In the late 1980s Oshawa took bold steps to improve its food retailing business. Oshawa's corporate-owned Food City stores took on a new "streetscape" look. The store layout was intended to resemble an old-fashioned sidewalk merchant atmosphere, and at the same time appeal to young urban professionals as well as retirees. Oshawa targeted upscale consumers wherever possible with specialized services and fancy merchandising.

For example, in 1987 the company's Thornhill, Ontario Food City superstore added a kosher deli, bakery, and meat department to appeal to the community's large Jewish population. By specializing wherever possible, Oshawa commanded beefier margins on premium products and services.

In 1988 Oshawa tripled its drug store chain by acquiring the 109 retail units of Boots Drug Stores for C$45 million. The stores were renamed Pharma-Plus Drugmarts and joined the 34 Kent Drugs and 12 Metro Drugs units in operation. The addition helped Oshawa sales to top $4 billion in 1989.

On November 2, 1998, Empire Company Limited ("Empire") and The Oshawa Group Limited ("Oshawa") announced that Empire, through Sobeys Inc. ("Sobeys") would acquire all of the voting common shares and Class "A" non-voting shares of The Oshawa Group Limited. The transaction included Oshawa's retail and wholesale operations across Canada, with the exception of the Maritimes. Sobeys also acquired Oshawa's food service business, SERCA Foodservice Inc. which operates coast-to-coast.

More about the Oshawa Group...

ANOTHER ONE BITES THE DUST:
TURNOVER AND FAILURE AMONG THE LEADING CANADIAN FIRMS, 1973-2003
The Parable of the Family Jewels



 

The Observer was a "...quarterly newspaper published by and for the employees of the Oshawa Group Limited and subsidiary companies" -- which included, of course, Towers Department Stores.

As an employee of Towers for many years, I would receive the Observer at home, glance it and toss it.

Except for one edition.

The "Spring Issue. Volume 12, No. 1", published June 1974, I kept for some reason.  And I'm glad I did. It's a unique snap shot of Towers - who was just promoted, who just got married and who celebrated the birth of a child.

I'm going to pick out this and that from this edition for you to enjoy.

Page 3
There is, more me at least, an extraordinary photo on this page. It was included in an article, by Oshawa President Harvey S. Wolfe, that bemoaned the fact that many small towns still had laws in place that forced businesses to close by 6 pm.

The photo is of an opening of a Towers store - a store that opened in, or before, 1974.  I don't know which one. The noticed (and OMG, remember!) the cashier uniforms and the cash registers.

The uniforms where an outrageous canary yellow colour, with a short mini skirt and a "beret" cap that had a little "stem" on the top -- like a stem of a pear!
 

Thanks to Iona (Hixson) Fevreau for this submission
 

• Separate the taxable items, from the non-taxable items.
   

• The machine had 7 or 8 columns of vertical buttons, arrange from zero at the bottom to nine at the top. They were colour coded. These buttons where mechanical. You had to apply some force to depress each one.
   

• Towers tickets were made up the CLASS, ITEM and PRICE. The CLASS, or department, would identify a category of products -- like candy. The ITEM number would identify a specific product in that department -- like Coffee Crisp chocolate bar.
   

• Cashiers has to enter the each piece of information one a time. It was commonly referred to as "3-pass" entry.
   

• Starting with the first taxable item, they would press the ITEM button. Then, moving their index finger swiftly up and down, enter the item number. It meant (counting from the right) entering the first digit in column 4, the second digit in column 3, and so on. Experienced cashiers would zip up and down -- their finger nails making clicky noises as they flew up and down. Once done entering the item number, they would press the big "ENTER" button on the far right. The cash register would go ca-chunk. The numbers would appear (white against a black background) in the mechanical display at the top of the machine.
   

• Next came the class number. Cashiers would press the CLASS button and enter (just as described above) this 3-digit number and press the ENTER button. Ca-chunk.
   

• Finally, the PRICE would be entered.
   

• When the ENTER button was pressed for the last time, a little bit of the customer receipt would peak out (with that item printed on it) and, unseen, a computer paper tape on the right side of the machine would be punched with little dots. (These tapes would be sent in daily for computer processing at the Head Office.)
   

• The cashier would then move on to the next item.
   

• I don't recall a way of repeating the transaction if a customer was buying two or three of the same item.
   

• Once all the taxable items were done, the cashier would press the SUBTOTAL button. Using a chart, the casher would then manually calculate the tax, press the TAX button and enter the amount.
   

• The cashier would then move on to the non-taxable items.