CANADA PROBES ALLEGED HUDSON BAY ULTIMATUM

Byline: Brian Dunn

MONTREAL — Canada’s Competition Bureau is investigating allegations that some of Canada’s biggest fashion reps have been warned by buyers from The Hudson’s Bay Co. their lines could be dropped if they supplied merchandise to the new Eaton’s chain, now owned by Sears Canada Inc.
The warnings came during last month’s MAGIC trade show in Las Vegas, according to Bob Kirke, executive director of the Ottawa-based Canadian Apparel Federation, who said he was informed by some of his members. He declined to identify them.
“The real issue is not between seven or eight Eaton’s and 100 Bay stores. It’s between the Bay and Sears,” he said. “And most people don’t want to give up Sears,” with 110 department stores, 25 furniture and appliance stores and 2,000 pick-up locations for its catalog business.
The federal competition bureau in Ottawa is following up a Toronto newspaper report Thursday alleging that a number of apparel suppliers were approached by Bay buyers demanding exclusivity.
The Bay did not return phone calls. The industry could be up in arms over the issue, according to Bert Lafford of the National Apparel Federation here.
“A store should be able to buy any lines it wants. It’s contrary to the competition laws and there are stiff fines and penalties for such actions. If we get a complaint from any of our members, we will act.”
One industry insider who asked not to be identified suggested the Bay issued the ultimatum because it was losing market share to Sears and could lose more ground to Eaton’s, which is coming out with a revamped high-end format under its new owners. The Eaton’s stores will also challenge the Bay’s downtown flagship locations.
The insider added that the Bay’s Zellers discount division was also getting clobbered by Wal-Mart Canada Inc., which has half the number of stores yet is doing the same volume.

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