At Heritage Place Mall in Owen Sound, Ont., an empty Sears department store would leave a mammoth void. The insolvent retailer is one of the mall鈥檚 largest occupants. More than 60 people work in the anchor tenant鈥檚 roughly 6,500 square metres, a space big enough to fit 14 basketball courts.
If the court approves Sears Canada鈥檚 bid to liquidate its roughly 130 remaining stores, the decision will send shoppers, employees and mall owners in Owen Sound and dozens of other smaller Canadian cities scrambling to find alternative shopping destinations, jobs and tenants.
鈥淢y first reaction was: Oh, crap,鈥� said Owen Sound Mayor Ian Boddy of hearing the nearly 30-year-old location, is likely to close soon.
鈥淲e鈥檙e pretty disappointed.鈥�
A closure will hurt the local economy, he said, leaving dozens unemployed and perhaps prompting fewer people to travel to the region to shop.
Some 4,000 kilometres away on the West Coast, the mayor of Prince George, B.C., echoed those concerns about the Sears store at its Pine Centre Mall.
鈥淚t will have a direct economic impact on our community,鈥� said Lyn Hall.
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The store employs more than 60 people, he said, and sells goods and services to hundreds of thousands living in Prince George and the surrounding areas.
Both leaders wondered how their local malls would cope with an anchor tenant鈥檚 departure.
The bulk of the former juggernaut鈥檚 stores are in shopping centres in communities like Owen Sound and Prince George 鈥� smaller Canadian cities, where the store may serve a larger geographic area than just those living within the city鈥檚 borders.
Of Sears鈥檚 remaining 74 department stores, all but one are in shopping malls, most in areas with populations under 400,000 and some well under that.
The malls in these so-called secondary or tertiary markets are likely to struggle to fill the vacant space in the event Sears doesn鈥檛 sell its leases or real estate to a third party, said Peter D. Morris, the founder of Greenstead Consulting Group, a real-estate consultancy firm.
鈥淚 fear some of those smaller properties may not be able to come back at all,鈥� he said, declining to speculate which of the malls may go under.
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There isn鈥檛 another big department store chain that requires that much space waiting on the sidelines, he said.
The remaining department store mall locations total more than 10.6 million square feet (nearly one million square metres). That means the select few chains like The Hudson鈥檚 Bay Company or Simons that could take over some locations have a plethora of real estate to choose from, said Morris, and likely won鈥檛 gobble up anywhere close to all the vacant space.
For malls that don鈥檛 draw another single anchor tenant, he said, the easiest solution would be to divvy up the former department store space and woo intermediate-size shops, like athletic retailer Sport Chek or bookstore Indigo.
Another possibility, he said, is that certain restrictions in place due to Sears鈥檚 lease, like limiting further development, could disappear along with their corresponding leases and open landlords to a whole range of development possibilities. They could choose to build residential units or a mixed-use space that combines entertainment, recreation and shopping, said Morris.
However, that takes time. Consumers could find other venues with a greater selection to shop at in the interim, he said, and landlords will have to find a way to lure them back after the changes are made.
To make matters worse, for many of the malls, the Sears saga is a recurring problem. In recent history, they鈥檝e grappled with the demise of Zellers and, more recently, Target.
Prince George鈥檚 Pine Centre Mall, for example, lost its Target location about two years after it opened when the American chain announced it would shutter all of its Canadian stores. A Lowe鈥檚 Canada has since opened in the location.
The Sears vacancy 鈥� at 10,400 square metres, or 24 basketball courts 鈥� will leave a much larger hole for management to fill.
Mayor Hall said he鈥檚 not sure what the mall will do, but it will be quite a challenge.
Follow @AleksSagan on Twitter.
Aleksandra Sagan, The Canadian Press
