When stores lose the stuff dreams are made of

If 10 years ago you had told Canadians that Eaton's would disappear before the end of the century, people would have laughed at you. After all, Eaton's was the Canadian department store, a 130-year-old nationwide chain with stores in the biggest cities and outlets in the smallest towns.

The parents of generations of great Canadian ice hockey players probably bought their sons that first pair of skates at Eaton's. And it was not uncommon for kids to use the store's catalogs as shinguards for hockey.

But few in Canada are laughing now. They are more likely lining up to pick up a bargain at one of the company's remaining 55 stores.

That's because two weeks ago the now-struggling retail giant announced that it was $330 million (Canadian; US$220 million) in debt and that it was closing remaining stores by Nov. 30.

This Canadian institution was started by Timothy Eaton, a devout Methodist who said the golden rule had as much place in business as it did in church. He opened his first store, basically a log cabin, in 1856 in the small village of Kirton, Ontario. It was there that he developed his policy of fixed pricing and a no-questions-asked return policy, both of which were unheard of at the time.

When Eaton moved to Toronto in 1869 and set up shop there, other merchants laughed at him and thought he would be quickly out of business. But shoppers gravitated to his store and his retailing approach, and Eaton's rise to the top of the Canadian retailing world began.

"Eaton's was an example of a Canadian phenomenon that didn't happen in the US," says Viv Nelles, an economic historian at York University in Toronto. "In the US, department stores, like Filene's in Boston or Field's in Chicago, were based in one city [until recent years]. But after Eaton's start in Toronto, it became a national institution. It was everywhere. And the store took on a persona of its own."

While most media in Canada have blamed the demise of Eaton's on poor management or too much competition from US-based retailers like Wal-Mart, Professor Nelles says the situation is more complicated. "Department stores are not doing well anywhere. That's because the process of retailing is changing. And it doesn't matter if you're Eaton's in Canada or Filene's in Boston: You're dealing with the same problems."

Nelles said that several decades ago, department stores were "places of dreams" that anchored cities. They created this "aura" through newspaper ads, parades they sponsored, and store-window displays.

"But all of that kind of aura is generated in other places now," says Nelles. "Mass media and popular culture took away from department stores their ability to inspire dreams of having certain things. And when that's gone, you're just selling fridges and furniture."

Meanwhile, Canadians who haven't been to Eaton's in years have been swarming to its stores to take advantage of the liquidation sale. This past week, the lines outside the store in Halifax were quite long, although shoppers seemed to be leaving disappointed at the early price reductions of 20 to 40 percent.

"It's not much," one woman told a harried cashier, as she thrust a sweater at her. "I can still get this cheaper over at Wal-Mart."

"It's hard, very hard," said one retail clerk who declined to give her name because the store instructed clerks not to talk to the media.

"Eaton's was where my grandparents took me when they wanted to buy me something really special. It's not just about losing a job. It's like losing a member of the family in some way."

(c) Copyright 1999. The Christian Science Publishing Society