About

Variously known as...
 

Towers Marts International Inc.

Towers Marts & Properties Limited

Allied Towers Merchants Limited

Towers Marts of Canada Limited

Towers Discount Department Stores


...and, eventually simply Towers, if you worked for Towers in 1990 and 1991, the world you had known was collapsing in on itself.

Towers was no more. Swallowed by Zellers, it would be, later, no more. Gobbled up by Target years later, the American behemoth would evaporate. So it goes in this retailing biz. 

Oh, but while it lasted, Towers was terrific. Here's an article that describes how it all started. ~Bill

Chain merchants join

discount store project
by Gordon McCaffrey (Toronto Star - September 9, 1960)

 

Fourteen Toronto retail chain store operators have decided the best way to do business in future is to get together under one roof and compete as a group against their individual stores.

 

The result is to take shape in the first of four discount houses to be opened
this November by Tower's Marts of Canada Ltd. on Lawrence Ave. E.

 

Three more stores in the chain, two next March and one in August, are to be
opened in Metro. A fifth is slated for Hamilton.

 

"New Concept"

 

"This is a new concept in retail selling," says Ben Rosenburg, president of
the Canadian company, which is owned 50-50 by Toronto and U.S. businessmen.


"We are introducing the first legitimate discount selling at the department
store level in Canada."
 
He declined to name his Toronto associates.

Tower's Marts has no Toronto office. Rosenburg is using offices at H. B.
Sussman and Associates - real estate developers.

The first Tower's stores in Canada will be 60,000 square foot buildings, three
to four times the size of the biggest Metro food store markets. Each will have
paved parking area for 600 cars.    

"They'll be complete shopping centers under one roof, but no food," Rosenburg  says. "The customers will use push-carts, like they do in food stores."

 

Target for sales is $5,000,000 per store, or $20 million for the chain in
1960-61.

 

Rent Space

"This figure isn't something we pulled out of the air," Toronto-born Rosenburg
says. "The seven Tower's marts in the U.S. are doing that much or more each
year."

Here's how Rosenburg and his associates will operate:

  • The company will erect a building, sell it to recover the capital investment then lease it back.

  • Concessionaires will rent space in the store, the same way they do at the Canadian National Exhibition.

Names a Secret

"They'll include some of the biggest retail chains in Toronto," Rosenburg
says, "but they won't operate under their own names. As far as the public is
concerned they'll be departments of Tower's Marts."

Names of the concessionaires are a closely guarded secret. "After all, they're
competing against themselves. It wouldn't do them any good to have their names known."

According to Rosenburg, the concessionaire will sell the same quality and
range of merchandise he sells in his own store, but at Tower's Mart it will be
20 to 25 percent less in price.

Savings Questioned

Says David Gilbert, general manager, Retail Merchants' association of Canada: 
 

"We seriously question this saving, having regard to the purchasing privileges
which are available to big business and the efficiency of our present
marketing system."

The 14 merchants have signed with Tower's Marts for one year.

This time next year, they can choose to stay in the group or get out. On other hand, the company has the option to kick them out. Rent is based on each concessionaire's volume of business.

The departments will include ladies and men's, girls' and boys' wear, shoes, hardware and houseware, drugs, dry goods, toys, records, stationery, sporting goods, costume jewelry, millinery, luggage, and a pet shop, Rosenberg says.

 

He claims three cost advantages over smaller retail stores and at least two over the big department stores:

  • Mass purchasing — "What manufacturer wouldn't break both arms and legs to give a $20 million store the lowest possible price?"

  • Low overhead — "Fourteen store keepers all using the same cashiers, clerks, management, bags, fixtures and other overheads have obvious economies over doing all this on their own."

  • Self service — "ln the shoe department, for example, there's nothing boxed, you fit yourself. The only thing the clerk does is put the shoes back you didn't want."

Rosenburg adds: "The average drug store spends 14 per cent of its gross for sales help alone. In one of our stores, this will be cut to four per cent." Other savings on interest charges and warehousing brings the total to at least 20 to 25 per cent under the average for neighborhood retail stores," he says.

"Everything in the store will be at bargain prices, and everything advertised will be in unlimited supply. We won't have door-opening, specials just for the first 100 to arrive."

"And we'll have a lay-away service if somebody has to wait until pay-day to pay the full amount."

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Ben Rosenburg

His claim: "Legitimate Discount Selling"

Back to basics. There was a time when they thought discount stores were "going to take the country by storm," says Towers Department Stores president Bill Atkinson, above, but after some 20 years of growing pains, Towers is now expanding by more conservative plans.

Discounters polishing brash image

by Eleanor Boyle  (Toronto Star, September 11, 1980)

In the hard-sell '60s, discount stores hit Canada and spread

like brushfire through one of the scrappiest periods the retail

industry had seen in years.


It was a carnival.

After Towers Marts set up in Scarborough In 1960, everybody

wanted in.

Chains such as Sayvette Ltd., Banner Discount Stores,

and GEM encouraged a movement that saw a new discount store

opening every week in Canada by 1961.

They opened stores with brass bands, and used every promotional gimmick in the book to — as they thought at the time — eventually push traditional retailers right out of the game.

That didn't happen, of course. And though some discount stores remain, survival of the fittest has dictated that they find new capital, change outmoded marketing techniques, and be operated by career merchandisers rather than interlopers who entered the retail market purely for the Big Buck.

Public expectations

Towers imported the discount concept from the U.S., and admits now it was as guilty as any competitor of early-days hype that tended to exaggerate public expectations. In retrospect, "there was an unrestrained exuberance that we were going to take the country by storm," says Bill Atkinson, president of what is today Towers Department Stores.

Towers, a few mistakes later, is expanding during the 20th anniversary of the industry at a more conservative rate, commensurate with long-term plans.

 

Still faced with a highly competitive market, it is nevertheless in the big leagues now that most of those early stores have disappeared under waves of red ink.

Such heavies as Woolco Dept. Stores, K-Mart, Zeller's Ltd., and Miracle Mart are the prime competition now, and Towers concedes it has only a 10 per cent share of the Canadian market. But, even against such formidable odds — K-Mart is the world's second largest general merchandise retailer after Sears-Roebuck & Co. — it's hoping to chip away at the other 90 percent of the market for low-priced consumer products.

 

More openings


The competition has strong backing. Woolco is a division of F.W. Woolworth Co., K-Mart is part of S.S. Kresge Co., Zeller's is a subsidiary of Hudson's Bay Co., and Miracle Mart is an operation of Steinberg Inc.

Scheduled to open its 46th store this year, in Collingwood, Towers plans two more openings during 1981, at Kitchener and Hawkesbury. According to Atkinson, the chain will open about three stores a year from here on in.

Towers is also in the midst of a renovation program budgeted in the range of $4 million. It's precisely this kind of program that was needed, and that became possible once the chain got the capital it needed.

Much-needed financial backing came from diversified food and merchandise investor Oshawa Group Ltd., formerly The Oshawa Wholesale Ltd., which came into the picture in 1967. At that time, Towers had been in trouble for some years, plagued by problems general to the disorganized, undercapitalized discount store Industry.

Towers and most other discounters had started as landlord companies, leasing space under license agreements to merchants who set up their wares and sold independently of one another. 

"We Just pour concrete and put up four walls," as then-Towers' president Ben Rosenberg explained back in January, 1962.

In the long term, the concept worked badly. "There was a tremendous unevenness in quality," says Atkinson, 48, who started with Towers in 1964 as a financial expert on loan for a year from his investment company, now Nesbitt Thomson Bongard Inc.

The year turned into a career, as Atkinson moved through several positions with Oshawa before taking over as head of the Towers operation.

The historical problem with the original leased departments concept, he says, was that customers unhappy with one merchandiser under the Towers roof would never come back.

And some Concessionaires, unable to keep up with Towers' rapid early expansion, fell by the wayside so that "landlords" found themselves thrown into merchandising, a field they didn't know.

In 1963, Towers concessionaires representing two-thirds of the chain's sales tried a rescue attempt.

They formed Allied Towers Merchants Ltd. (ATM) and went public with a stock issue to repay heavy debts and raise equity for future growth.

In 1964, Towers-went into receivership but ATM hung on, taking over the property leases and trying to develop a profitable operation — a difficult task.

Atkinson says ATM remained unprofitable until 1966, though even then it couldn't scrape together enough capital for expansion. So, Oshawa acquired it, and merged it with Rite-Way Department Stores, then 75 per cent owned by Oshawa but subsequently wholly-controlled. Starting by buying out two of the chains' largest concessionaires — Rockower of Canada and Kent Drugs — Oshawa began taking over all operations as leases expired.

It hasn't been all profit since. Towers had "fairly serious problems" in 1976, for instance, Atkinson says, based mainly on the company's lack of marketing direction at the time.

It has now backed down from a couple of experiments that were unsuccessful during that period —such as one up-scale operation that would have put Towers head-to-head with major department stores.


Now, as Atkinson says, "we're concentrating on what we do best," providing quality at low prices in a range of goods from budgies to blouses.

Sales in the current fiscal year ending next January should surpass $300 million, up from 6282 million. last year. And while the company won't divulge earnings, Atkinson terms it "profitable."

"Our return on investment is not at an acceptable level by my standards or that of the corporation as a whole, but the trend, since 1976 has been good."

Discount stores still have unique problems.

Suppliers don't refuse outright to sell them goods — a practice, now, prohibited by law, which some manufacturers adopted during the mid-'60s when discounters got a bad name. But some still occasionally hold back a little.

However, the wide range of goods now available means Towers has no product shortages, Atkinson says.

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Past Pieces of Toronto:

Towers Department 

Stores 

by Jamie Bradburn (October 17, 2017)

As the 1960s dawned, the discount

department store heralded a new era

of shopping. While Toronto had been

home to stores such as Honest Ed’s

for some time, the new breed of bargain

emporiums were large, suburban sites

which promised low prices, self-service and plenty of parking.

 

Two years before future industry giants K-Mart, Target, Wal-Mart and Woolco opened their first stores in the United States, Towers brought Metro Toronto consumers a taste of the future of retail.

Launched as the Canadian division of U.S.-based Towers Marts International, the chain’s plan was to erect stores, sell them to recover the capital costs, then lease them back. Concessionaires rented space inside each store to operate individual departments—one merchant ran men’s clothing, for example, while another ran the pharmacy.

 

The initial 14 concessionaires, including familiar names like Coles books, signed a one-year deal, with the cost of the lease afterwards determined by their sales volume. By coming together under one roof, everyone saved money by using common cashiers, bags and fixtures.

After six weeks of construction, the first Towers store opened at Lawrence Avenue East and Midland Avenue in Scarborough on November 17, 1960.

 

An ad printed in the Star two days earlier depicted a child clad only in a rain barrel declaring “I’m not buying another thing” until the doors opened. The ad promised shoppers “bargains in sufficient quantities to fill your needs,” “forty-eight self-service, pressure-free departments on one floor to fill every need for all the family,” and “acres of free parking.”

 

The festivities included the crowning of Mrs. Canada, who represented “the nation’s happiest housewife,” or at least the happiest homemaker to shop at Towers.

More gimmicky touches were used when Towers opened its third store on Dundas Street West between Bloor and Roncesvalles in June 1962. The first 1,000 customers could spend money to get more money—in this case, silver dollars for 80 cents. Seven sets of triplets, ranging in age from 3 to 34, were on hand to perform duties that including modelling the chain’s latest fashions and burying a time capsule intended to be left untouched until 2062.

Whether Towers would survive one more year, let alone 100, was a reasonable question. Messy relationships with its concessionaires, an inability to sell properties as fast as they were built, and a split with its American parent led to Towers falling into receivership in March 1963.

 

During a creditors meeting at the King Edward Hotel that month, the receiver noted that untangling Towers’ affairs was “the most complicated matter I’ve ever been connected with” thanks to numerous unfavourable agreements it had made. Sales weren’t helped whenever customers unhappy with one concessionaire’s products said to heck with the rest of them and never set foot in Towers again.

The ultimate solution to the company’s problems was a gradual acquisition by grocer Oshawa Wholesale (later known as Oshawa Group) between 1965 and 1967.

 

The chain’s numbers were boosted when Oshawa converted its Rite-Way discount stores to the Towers banner. The concessionaire model was phased as leases expired. Many stores built thereafter were paired with a Food City supermarket. Apart from some bumpiness in the mid-1970s, the chain became profitable and opened stores around Toronto in spots like the Galleria on Dupont Street.

Despite appearances in shows like Degrassi Junior High, Towers’ modest store count made it an attractive proposition for a sell-off as the 1990s loomed and Oshawa Group concentrated on its food and drug businesses.

 

A bidding war erupted between the Hudson’s Bay Company and Woolworths for the 51-store chain, with HBC emerging the victor in October 1990. Over the next year, most of the stores were converted into Zellers locations.

 

Figuring out where Towers locations were in Toronto without a store list isn’t too difficult: the tell-tale signs are malls and plazas where Zellers was/is located in close proximity to a FreshCo/Price Chopper/Sobeys grocery store.

October 24, 1970

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