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Liquidation Nation

With the soaring price of oil, the loss of Imperial Oil’s head office and the rise of a prime minister with no discernible allegiance to Toronto (other than to the Leafs, oddly enough), Ontario has known hard times lately

Jun 1, 2007

by Rick Spence

But now, Ontarians are seeing a glimmer of hope. The news came out of the west like a lightning bolt – or at least like a pair of GE light bulbs in a water-damaged package rescued from some drugstore just outside New Orleans. The crown jewel – or maybe the rhinestone – of Alberta retailing is moving this fall from Calgary to Ontario. Yes, Liquidation World is coming to Brantford.

You couldn’t make up a better metaphor for Canada’s changing economy. Brantford isn’t just the home of Walter Gretzky. It’s the city where the information age began (Alexander Graham Bell thought up the telephone there). But it’s also the town that manufacturing forgot. Brantford was once Ontario’s third-largest city, based on its wealth of railway yards and factories. Massey Ferguson, White Farm Equipment, Cockshutt Plow: the place is a walking punchline. Except that today the century-old manufacturing heart of Brantford has been ripped up and flattened, turned over to Wendy’s, a no-frills grocery store, mini-golf and a casino. It’s like some eerily quiet, post-industrial City of Tomorrow.

Now the irony is complete. Brantford snags the head office of a $200-million public company – and it’s a low-end salvage business that makes No Frills look like a private club. When a Texas grocery store loses its roof, or volcanoes erupt outside Seattle, Liquidation World buyers race to the scene, offering 10 cents on the dollar for distressed merchandise that finds its way to Main Street, Canada. Adding eyesore to injury, Liquidation World is the hermit crab of retail, always looking to move into someone else’s used real estate. In city after city it occupies prime locations on what used to be the best streets in town – before the name-brand stores decamped for the mall on the west side of town.

Torontonians still mourning Imperial Oil were little cheered by news of LW’s move. Few had even heard of the place. Unlike Edmonton or Calgary, Toronto doesn’t have any LW outlets. There was one, once, a decade ago, in a sketchy part of town just across from a Shopping Channel outlet store – just two reasons why the store didn’t last long.

Why Brantford? LW had already been conducting most of its store and buying operations there. Administration and finance were still in Calgary, but given the rising costs and the implausibility of hiring motivated employees for less than $40,000 a year plus an iPod, moving to Brantford (6.4% unemployment) made economic sense.

“Our buyers and buying functions have been located in the East because it’s most proximate to the sources of inventory,” said LW president and CEO Jonathan Hill, evidently unaware of his need for a new speechwriter. “It’s the right thing to do for the company to get all those things under one roof.”

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(Please don’t assume from this that I dislike LW. In a world of retail conformity it’s often the most interesting store in town, carrying unusual merchandise from exotic [if disaster-prone] stores across North America. Like the dollar store, Liquidation World represents an end of an era in retail. Forget ambience. Forget civility and service. If the price is low enough, people will buy anything!)

So I called the Ontario Chamber of Commerce to get its take on this bellwether event. Could this be the beginning of a new growth industry: snagging low-end businesses from more booming economies? Today Liquidation World, tomorrow self-serve car washes? Maybe a payday loans company could take over one of Toronto’s bank towers?

I asked the chamber’s policy expert about the significance of Liquidation World’s move, and whether this might inspire a new approach to Ontario economic development. “I can’t get my head around that,” he confessed, saying he was up to his neck in more demanding economic briefs. Frankly, I wasn’t surprised.

But don’t feel sorry for Brantford. Last fall the city cut the ribbon on Ferrero Canada’s 900,000-square-foot candy plant. No longer do North Americans have to eat imported Nutella or Tic Tacs. As I said, you couldn’t make this stuff up.

Rick Spence is a Toronto-based marketing consultant and former Alberta journalist. He has been known to buy Christmas presents at the Liquidation World on Macleod Trail.

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