Zellers is back! Inside the decades-long journey of Canada's favourite discount retailer from extinction to a surprise revival

Rather than relying on the massive layouts of the 20th century, the new owners are deploying a completely reimagined business model. Dubbed “Zellers 3.0,” the strategy centres on smaller standalone footprints measuring between 20,000 and 50,000 square feet. Following a successful modern relaunch at Londonderry Mall in Edmonton, the resurrected brand has officially expanded into Ontario, opening doors at a 25,000-square-foot standalone location on Orfus Road in Toronto, with subsequent plans for Windsor.

Against all odds, the brand is mounting a standalone retail comeback across Canada. But understanding how the retailer returned to modern shopping strips requires looking back at the corporate decisions that led to its initial demise.

The rise of a retail giant

If you walked into a Canadian mall during the 1980s or 1990s, the sights and smells were instantly recognizable. You would pass a quarter-operated Zeddy bear ride at the entrance, navigate through aisles of toys and family apparel and catch the aroma of crinkle-cut fries drifting from a retro in-store restaurant. For generations of families, shopping at Zellers was not just a weekly chore but an integral thread in the fabric of Canadian suburban life.

The story began in 1928 when an Ontario entrepreneur named Walter Philip Zeller opened the first locations, according to historical records from The Canadian Encyclopedia. Following a brief corporate restructuring, Zeller officially launched the chain in late 1931 as a specialized department store tailored for thrifty Canadians.

The business experienced explosive growth over the next few decades, expanding from its roots in southern Ontario into a coast-to-coast powerhouse. In 1978, the Hudson’s Bay Company acquired a majority stake in the business, integrating the discount chain into its national portfolio. By the late 1990s, the brand reached its peak, operating some 350 locations across every province after absorbing key competitors like Kmart Canada and Towers.

Why the lowest price left the law

By the mid-2000s, the domestic retail landscape shifted dramatically. The arrival and rapid expansion of American big-box giant Walmart put immense pressure on traditional Canadian department stores. As consumers migrated toward massive one-stop shopping destinations, the Zellers brand began to struggle.

Seeing an opportunity to monetize its extensive real estate portfolio, then-parent company Hudson’s Bay Company made a monumental announcement. In 2011, the company agreed to sell the leasehold interests of up to 220 of its stores to Minneapolis-based Target Corporation for 1.825 billion dollars.

Following the multi-billion dollar transaction, a corporate spokesperson noted that continuing to operate the banner in its current form was simply not viable for the parent firm. By March 2013, the vast majority of traditional locations closed their doors permanently to make way for the American newcomer. A tiny handful of liquidators held on for a few more years, but by January 2020, the final traditional outlets quietly shuttered.

The journey back to Canadian shelves

The brand appeared completely dead, but its intellectual property held immense nostalgic value. After a brief period operating as small pop-up departments inside remaining Hudson’s Bay stores, the entire corporate landscape fractured, paving the way for the Benitah family's acquisition and the current standalone "Zellers 3.0" locations welcoming shoppers today.