The Company was in the middle of an aggressive expansion campaign in 1988, and six new stores were opened. Two of them were full line department stores in the Greater Toronto Area: one in Pickering's Town Centre Mall and the other in the Bramalea City Centre Mall. The stable of new Small Stores continued to grow as well, with numbers 4 and 5 in Rouyn-Noranda, Quebec and New Minas, Nova Scotia. A slightly larger version with more home and hardline content opened in Deux-Montagnes, just north of Montreal. The sixth opening that year proved to be a foretaste of the future. It was the Company's first free-standing furniture and appliance store and it was located in the Oakville Town Centre II outdoor mall just outside Toronto. The 18,000 square foot Sears Furniture and Appliance store offered a vast array of home furnishings and the full range of Kenmore appliances displayed in gallery-like presentations.
A precedent-setting licensing agreement between Sears and McDonald's produced a new line of children's apparel and shoes called "McKids". The launch was judged to be the most successful ever and the line proved to be a major winner in its first season. In October, two-time Olympic Gold Medalist in Synchronized Swimming Carolyn Waldo arrived at Headquarters to launch her new line of fashions, "Carolyn Waldo for Sears". It included swimwear, as well as a range of fashionable and durable activewear.
Larry Cudmore arrived from Sears, Roebuck to serve as the Regional General Manager, Eastern Region. He was soon promoted to President and Chief Operating Officer. It was another excellent year and again new records were set. The 84 stores, over 1,600 Catalogue Sales Units and the other lines of business produced revenues of $4,300,000,000. Earnings were up a substantial 16.6% to $95,700,000.
The Company's legendary leader since 1979 had decided it was time to step aside. Richard Sharpe relinquished his Chief Executive Officer title but continued as Chairman of the Board. Larry Cudmore was appointed President and CEO effective January 1st, 1989. Cudmore left just 11 months later to return to Sears, Roebuck and Co. to serve as President of Retail and Joseph Reddington came back to start his second term as President of Sears Canada, this time with the added responsibility of Chief Executive Officer.
The Mutual Street Catalogue Centre in Toronto had served both Simpson's and Simpsons-Sears since 1916; 72 years later, though, it was simply out-of-date. So it was sold and would eventually become a trendy condominium development called, appropriately enough "The Merchandise Building".
The Company continued to build the new Small Stores. Eight more were opened Truro, Nova Scotia, Bathurst, New Brunswick, in Drummondville and Sorel, Quebec, and in Cobourg, Stratford, Timmins and Welland, Ontario. The full-line stores in Richmond and Saint John were relocated, enlarged and re-opened.
As the 80's wound up, there were 92 stores, 17 Clearance Centres and 1,600 Catalogue Sales Units. For the first time earnings topped the $100 million mark with a final tally of $106,100,000.
New stores were opened in Corner Brook, Newfoundland, Repentigny and Victoriaville in Quebec, and Grande Prairie and Lloydminster in Alberta. This brought the number of department stores to 97. As well, six new Together! specialty stores were opened under a licensing agreement with Together U.K. Ltd. These would be short-lived, however. Along with 18 Sears Clearance Centres, this gave the Company a total of 121 retail outlets. The Company's Clearance Centres helped liquidate surplus merchandise primarily from Catalogue. Revenues were $4,571,100,000 but the receding economy took its toll on earnings which fell to $21,300,000.
On June 4th, Sears scored a major victory by acquiring the leases on eight locations in the country's biggest market. The opportunity arose when the Hudson's Bay Company decided to consolidate its operations in the Greater Toronto Area for the most part by shutting down its Simpsons stores. Sears picked up the leases on five Simpsons and two Bay locations. In addition, under a separate agreement, the Simpsons location at the Woodbine Shopping Centre was also acquired. "Project Phoenix" as the Sears conversion came to be called internally, turned Simpsons locations into Sears stores at Oakville Place Mall, Erin Mills Town Centre, Markville Centre, Fairview Mall, Woodbine Shopping Centre and Burlington's Mapleview Centre in Ontario. For Burlington, this meant closing its location at Burlington Mall, which it had occupied since 1968. As well, The Bay stores at Scarborough Town Centre and Yorkdale Shopping Centre became Sears stores.
In 1991 the Company posted its first loss in over 35 years. Revenue fell by $481,900,000 below the year before, resulting in a net loss of $28,800,000 in earnings.
In addition to the "Project Phoenix" stores, another small store was added in Alma, Quebec, and a new 'A' store in St. Bruno, Quebec, was opened featuring the newest Sears concept in interior design and display.
The KidVantage Wear Out Warranty was introduced on December 27th. The warranty was in the form of a simple and very appealing promise: If kids wear out their Sears clothes before they outgrow them, Sears will replace them, in the same size, free of charge. KidVantage was the first ever such warranty offered in the world.
The suburban Montreal Pointe Claire store opened that year. It was to become the flagship store of the 90's with its stylish atmosphere created by lighting, store configuration and displays. The new Belleville Catalogue Merchandise Service Centre was officially opened in 1992, replacing the Mutual Street Catalogue Centre operations in Toronto.
Although Sears was able to celebrate several big successes that year, a net loss of $90,900,000 couldn't be avoided, the Company's worst earnings performance ever. The Company issued 10.5 million common shares in September. Sears, Roebuck and Co. purchased 50% of this new issue, thereby reducing its majority ownership of Sears Canada Inc. to 61.1% the balance of the issue was sold in the public market.