Annals of U.S. Brands in Canada
There have been two interesting developments in the world of brand-names here in Canada recently, both of which have been very public and somewhat confusing.
The first one is most obvious, as I can’t imagine there’s a television-watching Canadian who doesn’t know that “Cottonelle is changing its name to Cashmere.” For those of you from outside of Canada, Cottonelle is the brand name used by Scott Paper Limited here in Canada for “Canada’s #1 selling bathroom tissue.”
You, like I, may have wondered why Scott Paper, after years of drumming us over the head with the “you can feel the cottony softness… Cottonelle” television commercials, would change horses in mid-stream. It turns out that the change is the result of a complicated set of corporate maneuverings:
- Scott Paper Company, a U.S. company, was founded in 1879 in Philadelphia (reference).
- Westminster Paper Mills, a Canadian company, was founded in 1922 in British Columbia (reference).
- In 1954, Scott Paper Company acquired a 50.1% controlling interest in Westminster Paper Mills (reference). The relationship allowed Westminster Paper Mills to use its new parent company’s brand names in Canada.
- Westminster Paper Mills changed its name to Scott Paper Limited in 1964 (reference).
- The brand-name Cottonelle was introduced by Scott Paper Company in the U.S. in 1972, and sometime thereafter was used by Scott Paper Limited to market toilet paper in Canada.
- In 1997, multinational giant Kimberly-Clark acquired Scott Paper Company (reference) and, with the acquisition, controlling interest in the Canadian Scott Paper Limited.
- Partly due to concerns from Canada’s Competition Bureau, in 1997 Kimberly-Clark sold its interest in Scott Paper Limited to the Canada-based Kruger Company.
- As part of the sale, Scott Paper Limited was given a 10-year license to use certain Kimberly-Clark brands, like Cottonelle, in Canada.
- With the brand licensing agreement soon to expire, in 2004, Scott Paper Limited began the brand transition from Cottonelle to Cashmere (reference).
And so we now wipe with Cashmere, not Cottonelle.
Slightly more dramatic is the situation with Radio Shack, which sort of split into two:
- Radio Shack was founded in 1921 in Boston (reference).
- In 1963, Radio Shack was acquired by the Tandy Corporation and in 1968 Tandy opened the first Radio Shack stores in Canada (reference).
- Tandy Corporation spun off its foreign operations into a company called InterTan in 1986.
- InterTan spun off its UK operations in 1999 and Australian businesses in 2001 (reference), leaving it with operations in Canada.
- In 2004, InterTan was acquired by Circuit City Stores Inc., a U.S. electronics retailer.
- The same week, Radio Shack launched a law suit against InterTan, alleging that InterTan had breached the terms of its brand license agreement.
- In 2005, Radio Shack won its case, when a Texas judge ordered InterTan to stop using the Radio Shack brand name.
- Circuit City subsquently announced that it would re-brand its 900 Canadian Radio Shack stores to The Source by Circuit City.
- The following week, Radio Shack announced that it would be forming a Canadian subsidiary to oversee its expansion into Canada, using the Radio Shack brand name.
The result is that we now have two separate and distinct electronics retailers in Canada: Radio Shack, owned by U.S.-based Radio Shack Corporation through a Canadian subsidiary, and The Source by Circuit City, owned by U.S.-based Circuit City.
If you live in Charlottetown you may have been confused that the Confederation Court Mall location of Radio Shack got re-branded in the middle of last summer while the Charlottetown Mall location has retained its Radio Shack branding. This is about the change: apparently the Radio Shack sign is coming down tonight, and if you visit tomorrow morning you’ll be shopping at The Source by Circuit City.
At Christmas time, however, my Dad was shopping at the Radio Shack in Burlington, Ontario and noticed that it was still a Radio Shack. He asked the store for information and was told that the store was, in fact, one of the new Radio Shack-controlled stores. A call to the store tonight confirms that the Burlington location was the first of the new crop to open, in November of 2005, and that there are currently 9 locations open in Canada.
Research assistance for this post from Betty Jeffery, University of Prince Edward Island, through the isle@ask program.