As shoppers scramble to pick up bargains at Eaton’s going-out-of-business sale, Canadian magazine and newspaper publishers – particularly in small and mid-sized markets – are bracing for the loss of one of their biggest advertisers.

Eaton’s is believed to have spent more than $50 million in advertising in 1998. The sudden loss of that revenue will be particularly hard for some smaller market newspapers to replace, says Marc-André Charlebois, president and CEO of the Canadian Newspaper Association.

Earlier closings of Eaton’s stores in communities like Guelph and Kitchener, Ont. cost regional newspapers between $160,000 and $180,000 in advertising revenue – a hefty chunk to markets of that size, Charlebois says.

‘With the kind of advertiser Eaton is, the impact is certainly felt. It’s a fact of life and we cannot remain insensitive to the fact that it will have an impact on all our members,’ he says.

Wayne MacDonald, publisher of the Kitchener-Waterloo Record and secretary/treasurer of the CNA, says his newspaper has been preparing for the past three years for the eventual loss of Eaton’s as an advertiser. The process began, he says, when Eaton’s closed its Guelph store, and continued last year when it closed its store in nearby Kitchener. Waterloo, the smallest of the three area stores, is the last to go.

MacDonald, however, is hopeful that buyers will soon be found for the Eaton’s store locations in his market.

‘There has been a decline in Eaton’s presence in the paper over the past two or three years,’ he says. ‘We’re not happy to see them go, but we’ve had to look elsewhere for that ad revenue and we’ll continue to do that.’

The greater fear is that the loss of Eaton’s will have a ripple effect throughout the entire retail community that may force other chains to close, he says.

‘Eaton’s seems to be the only major department store that put forward a vote of confidence in Canadian urban downtowns,’ MacDonald says. ‘The stores that were successful were Sears and The Bay which are out in the malls in the outskirts of the cities. Maybe that was the critical decision.’

Newspapers across the entire country will feel the brunt of Eaton’s demise, says David Cairns, president of Carat Cairns, a Toronto-based media management company. About 62% of Eaton’s ad spending in 1997 was placed in newspapers – about the same ratio as The Bay and Sears.

In 1997, Eaton’s, the Bay and Sears were all spending close to $70 million each in advertising, with about 60-65% devoted to newspapers, he says, adding that, of course, Eaton’s had been spending less in recent years.

The loss of Eaton’s will likely result in a slight drop in advertising prices as media outlets look to fill the hole left vacant by Eaton’s. Although some newspapers may even be forced to trim their news hole to accommodate the drop in advertising demand, Cairns says no one should expect to find any bargain-basement media deals.

‘All media are hot these days and have been for quite some time, so I don’t think you’re going to see any fire sales,’ he says.

Eaton’s well-publicized remake as a fashion retailer last year led it to increase its advertising presence in Canadian fashion magazines – a media category that will also sharply feel the loss of the Eaton’s business, says Mark Jamison, executive director of the Canadian Magazine Publishers Association.

‘We regret (the loss of Eaton’s) on a number of different levels, and not just economic,’ says Jamison, adding that the loss of such a major national account is ‘significant… very significant.’