The luxury retail market in Canada has been experiencing some impressive success in recent years and is poised for even more growth in the coming years.
Lanita Layton, a retail expert and consultant based out of Toronto, said the Canadian luxury market has been very strong and many international brands are currently looking to set up shop in the country for the first time.
“In Canada there’s a certain European sophistication and a large Asian population that embraces it, among other groups” said Layton. “In general, business in retail has been more difficult over the past six months to a year. However the top end of luxury continues to hold and build nicely.”
Layton has an impressive history in the retail industry for a number of years. She was managing director for Hugo Boss in Canada. She was also vice president and general merchandise manager for Holt Renfrew. In the past year, Layton has been consulting for various groups such as Bottega Veneta for their retail launch in Canada, including the first standalone Canadian store in Toronto’s Yorkdale Shopping Centre.
“Overall the Canadian economy, as much as those of us in Canada gripe about it, is still a pretty stable marketplace. It’s a stable economy, we’ve got a conservative banking system. Overall, we’re still in reasonably good shape out there and better than some of our friends elsewhere,” said Layton.
She said there’s no question there are more and more luxury brands that are looking at the Canadian marketplace.
“I think that’s a wise move on their part and particularly from certain countries i.e. the UK where they’ve got other difficulties right now . People are looking to where else can they build a business,” explained Layton. “Where’s a great place to invest? No question Asia is one but the Canadian marketplace also has great potential, there’s less promotional activity here, people embrace fashion and quality.
“Certainly, people I’m talking to are seeing there’s a definite interest in moving into this marketplace. Yorkdale Shopping Centre isn’t stopping any time soon it seems. Not to mention the upscale stretch of Bloor Street West, Yorkville Village/Yorkville Avenue and downtown Vancouver. The most difficult piece for anyone from what I’m hearing is trying to find the location right now. Also in Calgary there’s an interest and there’s certainly a customer there for it. One thing people need to be cautious about and understand is you cannot rely just on tourists. There’s been too much reliance in some cases on the tourists rather than on your local customers. They’re here. They’re wonderful consumers. They appreciate luxury as well. You need to embrace the markets in the regions you’re in. That’s where people are going to have to pay more attention as we go forward.”
Layton said there are a number of international brands that are currently investigating entering the Canadian marketplace, adding that there are still some amazing brands that have yet to establish a store presence in the country. They’re testing the waters with some of their wholesale partners. The LVMH Group of luxury retailers is an example, as is the Kering group of luxury brands.
“They’ve got some brands that still haven’t introduced with their own stores or shops yet. There’s going to be some movement around that,” said Layton. There’s no secret that Holt Renfrew is expanding with major shops with Dior, Gucci and Fendi and other big names, and they’re also opening their own stores . Alexander McQueen right now is one that certainly the Kering group is talking about but we haven’t seen a push into this marketplace yet. That could be an opportunity.
“There’s many other types of brands out there. Certainly with menswear with major growth predicted we’ll probably see more of the Italian and UK brands in particular coming this way expanding with their own stores or shops.”
Layton said that from a logistics point of view Canada presents an environment for a luxury brand where it is easier to focus on certain areas where the population is condensed. The supply chain and everything around that can be less difficult for a retailer. The consumer in Canada embraces the idea of new brands, fashion and quality. Overall, many of the Canadian cities have high per capita incomes and the consumer base therefore has the money to look at these brands.
“Canadians travel a lot. It’s interesting when I’m speaking to some of these brands. The Canadian consumer is part of the Commonwealth for example and we recognize a lot of the UK brands already. There’s less work to be done perhaps around the marketing aspects. It’s a name that’s already known and it’s just building upon that,” said Layton. “The same thing with the Italian brands and the French brands. That’s an opportunity for them.”
But Layton said there are some challenges for international luxury retailers operating in Canada and points to the example of Target. “Companies need to do their homework before setting up shop in Canada. They need to have a team in Canada with Canadians involved. It’s not a matter of just parachuting in people from elsewhere. That’s important for training and coaching and understanding the brand but it’s also important to have people who understand the specific marketplaces, the regionalization, the community, the cultures that are involved as well as Canadian laws.”
Excellent insights into Luxury Retailers and the Canadian opportunity. Thank you to Lanita for sharing.