Unique L’Oreal-owned fragrance brand Atelier Cologne has opened its first Canadian store location at Toronto’s Yorkdale Shopping Centre. It could be the first of multiple stores in Canada for the brand, which is growing its base of stores globally.
We sat down with co-founder Sylvie Ganter, to discuss the new store last week, where she explained her passion for the fragrance brand that is considered to be the first fragrance house entirely dedicated to cologne. Atelier Cologne was founded in Paris in 2009 by the husband-wife team Christophe Cervasel and Ms. Ganter, who met in New York City in 2006 and subsequently founded the business based on their shared passion for fragrance.
CO-FOUNDER SYLVIE GANTER AT THE ENTRANCE TO THE NEW YORKDALE STORE.
High-quality raw materials are used to make the company’s fragrances, which are also considered to be unisex. More than 140 products are on display, including the Maison de Parfum’s best-selling fragrances such as its recently launched Iris Rebelle. There’s a selection of 32 Colognes Absolues as well as Atelier Cologne’s line of soaps, shower gels, moisturizing body lotions, hand creams and a collection of candles for the home. All are “produced with traditional French craftsmanship”, according to the company, with prices ranging from about $35 to almost $300 for fragrances, depending on sizes.
A unique feature in the store is two walls of coloured leather cases for fragrance bottles that can be personalized with an on-site engraving machine. A total of 17 colours are available and Atelier Cologne’s candles (priced at $95) include leather tags that can be customized. The store also features a gift wrapping station. Customers are encouraged to buy multiple fragrances in an effort to create a “fragrance wardrobe” depending on mood and activities.
Inside of the new Yorkdale Store
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Ms. Ganter revealed that Yorkdale will be a test store for the brand before it expands to more locations in Canada. The intimately-sized 625 square foot boutique, which is located in a modern shopping centre, has the appearance of being a well-established ‘atelier’ featuring antiques throughout the space, as well as an attractive Venetian blue facade that appears historical. Wood sets off the space that contains industrial furniture, vintage lamps and stools that were obtained by the founders during their global travels. A central island includes small orange tree plants and citrus fruit is displayed in the space — citrus is a base for many of Atelier’s fragrances, hence the reference. The historic-looking facade and interior could see the store easily fit in on a street in Vancouver’s Gastown or in Toronto’s Distillery District.
Atelier Cologne now operates 15 boutiques globally, with three of those being in the United States (two New York City locations as well as a boutique in San Francisco). Other stores are located in Paris, London, Hong Kong, China, and Korea. Boutiques range in size from about 250 square feet to about 1,000 square feet and include a mix of street-front and mall stores.
The brand launched at Sephora in Canada several years ago, and it continues to partner with retailers such as Nordstrom. Standalone boutiques allow Atelier Cologne to create an enhanced brand awareness while also showcasing its entire wares in a dedicated environment.
Penguin Random House Canada has discovered a unique and innovative way to connect specialty retailers to its books.
Following on the success of a gift show last fall, the company is holding another event for retailers this Spring in Toronto.
Mary Giuliano, director of independent retail sales for Penguin Random House Canada, said the company has “fabulous space” at its office at 320 Front Street West where it can host its gift show.
“We have a ginormous room that is actually three rooms that we can make into one very big room. We’ll basically have a showroom setup with different vignettes of different books. So we have space for cookbooks, food and drink, a space for kids books, a space for literature, a space for interior design or art books, for example.”
The idea is to expose specialty retailers to books associated with their business. It’s a fantastic opportunity for retailers to come to Penguin Random House Canada’s office and see a showcase of its books in relevant categories that they might be interested in adding to their retail assortment.
Retailers have an opportunity to chat with sales reps about titles and the company’s processes, open an account if they don’t have one already, place an order on the spot and enjoy snacks and complimentary swag bags.
“So if you’re a florist for example a really good way to increase the value of your purchase is adding something to it. And one of the easiest things to add is a book. There’s a book for every retailer out there. If you’re a florist, we have flower books,” says Giuliano.
PENGUIN RANDOM HOUSE OFFICES AT 320 FRONT ST. W. IN TORONTO
“A book is an easy way to add an incremental sale to your main thing that you’re selling.”
If a retailer is interested in a specific topic, Penguin Random House will be able to curate a list electronically for them.
“We want to make it as convenient and simple for anybody to attend who is a specialty retailer, existing account or new account,” adds Giuliano.
“A lot of people look at books and have no idea how the book world works and there’s small stores who don’t have a lot of time to research. How do I open an account? How do I get my hands on those books? So we want them to come out and take a look at what we have to offer and we can open an account with them, explain our terms and really hand hold them while they go through the process and give them the stuff they need to make it really simple to add to their average sale in their store.”
Its first gift show was held in October.
“We know we will continue to attend the regular gift shows that happen across the country. We will still go to the Toronto Gift Show and Alberta and this year we decided to give Vancouver Gift Show another try. But what we realized is that we have this huge space,” explains Giuliano.
[‘PENGUIN SHOP’ ON THE STREET LEVEL AT 320 FRONT ST. W. IN TORONTO]
“We’re very well located in downtown Toronto so why not take advantage of the space and the location that we have and encourage existing accounts as well as new accounts, like small mom and pop stores downtown. We all know there are neighbourhoods in every city where there’s a resurgence of small independent retail, so we have this in house gift show for them to come into the office at a time that may be more convenient for them.”
The gift show is located on one of the three floors the company occupies in the office tower.
“We do however have a shop on the ground level – the Penguin Shop – which is a very small shop. It’s 158 square feet and is a very Instagrammable space and super cool space that features a variety of books as well as Penguin merchandise . . . where we sell to the public,” says Giuliano.
New York City-based sleep brand Casper has announced that it will commence a Canadian retail expansion that will include permanent standalone stores, as well as a new Canadian headquarters and manufacturing facility. The company has seen explosive growth after being founded as an online retailer in 2014.
Casper says that it will open stores across the country, including in provinces such as Ontario, Quebec, British Columbia and Alberta. Its first two stores will be in Toronto, one of which will open next month. Casper will also open a new Canadian headquarters in Toronto, and it will also begin manufacturing its products in Canada, creating about 75 jobs.
Casper’s first Canadian ‘Casper Sleep Shop’ will open next month at Toronto’s CF Sherway Gardens, which is one of Canada’s top performing shopping centres in terms of annual sales per square foot. Casper’s move into the centre signals that it will be seeking out premium locations for its expansion and according to Senior Director and General Manager of Casper Canada, Nicole Tapscott, Casper’s second Canadian location will open later this year in downtown Toronto.
Ms. Tapscott said that she wasn’t yet able to provide further details as to the location of Casper’s new Canadian headquarters as well as other store locations, and that more exciting announcements will be made next month to coincide with the CF Sherway Gardens store opening. Details pertaining to that store will be released as well, with Casper launching a Canadian retail expansion that landlords have said has been in negotiations for months.
“We’ve seen tremendous success in Canada with three years of triple digit growth,” said Philip Krim, co-founder and CEO, Casper. “Investing further in the market and expanding our local presence will enable us to bring better sleep to even more Canadians across the country.”
Casper launched a US pop-up expansion in the fall of 2017, opening 18 locations across the country. Casper’s first permanent US location opened in February of this year, which means Canada wasn’t far behind. Ms. Tapscott noted that Canada is a very strong market for the brand, and that Casper’s pop-up activations were hugely successful here. The first US store, which spans about 3,000 square feet, is located in New York City’s Soho at 627 Broadway. Stores such as its Mall of America pop-up are of a similar size.
Casper is hugely successful and is backed by celebrities including Leonardo DiCaprio, Tobey Maguire, Adam Levine and Ashton Kutcher, launched in 2014 as a direct-to-consumer online mattress retailer, with its product delivered in a “how did they do that?” sized box. Casper’s memory foam mattress comes in a variety of sizes, and the company has expanded its product assortment to include a “perfect pillow” pillow-in-a-pillow and soft, breathable sheets, frames, and even dog beds and other sleep-related products.
We first reported on Casper’s Canadian expansion in August of 2016, when the company unveiled temporary “snooze rooms” in selected cities, following a spring 2016 “Napmobile” tour that saw stops in Vancouver, Calgary and Toronto. Casper found that having a physical presence created consumer engagement and provided feedback not found online — not to mention, consumers enjoyed being able to test the popular memory foam mattresses prior to buying.
In March of 2017, Casper launched its first retail presence in Canada through a partnership with Williams-Sonoma-owned retailer West Elm, in Toronto. Casper products had only been available online until then, and the West Elm partnership was the first time that Casper offered its products with a retailer on a cash-and-carry basis, anywhere. The partnership has since concluded.
Casper unveiled its ‘Casper Cottage’ pop-up on Toronto’s trendy Ossington Avenue in July of 2017. The unique temporary space was made to look like a home decor store at the front, with a row of beds at the back. The pop-up was a hit and no doubt helped solidify plans for permanent retail stores in Canada.
In February of 2018, Casper announced that it has partnered with Canada’s Indigo Books & Music to house shop-in-store ‘nap pods’, as well as offer pillows in about 30 of its stores that can be purchased on a ‘cash-and-carry’ basis.
Next month we’ll be reporting on the new CF Sherway Gardens Casper retail space, as well as providing further details on other locations as well as Casper’s new Canadian headquarters and manufacturing facility as details are provided.
Rudsak, Canada’s upscale outerwear and premium leather goods brand, has launched its direct-to-consumer presence coast-to-coast in the United States with plans as well to open its first American bricks and mortar retail outlet within the next year.
Lambros Piscopos, the company’s Executive Vice President and CFO, said the brand will be available across the U.S. at rudsak.com and includes a curated selection of best-selling and coveted pieces. All orders qualify for free shipping via FedEx Ground.
“We’ve been operating in the U.S. since 1997 on a wholesale basis,” he said. “Having a direct to consumer presence is a natural evolution of the company’s growth.”
Image: Rudsak
Piscopos said about 15 per cent of the company’s online engagement already comes from the U.S. through social media and the existing ecommerce site.
Rudsak currently operates over 30 stores in Canada and has quadrupled its store footprint since 2010. Looking ahead through 2018 and into 2019, Rudsak will be available in a curated selection of boutique retailers around the world. The company also plans to open its first U.S. store within 12 months, said Piscopos.
From iconic leather jackets to down-filled coats, the company is renowned or fusing timeless design with seasonal trends for elevated functionality. Handbags crafted from the finest Canadian and European leathers and featuring exclusive hardware also highlight Rudsak’s celebrated reputation.
For the Spring/Summer 2018 collection, Rudsak has introduced fresh patterns and evocative prints. The company says new colours including Desert Rose, Flame, and Moss add a bold touch, while leather accents and signature hardware enhance the line’s urban elegance. Statement-making ensembles come together with Rudsak’s lightweight down jackets, transitional trench coats, leather handbags, clothing, and accessories.
Rudsak, established in 1994, is a privately-owned Canadian luxury fashion company.
As for Canada, Piscopos says there may be opportunities for further expansion. The company recently invested and upgraded its ecommerce site.
“Although we’re always looking at optimizing our retail store footprint, there continues to be growth opportunities in our domestic market,” said Piscopos.
Colorado-based Smartwool couldn’t have picked a better place to open its first branded Canadian store – Banff, located in the heart of the Canadian Rockies.
Smartwool caters to all sorts of outdoor enthusiasts with its unique Merino wool products as well as a selection of Timberland footwear.
Randy Scriber, store manager of Smartwool Banff, said the store opened March 24 on the busy Banff Avenue.
“It’s a very busy street,” said Scriber. “It’s a branded Smartwool store and Smartwool is like a Merino wool brand that originated in Colorado – in Steamboat Colorado actually which is also another little ski town very similar to Banff.
“And that includes socks, base layer, technical apparel for running, biking, hiking, cross country skiing, ski touring, downhill skiing, camping. The whole gamut. But it also includes the lifestyle line which is also using wool but it’s adding in that kind of mountain lifestyle look. We have an item that’s super Canadian-looking called the Anchor in the red and black plaid. It’s like a big wool sweater that’s got buttons down it and looks very Canadian. Iconic piece. A lot of people know us as a sock and base layer brand but we have actually quite a broad range of apparel as well.”
The store has about 1,000 square feet of retail space.
On its website Smartwool says its story started on a rugged Colorado ski slope with the belief that toes didn’t have to be cold.
“One simple pair of Merino socks challenged the conventional wisdom and forever changed the way outdoor enthusiasts looked at their feet. It’s not just about the Merino, though. It’s what we do with it that makes Smartwool different. For over 20 years, we’ve been pushing the boundaries of Merino to create smarter, more capable products from head to toe,” says the company.
Image: SmartwoolImage: Smartwool
“At the heart and soul of every SmartWool product is the amazing fiber we use: nature’s finest Merino wool. Used properly, we think Merino wool is the best fiber available for outdoor apparel — it manages moisture better than cotton, is smarter than synthetics and is more comfortable in any weather condition. In our hands, it becomes extraordinary.”
Scriber said Banff is a great place for Smartwool to open its first Canadian store because it has such a captive audience.
“You have a lot of people walking up and down the street and there’s a lot of people with disposable income because they’re on a vacation in a pretty expensive place. It’s a good place to open a store,” he said. “Obviously you have to carry the right items. You can’t just throw up a store and carry just anything. It’s been great since we opened.
“We built a pretty beautiful space and that’s what we were about. We weren’t just about building a retail space. We wanted to build a space that actually spoke to the area. The idea was to bring the outside inside. We have a little stone path around the store that you’re kind of like still walking on the trail. We have a very large projector doing a screen that Sherpas Cinema created for us. It’s a little six minute and 45 second flyovers of all the local mountains. It’s a very mountain lifestyle feeling in the store and a little like the outside being brought inside. You can kind of get on the trail in the store you’re shopping.”
Scriber said the brands in the store support that as well. Brands fit the mountain lifestyle feel and appeal.
Canada’s biggest retail conference, STORE 2018, takes place at the Toronto Congress Centre this year on May 29-30, and registration is now open. The conference, hosted by Retail Council of Canada, showcases some exceptional speakers as well as networking opportunities.
Deborah Weinswig, Managing Director, Fund Global Retail & Technology
Nicole Leinbach Reyhle, Founder, RetailMinded.com
Kevin Graff, President, Graff Retail
Cathy Hotka, Principal, Cathy Hotka and Associates
Doug Stephens, Founder, Retail Prophet
Diane J. Brisebois, President and CEO, Retail Council of Canada
Join over 2,500 retail leaders from across North America for two days of discussions and learning at STORE 2018. There will also be ample networking opportunities, as well as two awards dinners, with more details to follow.
There’s a special discounted rate for Retail Council of Canada Members to attend STORE Confernce 2018.
As China-based high-end mattress and bedding company DeRucci Beddings Company Ltd. continues to expand its massive global footprint, the company is setting its sights on growth within the Canadian market.
DeRucci, based in China, was founded in 2004. The company has more than 3,000 stores around the world, in markets including Asia, Australia, Europe and North America.
DeRucci specializes in high-end beds and mattresses that are designed to provide a better night’s sleep. The company has invested in ergonomic research and technology in an effort to produce mattresses that are comfortable, supportive and functional, while also contemporary in design.
“The company’s mission is to help people sleep better,” says Mercury Ma, president of DeRucci in Toronto.
Most of DeRucci’s products are manufactured in China, however many of the products are designed in France and Italy, and are made from materials sourced in Europe. The company’s mattresses retail for prices as high as $20,000, however most items range from $1,500 to $5,000, Ma says.
“We have very, very high-end mattresses,” he says. “We target medium to high-end customers, and they are very focused on quality.”
DeRucci opened its first two Canadian stores in Vancouver approximately two years ago. In December, the company opened a third Canadian store in Markham, Ont., in the SmartCentre Markham Woodside plaza.
The new store is approximately 8,300 square feet in size, and boasts a luxury feel, according to Lawrence Mosselson, vice president of leasing and consulting with S&H Realty Corp., which is working with DeRucci on site selection in Ontario.
“It’s definitely higher end,” Mosselson says. “It has a European feel.”
In addition to mattresses and beds, DeRucci carries a variety of other bedroom furniture, as well as certain other home furnishing items, such as sofas and home décor accessories. The company’s main focus, however, is its bedding systems.
“Anything that you would find in a bedroom,” Ma says, “we have it.”
DeRucci is interested in expanding into other cities in the Canadian market. In the near term, however, the company is focused on growing in Greater Toronto and Vancouver, and fostering brand recognition within those markets.
As the company explores opportunities for new showrooms in the Canadian market, it is interested in a wide variety of types of locations, including outdoor shopping plazas, enclosed shopping centres and standalone sites, Mosselson says. The company is focused on locations ranging from 3,000 to 5,000 square feet in size.
“The intent going forward is to open smaller, satellite showrooms,” Mosselson says.
YSL BEAUTY OPENS ITS FIRST FREESTANDING POP-UP SHOP IN CANADA. PHOTO: HANNAH YAKOBI AND COURTESY OF YSL
By Michael Gilburt and Horatiu Porime
In recent years, the retail landscape has taken a novel turn with the rise of pop-up shops, which occupy retail space for short periods, anywhere from a few hours to over a year.
Luxury brands, online retailers, and celebrities alike have opened pop-up shops in locations as varied as shopping centres, trendy neighbourhoods, popular shopping districts, and even a moving downtown streetcar, showcasing the latest products and services one day, and disappearing the next.
Paired with the rapid spread of information on social media (often via teasers and mysterious references to “secret locations” with details to follow), pop-up shops have become a powerful marketing tool.
Pop-up shops bridge the gap between traditional brick-and-mortar retail and internet-based retail. An example is the men’s suiting brand, Indochino, which initially started as an online retailer. Following its online success, Indochino entered the brick-and-mortar market, initially via a series of pop-up shops, which led to a growing number of permanent locations.
The rising popularity of pop-up shops has coincided with the growth of e-commerce, particularly as shopping centres and retailers now place a greater emphasis on the experiential aspects of shopping.
(CASPER POP-UP AT TORONTO INTERNATIONAL FILM FESTIVAL)
(THE PEDESTRIAN PASSAGE OVER DUNSMUIR STREET AT HOLT RENFREW IN VANCOUVER WAS TRANSFORMED INTO A “PRADA SPIRIT POP-UP SHOP” FROM FEB. 8-19 OF THIS YEAR. RENDERING COURTESY OF PRADA)
With the growth of online shopping, brick-and-mortar establishments are increasingly looking to broaden the shopping experience to include a more experiential element that will draw customers to their stores. Retailers look to their online elements as a means of distributing and marketing the products they sell, while a brick-and-mortar presence enables them to engage with their customers more directly. Pop-up shops, with the attendant buzz that often starts online and culminates in an interactive in-store experience, are an ideal medium for such engagement.
From a business perspective, pop-ups have compelling propositions for both landlords and tenants. While most landlords would prefer more stable, long-term tenancies, the pop-up provides an opportunity to generate rent from otherwise vacant premises. This is especially advantageous in light of the recent flurry of insolvencies across the retail industry.
Pop-up shops also enable landlords to vet potential tenants in advance, essentially providing a “trial run” before committing to a long-term lease. Landlords also benefit from increased customer traffic brought on by pop-ups, as customers come back to see the latest tenant and the latest products and services offered.
Tenants view the pop-up model as an effective means of gauging public reaction to new products, concepts and services, without the commitment of a traditional long-term lease. Pop-up shops also allow tenants considering expansion into an underserved area to determine whether the location is viable from a business perspective. For online retailers, pop-up shops provide a showroom for their products, which can then be purchased online (as illustrated by the example of Indochino).
Given the unique nature of pop-up shops, there are a number of legal considerations of which parties considering a pop-up relationship should be mindful. This article highlights a few of those considerations.
[Below: Louis Vuitton fragrance pop-up at Toronto’s Yorkdale Shopping Centre]
Louis Vuitton fragrance pop-up at Toronto's Yorkdale Shopping Centre
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(AIR FRANCE POP-UP AT TORONTO INTERNATIONAL FILM FESTIVAL)
Use of the Pop-Up Shop
In any pop-up agreement, whether within a shopping centre, street location or other multi-tenant development, the tenant’s right and ability to use the premises for its specific business, and the landlord’s control of the various uses within the shopping centre or development, are among the most fundamental and important terms.
Principal among these provisions is the tenant’s use clause. A use clause will restrict the tenant to using its premises for a specific purpose and may include a list of agreed-upon products or services that a tenant may sell in its premises.
A tenant will want to ensure the use clause is drafted as broadly as possible in order to retain the flexibility to adjust their product offerings to respond to consumer demand, implement a change in business strategy or carry out promotional events from the premises that include a variety of uses (such as the pairing of food and entertainment services with the sale of clothing).
By contrast, a landlord will want to ensure the use clause is very clear and specific to protect tenant mix within a multi-tenant development and to protect itself from breaches of any exclusivity rights granted to other tenants. For example, if the landlord has given another tenant the exclusive right to sell jeans, giving a pop-up tenant an unrestricted right to use the pop-up shop for any lawful purpose could result in a situation where the exclusive right is breached.
Parties considering a pop-up relationship should also undertake the necessary due diligence to confirm that the proposed use of the premises is permitted by applicable zoning and municipal regulations, particularly where the proposed use differs significantly from the manner in which the premises has been used previously.
The use of a pop-up shop may also require that certain licenses be acquired, such as a liquor license or an event license. In addition, while signage is an item that tenants often consider integral to the marketing impact of a pop-up shop, there are often restrictions imposed by municipal regulations and zoning legislation on the size, location, and type of signs that are permitted.
Accordingly, a pop-up tenant should begin its planning phase by gaining an understanding of how the municipality’s regulations will affect its intended use of the space.
VEUVE CLICQUOT OPENS RETAIL POP-UP SHOP IN MONTREAL
GOOP POP-UP AT NORDSTROM AT CF TORONTO EATON CENTRE IN THE SPRING OF 2017.
Type of Governing Agreement
Parties to a pop-up relationship should be mindful of the advantages and drawbacks of the various types of agreements that can be used to document such an arrangement.
A pop-up relationship may be documented in the form of a license agreement, which permits the grantee to use a portion of the grantor’s property for a certain purpose for a limited period of time. A license, as opposed to a lease, does not include a right of exclusive possession of the space and does not create an interest in land.
While leases are complex documents, licenses are relatively uncomplicated and may be suitable for a relatively simple pop-up arrangement with simple business terms. A license is also advantageous to the landlord who needs flexibility while looking for a permanent tenant, as it generally allows a landlord to terminate the arrangement at will, upon reasonable notice.
Leases, on the other hand, do create an interest in land, and include a right of exclusive occupation. The downside in a pop-up relationship is that given the complexity of a lease, it may take longer to negotiate and draft when compared to a license. A lease is also not as flexible from a termination perspective, as terminating the landlord-tenant relationship inherent in the lease may be more complicated than doing so in a license arrangement, from both the landlord and tenant’s perspective. It does, however, afford the opportunity for greater protections for both parties and is recommended if the business arrangement is more complex and greater safeguards are required.
Despite what the parties may call the arrangement, whether an agreement is a lease or a license depends on the substance of the agreement. Clarity and precision in drafting are essential in order to avoid misunderstandings and unintended consequences. Improper termination of a lease or license can have adverse consequences, including a claim for damages.
(MUJI POP-UP IN VANCOUVER — MUJI TESTED THE WATERS AND CREATED BUZZ PRIOR TO OPENING PERMANENT STORES IN THE MARKET. PHOTO: RETAIL DESIGN BLOG)
‘CONCEPT’ AT YORKDALE — THE 3,600 SF SPACE HOUSES A ROTATION OF POP-UPS.
Percentage Rent and Online Sales
A common rent structure under many pop-up agreements involves the payment of rent based on a percentage of the tenant’s sales of merchandise and services from the pop-up shop (referred to as “percentage rent”).
Many tenants, particularly start-ups and online retailers looking to test-run the viability of a brick and mortar location, prefer a percentage rent structure over a fixed rent structure as the rental payment correlates directly with the success of the tenant’s business and will preserve the tenant’s cash flow (percentage rent is typically paid after the fact based on a report of gross sales figures for the relevant period). Accordingly, if the pop-up shop underperforms, the payment of a percentage rent will be less burdensome to the tenant. However, for the same reason, such a rental arrangement has the potential to leave landlords with little to no rental income. Nonetheless, in the right circumstances, a landlord may decide that a percentage rent structure is viable for a pop-up shop, particularly in the case of a high-profile brand that has a demonstrated track-record of success and holds the promise of attracting more customers to the development.
Once the parties to a pop-up relationship have agreed on a percentage rent calculation, they must turn their minds to how “gross sales” will be defined in the pop-up agreement. The types of transactions that are included and excluded from the definition of “gross sales” will have a significant impact on the amount of percentage rent a tenant will end up paying. Accordingly, a tenant will want to limit this definition as much as possible while a landlord will want to broaden it as much as possible.
For pop-up tenants with a strong online presence, it is important for both parties to understand how online sales will be treated and accounted for from the beginning so that both parties can determine whether a percentage rent structure makes sense and, if it does, what types of online sales activity should be included and excluded from the definition of “gross sales”.
Given that online sales are an area where many pop-up tenants primarily focus their business, the failure to capture these sales in the definition of “gross sales” may result in lower rents than a landlord had anticipated. By contrast, a definition that captures all forms of online sales may result in a rent that far exceeds the tenant’s budget. Accordingly, tenants should seek to exclude all online sales of merchandise except those which are made through the tenant’s in-store point of sale system and fulfilled at the premises.
MAGNUM POP-UP. SUMMER OF 2013, PHOTO: MAGNUM
Landlords, on the other hand, should seek to ensure that “gross sales” captures all internet sales that ‘touch the store’, particularly in the case of pop-up shops which are operated as showrooms. For example, purchases made by customers in a pop-up shop through store-owned tablets which are fulfilled with merchandise at a distribution centre may ‘touch the store’ but may not be registered as sales through the in-store cash register. As this example illustrates, there are many ways an online sale can ‘touch a store’. How the parties distinguish between online sales which are included and excluded from “gross sales” will depend on the nature of the operations of the pop-up tenant and the negotiating leverage of the parties.
With the continued evolution of consumerism toward experiential marketing and the emergence of e-commerce as a viable secondary retail channel, it is clear that the pop-up phenomenon is no flash in the pan. With its understanding of the unique business and legal issues facing the parties in a pop-up relationship, the Commercial Leasing Group at Blaney McMurtry can help landlords and tenants successfully navigate these issues and prepare the legal documentation necessary to achieve their goals.
Michael Gilburt and Horatiu Porime are members of Blaney McMurtry’s corporate/commercial and commercial leasing practice groups.
Michael Gilburt‘s practice encompasses all aspects of commercial leasing. He regularly advises and assists businesses of all sizes with the negotiation, drafting, and review of retail, office and industrial leases. He also advises on such related issues as redevelopments, default and termination. Michael can be reached at 416-593-3981 and mgilburt@blaney.com.
Horatiu Porime conducts a general practice in corporate and commercial law. Horatiu can be reached at 416-593-3904 and hporime@blaney.com.
Iconic Calgary downtown retailer Billy’s News, which has been a city landmark business for more than 100 years, has closed its doors because of future redevelopment plans for the historic Lougheed Building.
The news magazine store, which was located at 604 1st St. S.W., had to close shop as the owner of the Lougheed Building is planning a future re-purposing of the site.
The owners of Billy’s News could not be reached for comment.
This is the third time in the past six years that downtown office building development has impacted the retailer.
In June 2012, it moved from the old Herald block, where it had resided for many years, to the Art Central building a couple of blocks away as the Herald structure was being demolished to make room for the new Brookfield Place office skyscraper.
Then a few years later, the Art Central building was being demolished to make room for the new TELUS Sky office/residential tower.
Billy’s then found space to lease at the Lougheed Centre in 2014.
“Billy’s news was known as a legacy retailer having operated continually in various locations in downtown Calgary for over 100 years,” said Michael Kehoe, an Alberta-based retail specialist with Fairfield Commercial Real Estate in Calgary, which represented Billy’s in its leasing deals. “The firm fell victim to a changing media landscape, the soft economy in downtown Calgary and having been forced out of its past three locations over that past six years due to downtown redevelopment projects.
BILLY’S NEWS (BOTTOM RIGHT) IN LOUGHEED CENTRE BUILDING. PHOTO: GOOGLE MAPS
“Perhaps the Billy’s brand may re-emerge in the future depending on the owner’s appetite to carry on. The retail landscape is continuously changing and adapting to consumer demand and the pace of change has accelerated in the recent past especially in the downtown core.”
The building has 90,496 square feet of leasable space comprised of 69,557 square feet for office and 20,937 square feet of retail.
It was renovated in 2006/2007.
It’s a restored six-storey, brick and beam office/retail building with a finished penthouse and is now vacant.
“The Lougheed Building was our first acquisition in Calgary and remains a prized element of our portfolio in Western Canada. While we haven’t finalized our repositioning strategy for the property, we’re confident that it will be both socially and economically successful,” said Michael Emory, president and CEO of Allied Properties, in a statement.
LOUGHEED CENTRE. PHOTO: ALLIED PROPERTIES REIT
The City of Calgary, on its inventory of historic resources website, describes the Lougheed Building as a“Classical Revival style building with a brick façade and elaborate cornice across the top.
“Senator James Lougheed, a prominent Calgary lawyer, businessman and politician, purchased thirty lots in downtown Calgary from the C.P.R. in 1884, and saw his land become the central core area of the city. He remained active in development, and in 1911 he built this six-storey brick structure at the corner of 1 Street and 6 Avenue SW.,” says the City.
“The architect was D.S. McIlroy, also the designer of the First Baptist Church. A large portion of the building was occupied by the Grand Theatre Opera House (for a time known as the Sherman Grant Theatre). The Grand Theatre was used for worship by both Central United Church and Knox United Church while they were rebuilding. Besides the theatre, there were originally stores on the ground floor, commercial sample rooms on the next two storeys, and two and three-room living suites on the top floors.
“The heritage value of the Lougheed Block lies in its representation of Calgary’s tremendous commercial growth prior to World War One. The block served as a major centre of commercial activity for most of the twentieth century. It is a good example of the Chicago Style of commercial architecture, which embodied the sense of optimism in Alberta’s economy. One of the few remaining examples of this style of architecture in Calgary, it is a familiar landmark in downtown Calgary.”
And then there was One: French Connection Significantly Downsizes in Canada
UK fashion brand French Connection has been progressively closing its Canadian stores over the past five years, and it now operates one store location at 1181 Sainte-Catherine Street West in Montreal. The company’s second-last Canadian store location recently closed at CF Sherway Gardens in Toronto.
Since 2013, French Connection closed four other Toronto stores, as well as a location in Vancouver. In 2013, French Connection’s store at 11 Bloor Street West closed, and the site is now part of the construction of Sam Mizrahi’s ‘The ONE’. A French Connection at Toronto’s CF Toronto Eaton Centre closed in 2014, and closures on Queen Street West and Yorkdale Shopping Centre followed. A store on Vancouver’s Robson Street shuttered in 2016.
Known for its cheeky ‘FCUK’ branding (stands for ‘French Connection United Kingdom’), the French Connection brand appears to have lost some of its popularity not only in Canada, but internationally. There’s a lot of competition in the Canadian market as international retailers continue to open stores, and brands such as French Connection need to establish their place and maintain their popularity through consistent marketing, not to mention offering products that consumers desire. The company, which was founded in 1972 and is headquartered in London, continues to operate standalone stores as well as distribute via wholesale channels globally.
A representative at French Connection notes that the company will continue to maintain a Canadian presence through its Montreal brick-and-mortar location, as well as with its Canadian e-commerce site: https://canada.frenchconnection.com.
‘Melissa’s Musts’ Pop-up Brings On the Haute
Melissa Evans-Lee is not only Bayview Village’s Marketing Director but she is the de facto resident fashionista and decorista who is curating a month-long pop-up shop of ‘haute’ must-haves for Spring.
‘Melissa’s Musts’ has popped-up near the Centre’s lobby on for the month of April. Evans-Lee has carefully hand-picked the season’s most exceptional items from Bayview Village’s retailers so guests can expect the hottest fashion trends, top beauty picks, culinary essentials, glam gifts and more.
This current pop-up follows last year’s wildly successful “The Haute Spot” at which Evans-Lee featured a month full of marvellous, sold-out events at one of Canada’s most prestigious shopping venues Bayview Village Shopping Centre. This lifestyle centre, through its over 110 upscale tenants, is a highly-curated collection of one-of-a-kind boutiques, restaurants and services.
Over the next month, guests can make purchases on-site and are encouraged to consider this pro-tip: visit frequently, a limited quantity of items will be available and, once sold, new merchandise will be introduced.
MOOOoove Over Big Meat, Copper Branch is Re-defining QSR with More Locations in the Works
With plans to open dozens of vegan eateries across the country, Copper Branch is changing the QSR experience, with a menu comprised of 100% plant-based power foods. The company aims to be ‘the undisputed leader in healthy fast-casual foods.’
Established in Montreal in 2014, Copper Branch currently operates 17 locations – 13 in Quebec and 4 in Ontario – with plans to more than double its footprint by the end of the year. This ambition extends into 2019 with 10 more in the works. The company’s ideal spaces are 1,250 to 2,000-square-feet in open-air centres and 450 to 1,500-square-feet in enclosed malls.
With the assistance of initiative partner chartered real estate brokerage Think Retail, under the direction of Tony Flanz, Copper Branch continues its push into Ontario, with restaurants slated to open in Markham, Peterborough, Bowmanville, Kingston, Oakville, Newmarket, East Gwillimbury, Mississauga, and Ottawa.
In addition, the company is to open six confirmed locations in its home province of Quebec in Candiac, Anjou, Rimouski, Saint-Jean-Sur-Richelieu, St. Laurent, and Cote Vertu.
After 25 years owning several traditional fast-food franchises, entrepreneur Rio Infantino set out to revamp the QSR experience with nourishing gourmet power foods designed to appeal to a mainstream audience seeking clean healthy meal option, and he is succeeding!
Note: Copper Branch’s expansion representation is as follows:
Shoppers Drug Mart Unveils New Wellwise Store in Etobicoke
Offering everything from sleep therapy to low-impact fitness and physiotherapy products, the newest Wellwise in Etobicoke, is exactly what the doctor ordered for Canada’s ageing population. For the first time, there are now more Canadians over the age of 65 than under 15, and they are not going to grow old quietly. Today’s seniors want to take control over the way they age and Shoppers Drug Mart launched the Wellwise stores in 2017 to tap into this market.
The Etobicoke Wellwise differs from the original in Leaside neighbourhood of Toronto with the inclusion of the full-sized vignettes where shoppers can walk through a model bedroom, bathroom, living room and garage to try out products to see how they would fit into everyday living. Soon the store will also feature an innovation space where new products, that haven’t hit the market yet, can be tried, and a community room for associations and experts to run education events.
The grand opening was held last week with a ribbon-cutting ceremony and store tours.
Maje Celebrates Anniversary with Photo Book & Flower Cart
Twenty-years ago, Judith Milgrom founded her boho-chic inspired label Maje in Paris. The French-Moroccan fashion designer is known for her affordably priced pieces that are worn by women in 40 countries worldwide. In addition in the upcoming months, Maje will open its largest-ever European store in London. (Formal announcement will be coming soon).
To celebrate the label’s 20th anniversary, Milgrom commissioned three photographers to collaborate with her on a limited-edition coffee-table book with three themes called ‘Maje 20.’ Mark Peckmezian shot ‘family life’ in Paris, Thurstan Redding portrayed ‘friendship’ under the Ouzoud Waterfalls in Morocco, and Coco Capitán teamed up with painter Frances Wilks to experience ‘love’ in England.
In Canada, Maje has created a 20th anniversary flower cart to celebrate the label’s anniversary and the launch of the SS 2018 Collection.
Fans of the brand can do celebratory selfie’s on April 14th at the downtown Hudson’s Bay in Vancouver; on April 21st at Queen Street Hudson’s Bay, and on the 28th of April at Maje Yorkdale.
Until the fall of 2016, Canadians could only buy Maje collections in a handful of concessions at Hudson’s Bay but in 2018 the company has expanded into 8 locations plus an outlet at McArthurGlen.
The Amazing Brentwood Completes Final Pour for Tower ONE
A landmark celebration was held last Friday at 614-feet to celebrate the final concrete pour for The Amazing Brentwood’s Tower ONE, the first of 11 towers to go up in the 28-acre project. Standing 63 levels with 591 units, this is the future home of the greatest number of suites in any one building in Metro Vancouver. With ten more towers, more than 250 shops and restaurants, a one-acre plaza, and zoning for possible 1.1 million-square-feet of office space, this is the first of many milestones for The Amazing Brentwood.
Since 1991, Brentwood Town Centre has been part of Burnaby when it was a partial open-air strip centre and enclosed mall. In the 1980s, a second level was added to the mall. In November 2014, a redevelopment announcement was made that shocked not only the community but the Lower Mainland. Over the following 4 years, the development would see the 500,000-square-foot enclosed centre transform into a mixed-use super-regional shopping centre. The Amazing Brentwood will be one of B.C.’s largest shopping centres when completed and will provide sorely needed residential housing to the city.
Tower ONE includes 300 rental homes and 291 market condos which sold in record time in 2014. Since then, two more towers have pre-sold for a total of 1,380 homes with the next highly anticipated release coming next year. In 2019, the first residents will move into Tower ONE.
Birks Jewellers to Exit Downtown Edmonton After Almost 90 Years
It’s the end of the road for iconic Montreal-based jewellery chain Birks‘s store in downtown Edmonton’s Manulife Place. Signs in the Manulife Centre store indicate that it will be closing soon, marking the end of several decades of continuous operations for the brand.
Prior to having moved into Manulife Centre more than a decade ago, Birks operated a much larger street-level store location near a former Woodward’s flagship in ‘Edmonton Centre’, which is now the eastern portion of Edmonton City Centre. Most modern Birks stores are considerably smaller than flagships of the past, though Birks continues to operate large stores in Montreal, Toronto (relocating) and Vancouver.
Birks opened its first Edmonton store in 1929 in ‘the Birks building‘ at the corner of Jasper Avenue and 104 Street. The elegant building still stands and is heritage designated.
Birks is the second tenant to be leaving downtown Edmonton’s Manulife Place. Last week we reported that Escada has closed its Edmonton store on the ground level next to Holt Renfrew. Downtown Edmonton is in a state of transition but good things are on the way with renovations to Edmonton City Centre, as well as ongoing construction at the ICE District.
Thank you again, Christopher Lui, for being the source of news at Manulife Place.
