Holt Renfrew’s CF Pacific Centre Vancouver flagship continues to see renovations, including the addition of a new concourse-level beauty hall that opened to the public last week. The new space is impressive, to say the least.
The former beauty hall was in a sun-filled space on the store’s ground floor, facing towards the busy corner of Granville Street and Dunsmuir Street. The new beauty hall has been moved downstairs into space formerly occupied by menswear — the men’s department has moved, now featuring its own Howe Street entrance.
While the new beauty floor lacks external windows, it has grown in size to about 16,000 square feet. The department can be accessed from the store’s dramatic oval atrium which connects the store’s three floors. The beauty hall features 29 distinct brand counters, as well as nine private cabines that provide facial and skincare treatments by appointment.
Natural light infiltrates the new beauty hall from the central atrium skylight and as well, Schwinghammer Lighting amplified the space with its lighting design solutions. The department’s floors are a composite pattern of two European marbles: “Blue de Savoie” and “Ice Marble”, and wall treatments are of Travertine Marble in “Escarpment Light”. The effect is almost surreal.
The new beauty floor was designed by New York City-based Janson Goldstein, which is overseeing the renovation and expansion of the Vancouver Holt Renfrew store. The store annexed about 40,000 square feet of retail space and now measures close to 190,000 square feet, and the store’s overhaul will continue into 2018. Janson Goldstein designed the original flagship that opened in 2007, and is overseeing the latest expansion. The 2007 store replaced a much smaller unit in the mall that opened in 1975.
Premium brands in the store include staples such as Giorgio Armani and Chanel, and new brands such as Darphin, ReVive, and Korean skincare brand Sulwhasoo have been added. Canada’s first Christian Louboutin beauty boutique joins shop-in-stores for brands such as Jo Malone (including a “tasting bar”) and a La Mer boutique carrying some products priced into the four figures. An adjacent fragrance section carries many of the world’s leading brands.
Cosmetic floors in department stores often do high volume sales and as a result, are considered to be destinations. As such, some stores are finding that they can place cosmetic departments into real estate that might be considered ‘less desirable’, such as on the lower level of a store. Bergdorf Goodman in New York City pioneered the idea in 1999 when it sank its cosmetics department into its basement — Barneys New York followed, as have a number of downtown luxury department store flagships globally. And sources say that CF Pacific Centre might not be the last Holt Renfrew store to see a basement-level cosmetics department, as the company initiates more store expansions and renovations this fall.
See below for more photos by our Vancouver correspondent, Ritchie Po.
Millennials make up over 37 percent of the Canadian labour force. By the year 2020, they are expected to make up 50 percent of the global workforce. However, experts estimate that the vast majority – 61 percent, to be exact – expect to leave their jobs in the next 4 years.
Why?
SHIFTING PRIORITIES…
The fact of the matter is; the majority of Millennials keep a day-time job while pursuing their entrepreneurial dreams, with 50 percent of them planning to start their own business over the next 10 years. As a result, they’ve completely changed the face of business – more specifically, retail – from the inside out.
Dubbed the next generation of industry disrupters and game changers, Millennial business owners are making a real world impact by using their “side hustles” to shift traditional retail to fit their priorities and values – ones that are almost diametrically opposed to their predecessors.
…LEAD TO SHIFTING BUSINESS MODELS
This concept of holding down the proverbial fort and keeping a 9-5 while pursuing passion projects or business ventures on the side is the framework for what we’ve come to know as the share economy.
The sharing economy (also known as the peer economy) allows consumers to access products or services through online marketplaces. For the business owner, not only does the rent or purchase of their product or service through this avenue provide a wider audience but also a steady flow of income on the side. Companies like Airbnb and Uber have disrupted commerce by democratizing it where previously major corporate behemoths had entire control.
One thing to remember is that what often differentiates one generation from the other are the environmental factors that have shaped their lives. For their part, Millennials have been the most impacted by a lack of secure jobs in recent times. In fact, 21 percent of small business owners in Canada said they started their business after losing their jobs – all the more reason for the emergence of business models like the share economy and its successor, the gig economy, where industry-specific entrepreneurs can sign up for tasks or “gigs” best suited to their skillset and availability often at a time when they are unable to get steady work anywhere else.
Additionally, where old world retailers offer the promise of impeccable quality goods – for a price – that will last you a lifetime, Millennials, who often have less capital, have grown to value access over ownership. As a result, businesses are putting more of a focus on providing access to a wide variety of high quality goods for the right amount of time and/or for an affordable price – whether that comes in the form of a designer apparel renting service or a luxury beauty subscription box.
HOW “ME” HELPS “US”
Millennials are often called the “me” generation – a trait that is often frowned upon in the workplace – but how does it fare for their own businesses?
While Generation Zers are lauded as “digital natives”, Millennials are known as digital pioneers. It’s no secret that technology has had a dramatic impact on our world over the past few decades, and Millennials have taken that and used it to their and their consumers benefit.
Nowadays, almost any product can be customized. If not fitted to a consumer’s exacting standards, it can at least be personalized to them.
In addition to changing the face of retail, some experts believe Millennials are changing the face of Canadian economy as a whole. In 2014, Deputy Chief Economist at CIBC, Benjamin Tal, estimated that as many as 150,000 new startups could be launched in Canada within the next decade, increasing our gross domestic product while, hopefully, reducing the youth unemployment rate which has averaged 14.11 percent from 1976 until now.
About the author, Dayana Cadet:
As Hubba’s Millennial Retail Expert, helping brands connect to the world’s largest consumer demographic is where Dayana thrives. With 5+ years’ experience working in many different aspects of luxury retail, Dayana has seen first hand how her generation has evolved into the mobile-first, omnichannel consumers they are today. Being one such consumer, she has an especially keen eye on emerging retail trends as well as what approaches are most effective when speaking to Millennials. Her work can be found on Hubba.com and trade publications such as Chain Store Age, Retail Minded and My Total Retail.
Montreal-based ‘plant-based power-food’ quick-service restaurant concept Copper Branch is launching a significant expansion in Canada that will see at least 20 locations open next year. Copper Branch has partnered with brokerage Think Retail for the initiative.
Founded in Montreal in 2014, Copper Branch aims to be “the undisputed leader in healthy fast-casual foods”. Entrepreneur Rio Infantino founded Copper Branch after owning several fast-food franchises over a period of about 25 years. The company said that its menu is designed to ‘Empower, Energize and make people feel their Best.” While its dishes are vegetarian, Copper Branch is targeting a wider audience, particularly those seeking clean, healthy meal options. It currently operates 12 locations in Quebec and Ontario.
For those wondering about the name, ‘Copper’ reflects the metal often used in gourmet cookware, while ‘Branch’ references nature. The company’s ‘3 Values’ include ‘chef-inspired flavours, power foods that nourish, and environment/responsibility.
Copper Branch Commerce Court Toronto
Last week, Copper Branch opened its first location in Toronto. The 675 square foot vegan eatery opened in the newly renovated food court at Commerce Court, in the heart of Canada’s Financial District. Copper Branch recently opened a 1,500 square foot location at Carre Lucerne in Mont-Royal, Quebec, and new locations are also confirmed to be opening later this year on Sherbrooke Street West in Montreal’s Westmount Village, at Laurier Quebec in Quebec City, and in downtown Waterloo, Ontario. In early 2018, the concept will open in downtown Markham, and more will be announced shortly.
According to partner brokerage Think Retail, Copper Branch will continue to expand in the Greater Montreal and Toronto areas, and is also looking to secure first locations in Ottawa, Calgary, Edmonton and Vancouver. Spaces will ideally be between 500 square feet and 2,300 square feet, along high streets and in malls (both enclosed and open-air). Tony Flanz is the contact at Think Retail for Copper Branch.
*Photos in this article are of the new Commerce Court location in Toronto.
Canada continues to enjoy a record number of international visitors. China is one country that has experienced the most growth in the past five years. This article focuses on how Canadian airports with service to China perform in addressing retail needs of Chinese tourists and where opportunities may be available to attract more spending and improve non-aeronautical revenue.
Tourism and Growth
International tourism to Canada has been experiencing tremendous growth owing to the weakness of the Canadian Dollar against most major world currencies. Statistics Canada just-released arrival data for May 2017 showing that it was the best recorded May ever with 1,715,791 visitors into the country. While visitor numbers from the United States dipped 0.3% in May 2017, the bright spot continued to be China at 53,302 visitors (up 11%).
Over the past five years, visitors to Canada from China jumped from 315,512 to 651,860. This firmly placed the Asian country in second place out of the top 15 most visited (excluding United States) list behind United Kingdom at 869,574 visitors.
In percentage form, China showed the best growth in the top 15 at 106.60% over the past five years with Mexico being the only other country with more than 100% growth during this time period.
The high growth contributed to demands for additional flights from Canada to China. As of July 2017, there are 8 airlines operating up to 20 flights daily between the two countries. Being geographically closer to China, Vancouver International Airport has the most routes/frequencies and is followed by Toronto Pearson International Airport, Montreal Pierre Trudeau International Airport and Calgary International Airport. Air Canada continues to be the dominant player controlling over 40% of all available seats in the market.
Spending
International travellers have more of a propensity to spend money while on trips. In 2015, Statistics Canada and Tourism & the Centre for Education Statistics compiled data which showed that, while there were more United Kingdom visitors overall, they were outspent by visitors from China by CDN$21 million totalling CDN$993 million.
Chinese shoppers are keenly aware of the latest foreign brand trends and shop aboard to take advantage of prices that can be up to 40% lower due to the lack of import tariffs and consumption tax from home.
Branding
To determine where the retail opportunities lie for Canadian airports, we must first look at the most popular luxury brands in China and specific brands relevant for Gen-Y and Gen-Z.
Luxury:
Agility Research noted that China made up 20% of the global luxury market and listed the following ten brands as the most popular:
Chanel
Dior
Hermès
Louis Vuitton
Burberry
Versace
Armani
Prada
Gucci
Montblanc
Gen-Y and Gen-Z:
When it comes to Gen-Y (the millennials born 80s to mid-90s) and Gen-Z (born mid-90s to 2000s), RTG Consulting Group based in Shanghai, China published the 2016 RTG Brand Relevance Report highlighting the more important brands for these groups in other different categories.
From this report, we focused our attention on fashion, electronics and food & beverages and noted that many North American and European brands made the list:
– For fashion, both Gen-Y and Gen-Z preferred Adidas, Zara, Nike and Uniqlo and differed on H&M (Gen-Y) and Converse (Gen-Z);
– For electronics, Apple, Samsung, Huawei and Mi made the list for both groups while Gen-Y related more to Microsoft over Gen-Z preference for Le Group and finally:
– KFC, Starbucks, McDonalds and Tsingtao beer made the food and beverages list for both groups. In addition, Gen-Y chose Coca-Cola over Gen-Z’s Pepsi.
All this information is important as we reviewed how the brands mentioned above have been procured as standalone shops at the four Canadian airports with service to China*.
* note that Coca-Cola and Pepsi products are available at fast food outlets or convenience stores and would not be listed separately in the above table. Retailer Insider performed a search for Tsingtao beer with each airport’s website and did not note it listed in the food & beverages section.
In our analysis, all four airports have multiple Starbucks spread out in different terminals. In addition, both Vancouver and Toronto airports have standalone retail presences for Gucci and Burberry while Vancouver has Hermes and Toronto has Montblanc. However, all four airports did not perform well overall in procuring the brands that Chinese tourists associate with the most which could affect sales.
Our review indicated that there are many retail opportunities available for airport operators to determine the viability of attracting these brands into the premises. Their inclusion can lead to positive engagement for Chinese tourists which will contribute to an improvement to non-aeronautical revenue.
About the Author:
Larry Leung is a research and strategy director based in Toronto. He focuses on technology, experience creation, marketing and loyalty in the aviation and retail industries. Larry contributes blog posts for aviation consulting company Experience The Skies (www.experiencetheskies.com) and writes for Urban Toronto. Follow him on Twitter at @larrykleung. You can also email him at: lleung@experiencetheskies.com.
Independent retailers are being recognized during the month of July both in Canada, as well as internationally. The movement began in the United States more than a decade ago, and it has expanded internationally in an effort to embrace the success of independent retailers, both brick-and-mortar as well as online.
According to the official Independent Retailer Month website, for every dollar spent at an independent retailer, between $5 and $14 is created in value to the local community. The site describes how shopping local supports local owners, their suppliers, and those they depend on for running their businesses. Supporting the local economy builds confidence in the community while enabling local businesses to prosper and grow, while the site claims that for every dollar spent at a national chain store, about 80% of the money “leaves town immediately”.
In Canada, a number of organizations are supporting local retailers in an effort to help communities prosper. Retail Council of Canada’s MySTORE division speaks to the unique needs of independent retailers, including its ShopIn initiative that provides independents with a variety of tools for success. Retail Council of Canada, which is considered to be ‘the voice of retail’ in Canada, is encouraging independent retailers to become members in a partnership that is committed to advancing, promoting and protecting the interests of independent retailers in Canada through federal, and provincial advocacy, valuable member benefits and services, training and development resources, and networking opportunities.
Toronto-based Digital Main Street has set out to help ‘main street’ businesses get online, by helping them adopt digital tools, technologies and services. Businesses can access free workshops and training on topics relevant to their learning needs at the ‘DMS Academy’. The ‘DMS Lab’ is a virtual retail tech incubator that helps build partnerships between startups and BIA’s to pilot new technologies with main street businesses. “Digital Main Street connects main street businesses to the most innovative digital providers,” says Darryl Julott, Program Manager at Digital Main Street. “Our team has selected trusted digital product and service providers for you to work with, who are offering the best deals exclusively when you sign-up.”
Also supporting independent retailers is cloud-based point-of-sale platform Lightspeed. Founder and CEO Dax Dasilva says that he thinks that independent retailers, both brick-and-mortar as well as online, are the future in Canada. “The time is now for independents,” said Mr. Dasilva, going on to describe the advantage to being an independent retailer. “Small and medium-size retailers are more nimble — they have the ability to set up shop almost overnight and can easily navigate a transition from a solo brick-and-mortar presence, to an ecommerce and omnichannel platform. Omnichannel POS solutions like Lightspeed democratize the access for multiple sales channels, and smart independents are often the first to adopt new technology quickly,” he said.
Lightspeed is supporting independent retailers with its powerful cloud-based POS solutions, powering more than 45,000 customers in 101 countries. In an effort to further get to know independents in order to better assist, Mr. Dasilva met with groups of retailers in Lightspeed’s major markets in North America, the Netherlands as well as in the UK, engaging in dialogues about the state of retail. A number of key learnings included:
Customers expect to be met wherever they are, and the service and relationships built between the retailer and the customer must be consistent on and offline – this is where omnichannel is paramount,
Social media and mobile technology must be embraced for businesses to keep up with the digital landscape – businesses often dedicated staff and hours to a budding social media presence alone, and
Independents are optimistic about the future, they look forward to change and they thrive on the prospects of adaptability
The roundtable also concluded something remarkable — that independent retailers are agile, being able to adapt at a much quicker pace than big box retailers, making an easier transition to an omnichannel presence from either just eCommerce or just bricks and mortar. Endeavours like Mr. Julott’s Digital Main Street will no doubt also prove useful to get local physical retailers online.
Lightspeed is hosting a free speaker series for six weeks throughout the summer, offering unique insights on the retail world from experts. It can conveniently be viewed online — after airing live on Lightspeed’s Facebook page, the webinars are posted on the web.
The first two speakers’ presentations are now available to view online. On July 18, the lecture ‘The modern retail experience’ was hosted by Lightspeed CMO Laith Murad and Etiket owner Simon Tooley. The lecture discusses how to compete in today’s changing retail environment, grow your brand, reach new customers and drive increased sales. On July 25, “Social media for independent businesses“, was hosted by Brenin Watts, Lightspeed social media specialist, discussing how to create a strategy for each platform in order to most effectively create an authentic connection with your audience.
The following is a description of the other speakers that will be involved between now and August 23:
August 1: “Building relationships with your customers”, Hosted by Alex Therrien, Key Accounts Manager of Lightspeed, and Rami Karam, Co-Founder & CEO of Thirdshelf. Description: Getting new customers is only half the battle. Learn how to build a deeper relationship with your shoppers so they come back again and again.
August 8: “Investing in your employees”, Hosted by Chelsea Finnimore, VP of HR of Lightspeed, and Carol Wood, People Operations Director of Homebase. Description: High staff turnover plagues the retail industry at all levels. Pick up some actionable advice on how you can keep your employees with you for longer — and why that might just be crucial to your success.
August 15: “Navigating technology”, Hosted by Dax Dasivla, Founder and CEO of Lightspeed himself. Description: Technology is changing the way that people shop. Learn about how new market technologies are bringing shopping experiences to the next level.
August 23: “Growing your business”, Hosted by JP Chauvet, President of Lightspeed. Description: How do you know whether you’re looking at the right indicators for success? Learn how setting the proper KPIs is a key component of your business growth.
Independent retailers are an important part of the Canadian economy, and in July of 2018, we’ll become even more involved in various independent retailer initiatives. Many terrific organizations including Retail Council of Canada, Digital Main Street, and Lightspeed, are there to support local retail, in an effort to compete against national and international behemoths that continue to co-exist in the marketplace.
Sears Canada has sold a number of its top properties over the past several years in order to help keep it afloat. Headlines were made in the spring of 2012 when Sears announced that it had sold three leases to landlord Cadillac Fairview for $170 million and as a result, Sears stores were closing at Calgary’s CF Chinook Centre, at Ottawa’s CF Rideau Centre, and at Vancouver’s CF Pacific Centre. It was eventually revealed that these would become home to Nordstrom’s first Canadian stores, with CF Toronto Eaton Centre’s Sears subsequently announced to become another Nordstrom flagship, while Sears’ CF Sherway Gardens store was acquired and subdivided for the 2016 opening of Saks Fifth Avenue and Sport Chek. A number of other Sears stores have since been closed.
(SEARS AT EDMONTON’S SOUTHGATE CENTRE: AN OPPORTUNITY TO EXPAND THE MALL WITH A MALL ENTRANCE INTO SAFEWAY, ADDING MULTIPLE CRU’S AS WELL AS POSSIBLY A NEW ANCHOR SUCH AS HOLT RENFREW OR NORDSTROM)
Despite having sold off some of its most valuable real estate, including several former downtown Eaton’s flagships, Sears Canada continues to hold a number of valuable properties (both leased and owned) that could be repurposed, if the Sears Canada chain shutters completely.
A number of Sears properties are located in some of Canada’s most productive malls in terms of sales per square foot, as analyzed in Retail Council of Canada’s Shopping Centre Study. An update to that study will be released this fall, using the first study as a benchmark.
The following is a discussion of some of Sears Canada’s most valuable retail spaces that continue to be operated as Sears stores, including some possibilities to repurpose these spaces.
British Columbia
While the 637,000 square foot downtown Vancouver Sears store at CF Pacific Centre has been repurposed for a 230,000 square foot Nordstrom flagship with offices above and retail in the concourse below, a number of valuable Sears properties remain in British Columbia. In the summer of 2013, Sears Canada’s 217,000 square foot Metropolis at Metrotown location was announced to be redeveloped at a cost of over $1 billion, which would include a newly-built Sears store as well as a number of residential towers. Nothing has taken place as of yet, though there is tremendous opportunity to capitalize on the existing 8.9 acre site.
A number of Lower Mainland malls have Sears stores. Surrey’s Guildford Town Centre, with sales approaching $900 per square foot annually, includes a 141,300 square foot Sears store as an anchor. Coquitlam Centre, which is another successful mall east of Vancouver, currently has a 151,500 square foot Sears as one of its two major anchors. Willowbrook Mall in Langley also has a 113,400 square foot Sears store, which could be redeveloped in a way to best serve the burgeoning population in the area.
Alberta
Alberta is home to a number of valuable Sears leases. The 170,000 square foot Calgary CF Chinook Centre Sears became Canada’s first Nordstrom store in September of 2014, though nearby Southcentre, one of Calgary’s leading malls, continues to operate a 234,100 square foot Sears store on the property. Rumour had it that the mall’s Sears store would be redeveloped for multiple tenants including La Maison Simons, though nothing has officially been announced at this time.
Edmonton is home to three rather significant Sears locations. The massive 263,000 square foot Southgate Centre location possibly offers the most redevelopment potential, with a multi-level Sears store that could be subdivided into valuable multiple CRU space, as well as for a smaller anchor. West Edmonton Mall is currently home to a 149,000 square foot Sears store, near DSW Shoes in the mall’s original Phase I. Edmonton’s Kingsway Mall also houses a 241,900 square foot Sears store — landlord Oxford Properties will open Marshalls and Homesense in the former Target space this fall, and will no doubt have ideas for the Sears space if the retailer shutters as anticipated.
It should be noted that Edmonton is the only English-speaking metropolitan region in the country with a population in excess of 1 million that lacks a Nordstrom store. Edmonton is also home to a woefully small downtown Holt Renfrew store and if Holt’s decides to remain in the market, it might consider a larger store in a suburban mall.
Saskatchewan
Saskatchewan’s two largest cities, Saskatoon and Regina, are both home to large downtown Sears stores. The Saskatoon Sears store at Midtown Plaza is about 116,600 square feet, occupying a prominent position at the opposite end of the mall from co-anchor Hudson’s Bay. Regina’s Cornwall Centre Sears measures 123,000 square feet over two levels, at the north end of the mall beside the Saskatchewan Drive entrance. Both locations were rumoured for La Maison Simons locations, though Simons’ Canadian expansion has slowed from years past.
Manitoba
A number of suburban malls in the Winnipeg area have Sears stores. There’s one that stands out in particular, however, given its size and location. The 263,000 square foot Sears at CF Polo Park occupies a prominent anchor position in the mall, and the mall itself is considered to be one of Canada’s most productive, with sales per square foot in excess of $900 annually. It’s unclear what redevelopment could take place for this space however — despite the mall’s exceptional location and productivity, the Winnipeg market hasn’t been identified by Nordstrom or Saks Fifth Avenue as a market to open any stores, at least not as far as we’re aware.
Ontario
Ontario is home to a number of prominent Sears locations that could be redeveloped, if feasible. Several Toronto-area Sears stores have already been divested and repurposed — the massive 800,000+ square foot CF Toronto Eaton Centre Sears flagship, which once housed Eaton’s flagship, is now home to a 220,000 square foot Nordstrom, as well as other retail and offices. As mentioned above, CF Sherway Garden’s Sears is now home to Saks Fifth Avenue and Sport Chek, and Yorkdale Shopping Centre’s Sears is being redeveloped with multiple retailers including Restoration Hardware and Sporting Life. In Mississauga, Square One’s Sears is now home to a beautiful La Maison Simons, as well as a Sport Chek flagship.
A number of notable Sears Canada locations in the region remain, with exceptional redevelopment potential. CF Fairview Mall is home to a 149,550 square foot Sears, which some have speculated would become a Saks Fifth Avenue store as part of a mall repositioning. Though it might not happen, the mall is one of Canada’s most productive with sales per square foot exceeding $900 annually, and it’s located on major transportation routes near some affluent residential areas.
Scarborough Town Centre, which is one of Oxford Properties’ most productive centres, houses a 231,600 square foot Sears location. A couple of years ago, rumours were circulating that La Maison Simons would take part of the space, though a deal hasn’t been done as far as we’re aware. In the Greater Toronto Area, there are a number of other highly productive major malls that include Sears stores as anchors, including Oshawa Centre in Oshawa (Sears = 132,200 square feet), Mapleview Centre in Burlington (Sears = 125,700 square feet), Upper Canada Mall in Newmarket (Sears = 121,900 square feet), Promenade Thornhill (Sears = 173,560 square feet), Pickering Town Centre (Sears = 164,350 square feet), Bramalea City Centre (Sears = 157,150 square feet), Erin Mills Town Centre (Sears = 132,200 square feet), and there are others.
It’s worthy to note that adding full-sized restaurants to malls is a trend that we’re seeing (article to follow), as is adding entertainment centres to malls. The Rec Room is being added to centres such as Square One in Mississauga and at West Edmonton Mall, while Cineplex is adding VIP cinemas to some of its centres. Mexico-based children’s entertainment centre concept KidZania, as well, has indicated on its website that a Toronto location is “coming soon”, indicating a Canadian expansion that could potentially utilize empty retail space vacated by Target, as well as possibly Sears.
A number of other Ontario communities are also home to Sears stores, and one mall stands out — CF Limeridge in Hamilton, which ranked highly in Retail Council of Canada’s Shopping Centre Study. CF Limeridge’s Sears is about 143,640 square feet, according to leasing documents.
The Ottawa area is home to a number of Sears stores, including a 149,000 square foot store at the St. Laurent Centre. One concerning property is Carlingwood Mall, however — its only anchor exceeding 50,000 square feet is Sears, which has 179,300 square feet at the centre.
Quebec
Sears has a number of stores in some prominent Quebec Malls. All of these are suburban — CF Carrefour Laval near Montreal is the most productive large suburban mall in the province, housing a 150,850 square foot Sears location. If Sears were to exit the mall, a number of new tenants could replace it — even Saks Fifth Avenue, which sources say could also be considering a suburban Montreal location.
A number of other productive Cadillac Fairview Malls in the Montreal area house Sears locations, including CF Fairview Pointe Claire (Sears = 181,800 square feet), CF Galeries d’Anjou (Sears = 146,570 square feet), CF Promenades St-Bruno (Sears = 134,255 square feet), and others. CF Galeries d’Anjou is about to open Montreal’s first Saks OFF 5TH in part of the mall’s retail space that was once occupied by Target.
Quebec City is also home to a number of Sears stores in some important malls, including at the massive Les Galeries de la Capitale (Sears = 185,000 square feet), Laurier Quebec (Sears = 157,350 square feet) and Place Fleur de Lys (Sears = 187,000 square feet).
Maritime Provinces
Sears Canada is a staple retailer for many important malls in the Canadian Maritimes, and Sears’ possible demise would be devastating for some of these centres, not to mention the communities that they serve. Halifax Shopping Centre, in Halifax, houses a 106,400 square foot Sears store in a mall that sees in excess of $800 per square foot annually in sales (a reader recently told us that they saw ‘La Maison Simons’ on a future mall plan, though nothing is confirmed).
CF Champlain Mall in Dieppe, NB, is a top regional mall with a 107,000 square foot Sears. Regent Mall in Fredricton, NB, houses an 83,900 square foot Sears, as well as a Walmart. In Saint John NB, McAllister Mall’s only large anchor is a Sears store, which is concerning if it closes. And in St. John’s Newfoundland, the highly productive Avalon Mall is home to a 129,000 square foot Sears anchor, alongside Winners and a Cineplex theatre.
Conclusion
While the possible demise of Sears Canada is concerning (including substantial job losses), there is opportunity to repurpose some of Sears Canada’s existing real estate if the company shutters its brick-and-mortar operations. Opportunities to add more food and beverage options to malls, as well as entertainment concepts such as theatres and amusement parks, could help fill space, not to mention help drive traffic to some centres that are seeing declining footfall. Trends in Canadian shopping centres will be discussed extensively on Retail Insider in the coming months and as mentioned above, Retail Council of Canada will be releasing another shopping centre study this fall. There are sponsorship opportunities available and for more information, please feel free to contact Craig Patterson at cpatterson@retailcouncil.org.
The wildly popular cycle studio concept SoulCycle recently opened their first-ever Vancouver location, in the city’s upscale downtown Yaletown neighbourhood. The new studio marks their first on the Canadian west coast and third in Canada, following locations on King Street West and in Yorkville Village, both in Toronto.
Founded in 2006, SoulCycle started life as a small spinning class on New York’s Upper West Side. The studio has become a global chain with over 80 locations in the United States and Canada.
Following its first public offering in 2015, the brand reported a whopping $112 million in revenue. The brand confirms that over 16,000 people take their classes across all studio locations on a daily basis. SoulCycle is famed for its intensive indoor cycling classes, which combine cycling with choreographic arm movements and hand weights in the same workout. More than a lower-body workout, the brand provides a total body workout combining cardiovascular endurance with resistance training.
SoulCycle Yaletown (PHOTO: BRITNEY GILL)
SoulCycle Yaletown
(PHOTO: JENNA MARIE WAKANI)
Choreography, weight training and speed are timed to an end-to-end mix of music specially chosen by each instructor. Instructors set the mood for each class, choosing and mixing contemporary R&B and dance music with “old skool” hip-hop and soul classics to create an enveloping, total immersion 45-minute workout. (The brand even had a Taylor Swift themed ride class in 2015.) The experience is akin to a fitness class being held in a nightclub, where anytime is Friday midnight. Instructors are supportive, espousing affirmations to inspire riders to reach maximal performance (the writer confirmed the results the morning after his first ride and has never felt better). SoulCycle has a devoted celebrity clientele list, including Oprah, David Beckham, Selena Gomez, Demi Lovato, Jessica Alba, and Lady Gaga, who is said to have taken two of SoulCycle’s signature bicycles with her on her last tour for on-the-road workouts.
The brand, co-founded by Elizabeth Cutler, Julie Rice, and Ruth Zukerman, was acquired by Equinox Fitness but operates independently. With a leadership team which is 86% female, SoulCycle values equity and community highly. All managers and instructors help incoming and outgoing traffic from their studios in hands-on operations, and employees are given paid time off to perform charity and humanitarian work. It is no secret that the company boasts one of the highest employee retention rates in the fitness industry.
The Vancouver location, known as SoulCycle YLTN, is located at 1128 Mainland Street. Measuring 3,518 square feet, the location is housed in the former West Coast Hot Yoga space. The studio is ideally situated amidst some of the city’s most celebrated restaurants, boutiques, coffee bars and luxury apartment complexes. The studio accommodates up to 57 riders per class, and its shop features the brand’s namesake performance and athleisure clothing collections. Facilities include free lockers and showers, and all restrooms are stocked with Saje Natural Wellness products in a limited-time partnership. As with the Toronto King Street location, SoulCycle’s regular beauty products will replace Saje products once the opening is complete. The front-of-studio boutique includes Vancouver-specific SoulCycle YLTN tank tops, cropped tights and tees, as well as the signature grapefruit-scented Jonathan Adler candles that are lit in all classes.
SOULCYCLE YORKVILLE VILLAGE. PHOTO: JENNA MARIE WAKANI)
SOULCYCLE YORKVILLE VILLAGE. PHOTO: JENNA MARIE WAKANI)
SOULCYCLE YORKVILLE VILLAGE. PHOTO: JENNA MARIE WAKANI)
Classes run seven days a week, with the earliest ride starting at 6 a.m. (8:30 a.m. on weekends) and the last evening class at 7:30 p.m. twice a week. The price of the first ride is $20, with a $30 drop-in fee thereafter. Memberships include the premiere “Supersoul 20” 20-class pass priced at $1,000 or the 30-class pass at $780 (both of which expire within one year).
SoulCycle, with its prime location in one of the premiere addresses of arguably one of the world’s fittest cities, should find a large, devoted following in Vancouver for many years to come. Additional locations are currently in development and shall be announced in the near future.
Let’s Talk! Email Me @: Contact_Me@raange.com; Text Me @: (514) 613-3324 with Keyword ‘BOOST’
Sometimes I wonder if retailers truly care about sales.
I see resources and creative energy focused on testing and optimizing online channels with personalized experiences, digital loyalty programs, and predictive algorithms.
Meanwhile, brick-and-mortar suffers from the effects of marketing malaise. Meetings act out like scenes in Groundhog Day, as the same ideas become recycled meeting after meeting after meeting, until you want to scream.
It is painfully obvious. Retailers are using in-store campaigns from the 80s: scratch and win, flash sales, the list goes on and on.
No wonder the Canadian retail sector is five years behind and losing to our counterparts in the U.S. We preach innovation, but are terrible at executing it across all channels – online AND offline.
Here’s a statistic for you:
A recent U.S. Census Bureau report found that US E-commerce sales accounted for 8.5% of total Retail sales in Q1 2017. More than 90% of people still conduct their retail shopping in-store!
Of course, online is a huge channel with projected annualized growth rates of 14.5% year over year.
The future of retail will be a convergence of channels both online and offline. I’ve seen retailers try to bridge this gap, but retailers have a tendency to follow the hype like (expensive) iPad stations, social media walls, and an app for everything. It may look great, but what’s your ROI?
Sales should be #1. Everyone in the company is measured against it, so why aren’t your marketing and technology service providers?
Demand a sales BOOST from your vendors.
At my company, Raange, we look at in-store traffic similarly to your online traffic. You have thousands of people that walk in or past your storefront everyday; focus on creating a frictionless process to better convert this traffic and optimize this sales channel – incentivize the sale.
We found that creating mobile access points coordinated with instant incentives can create awesome results! – Our clients have seen double-digit sales increases.
Listening to all the new hype is fine, but hype is only words without proof. As my grandfather would say, “talk is cheap; money buys the beer!”
Eric Nykamp is CEO of Raange, Inc., Founder at Mamoth-Group, TAARGA, RAANGE and Mamoth-Labs! Internet Strategist, Entrepreneur, Inventor, Investor, Husband, Father, Insomniac.
My goal is to elevate traditional brick & mortar retailers to quickly and easily transition to the latest marketing concepts and communication channels, so as to rebuild trusted dialogue with past, present, and future customers.
As the Canadian economy continues to pick up steam while the dollar remains low against the US greenback and other global currencies, Toronto has become an attractive destination for both locals and international visitors searching for luxury goods at reasonable prices. Revenue mix is one of three reasons why Toronto Pearson International Airport (“Toronto Pearson”) should invest in adding more luxury retailers as part of its plans to achieve a higher non-aeronautical revenue mix. The other two reasons focus on the retail mix and the use of technology as a marketing tool.
Overview
Canada’s busiest airport carried a record high 44.3 million+ passengers in 2016 which propelled it into the world’s top 35 most travelled list. International (including United States) traffic grew by 8.8% to 27.4 million (61.8% share overall) which outpaced domestic growth of 6.9% (38.2% share) (2016 GTAA Annual Report).
While Toronto Pearson continues its multi-year renovation of Terminals 1 and 3 with new retail options, there are no plans announced specifically in the luxury price category. It has been over three years since the airport opened its cluster of luxury retailers at the international concourse of Terminal 1 near Gate E75 and E76. The retailers operated by the Nuance Group include:
Burberry
Coach
Longchamp
Victoria’s Secret
Swarovski
Salvatore Ferragamo
Bvlgari
Montblanc
Gucci
Omega
Longines
Tissot
Rado
Tumi
This collection of stores complement the Burberry and Bvlgari stores located in Terminal 3’s international concourse near Gate C30.
Additionally, Michael Kors, Polo Ralph Lauren, and Salvatore Ferragamo are located near Gate C36. They are listed in the airport’s website store listing but not its directory map (shown above) or the mobile application.
Revenue Mix
The airport earned CDN$1,285.6 billion in revenue in 2016. While retail components (including restaurants and beverage establishments), forming part of the non-aeronautical revenue, increased by CDN$7.3 million to CDN$91.7 million, they only represented roughly 7% of all revenue generated for the year. This performance is significantly less than that of the top three most travelled airports in the world including Hartsfield Jackson Atlanta Airport (ATL), U.S. (2016: ~15%), Beijing, China (2016: ~30%), and Dubai, U.A.E. (2015: ~52%).
Without breaking down the numbers further, Greater Toronto Airport Authority (GTAA) would like to have its overall non-aeronautical revenue as a percentage of overall revenue to increase from the current 30% to 50%. This lofty goal may be hard to achieve without a higher priced product mix that luxury retailers can bring as indicated by sales per enplaned passenger of CDN$19.77 in 2016 (up 2.2% from 2015).
Retail Mix
While Toronto Pearson included some luxury retailers at both terminals’ international concourses, the airport has not provided as many options for its domestic and U.S. bound travellers. Those that are not travelling internationally unfortunately do not have access to any high end retailers due to government and security regulations.
Additionally, the airport terminals are not designed to showcase shopping within a centralized departure hall after security. This may limit the number of passengers who choose to wait at their assigned gate areas instead of venturing somewhere else to shop. While Terminal 1 is considered the better furnished wing when it comes to luxury goods, it does not have some of the more popular luxury brands such as Harry Rosen, Holt Renfrew, Giorgio Armani, Empirio Armani, D&G, and Hèrmes as tenants.
Adding high end retailers may seem like a simple solution to improve reach, exposure and higher spending per passenger, but Toronto Pearson will also need to strategize on how to manage luxury shoppers who often expect more personalization.
The airport could take a page from London’s Heathrow Airport where it has introduced a dedicated shopping service in 2016 at its Terminal 2, The Queen’s Terminal facilities. Once registered, passengers have access to services such as trained personal shoppers, expedited transfer and check in, home delivery and collect at return options. This unique service and other retail initiatives played the lead role in that airport’s financial growth with non-aeronautical revenue up 8.8% in Q1 2017.
Duty Free at Toronto Pearson Airport
Technology
Today’s shoppers are influenced by social media like Instagram and YouTube. Luxury retailers have been effective in drawing shopper’s attention through flashy campaigns made possible in a big space like an airport terminal with high ceiling height and showcased on social media. Burberry, for example, introduced the world’s first Burberry Balloon as an exhibit at an airport to highlight its DK88 collection. This limited time installation has been an internet sensation for the brand (e.g. a simple Google search resulted in ~475,000 results) and also provides free promotion for the airport as an art and experience destination. This effect has been magnified with the airport cross-promoting the installation through its social media and print channels concurrently.
When Toronto Pearson decides to add more luxury retailers, it would be important to showcase them as a collection or individually. Retailer Insider checked the airport’s Twitter, Instagram, Facebook and website and noted that there has been minimal coverage of the luxury retailers or the airport as a luxury shopping destination. In addition, not all luxury brands listed the airport as an official store location in its website or through Google search. This makes for a more challenging shopper discovery process.
Toronto is the Canadian financial capital featuring some of the biggest shopping malls in North America. Handling more than 44 million passengers a year allows Toronto Pearson the opportunities to offer a more diverse retail product mix. The luxury segment makes up only a small percentage of the total number of retail outlets currently occupied within the airport and is a prime target for growth.
The goal to improve non-aeronautical revenue as a percentage of the overall revenue can be achieved through introducing more luxury retailers for all airport users including shoppers, employees and travellers, building the airport’s reputation as a shopping destination through brand acquisition and improved services and using technology as a marketing tool to capture shoppers’ imagination that influential luxury retailers can bring.
Danish lingerie and fashion brand Change (formerly ‘Change of Scandinavia’) is planning a substantial Canadian store expansion over the next several years. The retailer has announced that it plans to open 25 more Canadian stores, and it’s working with brokerage Think Retail on the endeavour.
On Thursday of last week, Change opened a 550 square foot location at CF Carrefour Laval, north of Montreal. Change took part of the retail space formerly occupied by accessory retailer Bentley, and Spanish accessory retailer Uno de 50 will soon occupy the remainder. CF Carrefour Laval is the most productive major shopping centre in the province of Quebec, according to Retail Council of Canada’s Shopping Centre Study.
Change’s next locations will include a 650 square foot location at CF Richmond Centre near Vancouver, as well as a 750 square foot unit at Oshawa Centre, east of Toronto. These are part of a considerably larger expansion for Change Lingerie that will extend into 2018 and 2019 — the retailer plans to open at least 25 more Canadian locations, and it’s working with Tony Flanz of Think Retail to secure more locations. Ideally, retail spaces will be in the 500 to 850 square foot range, and target markets include Greater Toronto Area, Vancouver, Ottawa, Quebec City and Montreal.
Change launched its Canadian retail operations in 2006 and it now boasts 16 locations with five in British Columbia (Vancouver x 2, Burnaby, Coquitlam and West Vancouver), one in Saskatchewan (Saskatoon), five in Ontario (Toronto x 2, Thornhill, Oakville, Burlington), and five in Quebec (Montreal x 4 and in Saint-Jean-sur-Richelieu).
Change Lingerie’s value proposition is why it’s growing, and why there’s such a considerable demand — its bra sizes are larger than most retailers, so it caters to a different niche than other lingerie retailers such as Victoria’s Secret and La Vie En Rose. Approximately 75% of Change’s bras are in the DD to M cup size range, with a wide range of fits and styles (most lingerie retailers operating in Canada sell bras in the B-D size range). Change stores offers free bra fitting to ensure that its products meet the needs of its diverse customers, and prices are kept reasonable to attract a broad clientele. Approximately 75% of Change’s revenue comes from underwear and bras, with the remainder from loungewear, swimmer, nightwear and stockings.
The company launched in Denmark in 1995, with its first retail store having opened in Copenhagen in 2001. The company now operates more than 240 corporate and franchised stores globally and most of its stores are in Europe and Scandinavia — with the exception of Canada and Singapore.
