Kiehl’s Innovates with Canadian Growth Plans for 2017

February 8, 2017

L’Oréal owned, New York City-based natural beauty brand Kiehl’s is forecasting growth in Canada for 2017, including launching a strategy to enhance brand awareness in various markets. As well, new and existing stores will see increased personalization options, as well as design differentiation.

Kiehl’s was founded in New York City in 1851, and now boasts retail and wholesale accounts worldwide. The company entered the Canadian market via Holt Renfrew in the early 2000’s and in 2004, opened its first freestanding Canadian store on Toronto’s Queen Street West. Kiehl’s now operates 23 freestanding Canadian stores, as well as 49 points-of-sale in host retailers such as Hudson’s Bay, Holt Renfrew, Saks Fifth Avenue and Nordstrom. Kiehl’s also operates a robust e-commerce site, with plans for growth.

The company’s Canadian General Manager, Alexandre Ratté, explained that Kiehl’s now has stores in most of Canada’s top malls and as a result, new store expansion will be limited. The company’s goal is to not oversaturate the market — rather, Kiehl’s will look to strengthen its presence in the Canadian market by enhancing brand awareness to further gain market share both for its stores as well as existing points-of-sale.

Kiehl’s has the strongest brand awareness penetration in Western Canada, he explained, particularly in the Vancouver area with its high Asian population that spends on skincare products. The Greater Toronto area is close behind in terms of brand awareness and, this year, the Quebec market will see an increased focus in marketing as well as potential new stores. The company will soon announce a partnership with a well-known person in the province, and philanthropy will be involved in a new campaign. As well, Kiehl’s will gain a presence in Quebec City, according to Mr. Ratté.

‘Localization’ of the company’s stores will also be a strategy to differentiate the brand. Mr Ratté noted that some large chains operate locations that are ‘cookie-cutter’, regardless of geography. Kiehl’s is looking to add uniquely ‘local’ features to stores, including locally-based artwork, tile and other design features to create a sense of place. A shopper in a Montreal Kiehl’s, for example, will be reminded that they’re in that city by subtle elements in the store’s design.

‘Personalization’ is another initiative for Kiehl’s — last year, the company launched a personalized facial skincare serum called Apothecary Preparations in Canada. Apothecary Preparations is currently available in only nine Kiehl’s locations (Vancouver: Robson Street, Metrotown, CF Richmond Centre. Toronto: CF Toronto Eaton Centre, Yorkdale. Montreal: Ste-Catherine St., CF Carrefour Laval. Also at CF Chinook Centre in Calgary and at West Edmonton Mall). After an initial consultation and analysis, the customer is provided with a customized serum tailored to their skin needs, with each bottle including the customer’s name. Mr. Ratté explained that the highly successful initiative will eventually be expanded into other Canadian locations, adding to the company’s goal of differentiating offerings while providing increased personalization.

Kiehl’s will continue to expand its Canadian operations in 2017, though at a slower pace than in previous years. A new store location is about to be confirmed for a shopping centre in suburban Vancouver, and the company is in negotiations for a bigger presence in Hudson’s Bay stores. Kiehl’s is also looking to expand its digital presence in Canada. In 2017, the company’s e-commerce site will promote click-and-collect, further merging the in-store experience with online.

Kiehl’s has partnered with Oakmont Real Estate Services as its representative brokerage in Canada. The retailer generally seeks retail space in the 700 square foot to 1,000 square foot range, with an average of roughly 850 square feet, according to Mr. Ratté. He also noted that there’s a difference between its mall-based stores and street-front locations — mall stores drive traffic and sales, while street-front units act as a community destination while also creating brand awareness.

Holt Renfrew Unveils Latest Pacific Centre Expansion, Announces Ladurée Opening [Photos]

Craig Patterson

February 7, 2017

Holt Renfrew has unveiled the latest phase to open at its Vancouver CF Pacific Centre flagship, and has also revealed what’s in store for the rest of 2017. Included is newly expanded women’s ‘shoe hall’ with nine luxury designer boutiques, as well as Paris-based Ladurée, which will open its second Vancouver location inside of Holt’s this spring.

In April of 2015, Holt Renfrew announced that it would expand its CF Pacific Centre store by annexing about 40,000 square feet of space formerly occupied by Sport Chek/Atmosphere. The first phase of the newly expanded 188,000 square foot store opened in September of 2016, which included a new men’s store as well as a 3,500 square foot 80-seat Holt’s Café.

Holt’s has unveiled a second phase to the expansion, which includes an 8,500 square foot women’s shoe hall. Some of the world’s top luxury brands are featured in the new space, including nine luxury designer brand shop-in-stores by Aquazurra, Céline, Christian Dior, Christian Louboutin, Gucci, Manolo Blahnik, Miu Miu, Prada and Stuart Weitzman. The new shoe hall is about triple the size of the former department.

Holt’s describes the new space as having “seemingly endless sightlines,” that are “complimented by custom glass and metal fixtures throughout. Key to the space, are custom chairs and chaise lounges.”

The Vancouver Holt’s now boasts more footwear boutiques than any other Holt Renfrew location. The Square One store in Mississauga, which opened in July of 2016, features six women’s footwear shop-in-stores, while the Yorkdale store in Toronto has five.

New York City-based Janson Goldstein LLP is responsible for the CF Pacific Centre Holt’s overhaul, which will be ongoing well into 2017. The firm also designed the existing Holt Renfrew space, which opened to the public in the spring of 2017. Previously, Holt’s had occupied a 68,000 square foot store a block south in the same shopping complex.

This spring, French luxury bakery and sweets maker Ladurée will open its second Vancouver location in a space adjacent to the newly expanded Holt’s shoe hall. At 500 square feet, Holt’s Ladurée will be smaller than the 1,200 square foot Robson Street retail space that opened to massive crowds in March of 2016.

In Vancouver later this year, Holt’s will reveal its new 7,000 square foot two-level personal shopping suites, featuring ‘The Apartment’ — a 1,000 square foot by-invitation-only customizable social space for its top clients. Holt’s is also in the process of expanding its jewellery, leather goods and beauty departments. The expanded 30,000 square foot leather goods department will become the largest of its kind in Canada, and the beauty department will expand by 50% to almost 25,000 square feet.

*Photos supplied by Holt Renfrew.

Sugarfina Launches Canadian Store Expansion

Craig Patterson

February 6, 2017

Los Angeles-based, luxury grownup candy retailer Sugarfina has partnered with a Canadian brokerage to open stores in this country. Up to now, the brand’s products have only been available in Canada at retailers such as Nordstrom.

The Sugarfina concept includes premium items made from high-quality ingredients, sourced directly from artisan candy makers around the globe. Products include gourmet chocolates, caramels, gummies, malt balls, licorice and other delicious confections. Champagne-infused gummies and maple bourbon caramels have been popular, with celebrity endorsements helping grow brand awareness. In the summer of 2016, Sugarfina introduced Rosé rose-shaped gummy bears, which were so popular they sold out within two hours while traffic caused the company’s website to crash. The wait list grew to more than 18,000 people.

Prices aren’t out of reach, despite being positioned as a luxury product. Small containers of candies are priced starting at under $10, with mix-and-match options including a ‘design your own bento box’ where several smaller candy-filled cubes (between three and eight cubes per ‘bento box’) are assembled into gift packages.

The company was founded by married couple Rosie O’Neill and Josh Resnick, who came up with the concept after watching the original Willy Wonka and the Chocolate Factory movie together on their third date. Recognizing a niche for grownup candy retail, the couple traveled the world and met with candy makers, eventually opening an online candy shop in August of 2012. In November of 2013, Sugarfina’s first boutique opened on Santa Monica Boulevard in Beverly Hills. The 1,400 square foot store was referred to as “the Tiffany & Co.” of candy” by online culinary publication Eater, referencing both the white-and-blue colour scheme as well as the store’s high-end offerings.

The Sugarfina concept has grown rapidly, now boasting 27 boutiques in the United States with three of those being located in Nordstrom stores. In Canada, Sugarfina shop-in-stores are located inside of all five Nordstrom stores operating in this country. The first shop-in-store opened at Nordstrom’s CF Pacific Centre flagship in Vancouver in September of 2015.

Sugarfina is working with Tony Flanz of brokerage Think Retail on its freestanding Canadian store expansion, which could see up to 10 stand-alone locations open in this country. Initially, the retailer is looking at Toronto and Vancouver for stores, ideally in the 600 square foot to 1,000 square foot range within shopping malls. Sugarfina stores do exceptionally high sales per square foot, and its preferred co-tenants include Lululemon, Aritzia, Sephora, Apple, Godiva and other marquee brands, according to Think Retail.

INDOCHINO Announces 8 Stores for 2017

Craig Patterson

February 3, 2017

image-asset - 2021-04-27T230421.525 — Photo: INDOCHINO at Yorkdale Shopping Centre

Vancouver-based INDOCHINO, the world’s largest made-to-measure menswear company, has announced that it will open three locations in Western Canada this spring, as well as five in the United States later this year. The company is seeing tremendous sales growth and as a result, is expanding its brick-and-mortar operations rapidly.

INDOCHINO currently operates five Canadian locations — two of those are in Toronto (King Street east and Yorkdale Shopping Centre), and one each in Mississauga (Square One), Ottawa (CF Rideau Centre), and in Vancouver’s Yaletown. The Vancouver store was the company’s first permanent space when it opened in the fall of 2014. INDOCHINO launched its shopping mall location initiative last summer with the opening of its Mississauga store, noting that such stores see considerably more walk-by traffic than on urban street-fronts. INDOCHINO also has stores in New York City, Boston, Philadelphia, San Francisco and Beverly Hills CA.

INDOCHINO announced a major international expansion last year, with the goal to open about 150 retail stores globally while selling a million suits annually by the year 2020. The company was founded in Vancouver in 2007 as an online custom suit retailer and in late 2015, co-founder Kyle Vucko was replaced as CEO by Shop.ca founder Drew Green.

Photo: INDOCHINO at Yorkdale Shopping Centre

The three newly announced Canadian stores will be in Edmonton, Calgary and suburban Vancouver. The Edmonton store, opening on March 30 of this year, will be at West Edmonton Mall. The Calgary store, opening on April 6, will be at CF Chinook Centre. A third location, at Metropolis at Metrotown in Burnaby, will open some time this spring, according to INDOCHINO.

All three malls ranked highly in last month’s Retail Council of Canada’s Shopping Centre study, in both annual sales per square foot productivity as well as over all pedestrian footfall. CF Chinook Centre is ranked Canada’s 7th most productive mall with sales per square foot at $1,057, while Metropolis at Metrotown is in 8th place at $1,035. Both West Edmonton Mall and Metropolis at Metrotown see in excess of 28 million visitors annually.

Five American cities will also see new INDOCHINO stores, opening later in 2017. According to a press release, the retailer “is actively investigating new markets in major cities such as Washington, D.C., and Chicago, where the company has a thriving online customer base. The brand is also looking to open secondary locations in large markets such as New York.”

“This year, we’re almost doubling our showroom network as we focus on significantly expanding our experiential retail model,” said Mr. Green. “As we continue to bring our unique showrooms to more cities and introduce custom clothing as an attractive and affordable alternative to ready-to-wear, we’re beginning to change the way a generation of men suit up, and that’s incredibly exciting to see.”

The stores, or showrooms as INDOCHINO calls them, are an extension of the company’s online made-to-measure experience. INDOCHINO customers are paired with a Style Guide in-store, who helps them design one-of-a-kind suits or shirts. Style Guides take measurements, assist with fabric selection, and walk shoppers through custom options including buttons, vents, pockets, lapels and monograms. Each garment is made to order and delivered within four weeks, when customers can return for a second fitting to ensure a perfect fit. The showroom works in tandem with INDOCHINO’s e-commerce website, so men can access their profiles and reorder at their convenience. The showrooms are designed to be modern and bright, boasting comfortable reception areas and lounges dedicated to serving groom parties and other groups.

Last year was record setting for INDOCHINO, with three new showrooms, year-over-year omnichannel sales growth of 54% and year-over-year sales in comparable showrooms ending the year at 32%. In February 2016, the company announced a US $30 million strategic investment by Dayang Group, the world’s largest suit manufacturer, which has helped accelerate the company’s expansion plans, significantly enhanced the product offering to its customers, and generated additional operating efficiencies.

In 2017 the company’s growth trajectory has continued, with January’s year-over-year omnichannel sales growth over 50%, according to INDOCHINO.

Oberfeld Snowcap represents INDOCHINO as brokerage in Canada. According to Oberfeld’s website, INDOCHINO is seeking retail spaces both on street-fronts and in enclosed shopping centres, generally in the 1,500 to 2,000 square foot range.

*Photos are of the company’s Yorkdale store, and were supplied.

Retail Thought Leadership Conference, March 10

Retail Insider

February 3, 2017

University of Alberta School of Retailing’s third annual Thought Leadership Conference takes place on March 10 this year in Edmonton, providing both thought leadership and networking opportunities. The half-day event is conveniently located in a hotel/conference facility attached to Edmonton International Airport, allowing for easy fly-in-fly-out.

Tickets are still available ($225+GST) for the conference, and can be purchased here. Breakfast, lunch and parking are included.

There’s also a hotel discount for out of town guests interested in staying at the conference venue — the funky/beautiful Renaissance Edmonton Airport Hotel.

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The conference features speakers from across Canada, with a focus on the topic of leadership strategy. Speakers include:

Brett Halliday, President of Michael Hill, who will open the day with a discussion about the ‘accidental career’,
Dr. Kyle Murray, Director of the School of Retailing,
Kamy Scarlett, Senior Vice President, Retail and Chief Human Resources Officer, Best Buy Canada,
There will also be an award given for Advancing Retail as a Career, with this year’s recipient being Toni Galli, Country Sales Manager of H&M Canada. Diane Brisebois, President & CEO of Retail Council of Canada will present Toni the award.

On the evening of Thursday, March 9, an intimate cocktail event, sponsored by Canada Safeway and hosted by Retail Insider, will be held in ‘The Library’ at the Renaissance Edmonton Airport Hotel.

Availability is limited, and tickets are available until March 4.

For more information, contact Emily Salsbury-Deveaux at: retail@ualberta.ca

Arc’teryx Launching Innovative Store Concept as it Continues Retail Expansion

Craig Patterson

February 2, 2017

Arc'teryx Vancouver (Rendering via Unison Construction Management.)

North Vancouver-based outdoor clothing and sporting goods company Arc’teryx will launch a concept store in downtown Vancouver this spring, with a particular focus on the consumer experience. It’s the sixth store for the brand in Canada, as Arc’teryx expands its retail operations both domestically as well as globally.

Arc’teryx was founded in North Vancouver in 1989, selling products associated with climbing, skiing, snowboarding, backpacking, and hiking-related activities. The company’s designs often feature technological advancements to enhance functionality, making it prominent in outdoor technical apparel. The company was purchased in 2005 by Finland-based Amer Sports, and now operates stores and wholesale accounts globally.

In mid-May of this year, Arc’teryx will open a new store location at 813 Burrard Street in downtown Vancouver, in a retail space formerly occupied by fashion retailer Le Chateau. Arc’teryx will span about 4,020 square feet, according to the company’s Marketing Manager Stephanie Jamieson. It will be the first location for the brand to be particularly ‘community focused’, with a space where shoppers can meet, socialize and experience the product. The store will therefore be “less transactional” and more experiential, according to Ms. Jamieson. Features such as a ‘warranty and repair bar’, for example, will allow customers to further engage and deal with any potential product issues. The store is designed to complement the company’s e-commerce site, which offers the most comprehensive selection of Arc’teryx products.

The Burrard Street store’s interior will include ample use of granite and other raw materials — a nod not only to the North Shore Mountain scenery at the end of Burrard Street, but also the Stawamus Chief north of the city (a mountain with a popular hiking trail). The store’s exterior will also feature grey granite in its exterior, as per the rendering at the top of this article.

The store will also have a dedicated area for its Veilance men’s technical apparel brand — a unique feature to the Burrard Street store. The store will also carry a curated selection of the company’s outdoor-focused merchandise, similar to other Arc’teryx locations.

Arc’teryx’s Burrard Street location is ideal, noted Ms. Jamieson, being just south of prominent retailers such as L’Occitane en Provence, Roots, and Lululemon’s Robson Street flagship. A block north is Vancouver’s burgeoning ‘Luxury Zone’, centred on the 1000 Block of Alberni Street, featuring some of the world’s top luxury brands. Despite the large size of the Burrard Street Arc’teryx, it will not technically be a flagship — Ms. Jamieson noted that the company is still looking to formally define what an Arc’teryx flagship will look like as it continues to expand its retail strategy.

The new Burrard Street store will be Arc’teryx’s second location in Vancouver. The company’s first Vancouver store opened in the Kitsilano area October of 2013, measuring about 2,100 square feet.

Besides the two Vancouver stores, Arc’teryx operates four stores in Montreal, Whistler BC, and Toronto. Arc’teryx’s first Canadian store opened in 2006 at 1515 Ste-Catherine Street West in Montreal (according to Ms. Jamieson, the 4,500 square foot store will see a major renovation this year). In June of 2014, Arc’teryx opened a 2,400 square foot ‘partner store’ in Whistler, BC, followed by a 2,700 square foot unit on trendy Queen Street West in August of 2014. A second Toronto store, measuring about 2,800 square feet, opened in October of 2016 in the new Nordstrom-anchored expansion wing at Yorkdale Shopping Centre. The Yorkdale unit was the company’s first mall location for Canada.

While Arc’teryx has no plans as of yet to open any other new stores in Canada in 2017, it will open three stores on the U.S. West Coast this year. The company has stores in various global markets, including the United States, Switzerland, France, UK, Japan, and China.

*Rendering via Unison Construction Management.

Innovative 3D Store Tour Camera Technology Launches for Retailers

Craig Patterson

February 1, 2017

Toronto-based entrepreneur Warren Vandal has launched an innovative 3D virtual walk-through camera technology that allows viewers to tour stores, and click on products for sale within. The Matterport technology provides a unique opportunity for retailers to extend their open hours to 24/7, as well as allowing their customers to buy from their e-commerce site.

In addition, Mr. Vandal is now also able to create Google Street View tours, allowing the world to come and virtually tour a store within Google Maps.

Last week, we profiled the Azadi Jewellery store at Toronto’s CF Shops at Don Mills. Mr. Vandal photographed the store using his Matterport technology, creating a 3D floor plan of the store that leads to a virtual walk-through of the interior space. It’s as if one is actually in the store, with a high-resolution technology that can also be edited and hyper-linked. The technology allows viewers to click on a product in the store, for example, taking them directly to the retailer’s e-commerce site for purchase. For example, in the Azadi tour below, you can click and link directly to some notable jewellery pieces that are on the retailer’s website.

“It’s like Google Street View on steroids,” said Mr. Vandal, describing the new technology that he expects to roll-out with selected retailers across the country. The process is quite simple, he explains — the 3D camera gently spins, capturing colours and contours of retail spaces. The camera then calculates dimensions and spatial relationships between objects. The Matterport Cloud then analyzes data uploaded from the camera, automatically creating an immersive 3D model. The end result is “users feel just like they are in the space”, according to Mr. Vandal, noting that the simplicity of the technology makes it cost-effective to the end-user, which means that even small retailers can afford to have their stores 3D photographed.

The technology further joins the gap between physical retail and e-commerce, and may be particularly of interest to retailers that have beautiful store interiors, and want to show them off to the world. The functionality of linking to products in the store is an added bonus. One can imagine taking a tour of Harrod’s in London, for example, walking through one of its magnificent rooms and then clicking on a watch, statue or other item that is available for purchase.

[Above is a 3D tour of the McKinsey & Company offices in Toronto, located a block south of the Bloor Street ‘Mink Mile’. Below is a multi-room tour of a beautiful new residence in Toronto]

Mr. Vandal also has camera technology that can be converted to Google Street View tours. What that means is after a store is photographed, the retailer can upload the tour directly to Google Maps for the world to see. The Azadi Jewellers store in Toronto is now viewable in Google Street View, for example.

The 3D technology has been used for some time for various real estate tours, including office, industrial and residential. It’s a fairly new concept for retail, however, particularly with its e-commerce functionality. It’s an exciting technological advancement that will make touring retail stores online even more dynamic — though potentially dangerous to one’s pocketbook, given the potential to purchase from featured stores.

Mr. Vandal is available to coordinate 3D camera tours for retailers in the Greater Toronto area, and can be reached at:
Website: geomarketingsolutions.com
Email: wvandal@geomarketingsolutions.com
Phone: 416-424-1718

*Custom content. To work with Retail Insider, email: craig@retail-insider.com

Style Encore Opens 1st Canadian Store

Craig Patterson

February 1, 2017

Minneapolis-based Style Encore, operating under the Winmark Corporation umbrella, officially opens its first Canadian store this week. The unique women’s resale retail concept is looking to expand its Canadian operations rapidly under a franchise model, with more than 40 territories available nationally.

Husband and wife team Christina and Kyle Bromley are the first Canadian franchisees to open a Style Encore location in Canada. The couple comes from an accounting background, though Ms. Bromley also has 15 years experience in buying and selling clothes online. Their new Style Encore store, which officially opens on February 2, is located in Guelph, Ontario, in unit #4 at 170 Silvercreek Parkway North.

The Style Encore retail concept caters to women in their late 20’s and upwards, selling gently-used clothing, footwear, handbags and accessories. Fashions range from casual to dressy, with Style Encore buying items that have been in retail stores within the past couple of years in order to reflect current trends. Sizes range from size 0 to 4X, and the company also makes it clear that it doesn’t sell counterfeits by taking measures to ensure brand authenticity.

Unlike consignment stores, Style Encore pays cash on the spot for items it wants for its stores, and walk-ins are welcome.

Style Encore is working with Don Gregor of Aurora Realty Consultants as its Canadian broker. Style Encore locations will ideally be in the 3,000 square foot to 4,000 square foot range, in grocery-anchored strip centres or power centres with a fashion mix. Easy vehicle access is key for both consumers and product deliveries.

Mr. Gregor informs us that he’s just completed a deal for a second Canadian store location, at 1289 Marlborough Court in Oakville, Ontario.

Winmark Corporation continues to seek Canadian franchisees for its Style Encore expansion. There are currently 40 territories open in Canada for Style Encore franchisees. The company has signed agreements for various sites, so the company is not soliciting sites from landlords at this time.

Minneapolis-based Winmark specializes in developing franchises for retail stores that buy, sell and trade new and used merchandise. It’s the parent company to retail concepts Plato’s Closet, Once Upon A Child, Play It Again Sports, Music Go Round, Style Encore, Wirth Business Credit and Winmark Capital. All focus on different demographics but adhere to the same frugal concept of ‘sell.buy.repeat’. The company’s retail brands have in excess of 1,180 franchised operations in North America with over $1 billion in sales, and it continues to expand rapidly. Winmark first entered the Toronto market in 1993 with the opening of a Play It Again Sports store in Whitby.

*Photos are of the new Guelph store, and were supplied.

Tesla to Open First West Coast Mall Store

Craig Patterson

January 31, 2017

California-based electric car company Tesla will open its third Canadian shopping centre location this spring. Tesla continues to see strong sales in Canada, according to sources, with plans for more stores in various markets.

Signage went up Friday afternoon for a new Tesla store at the Park Royal shopping centre in West Vancouver. The store will be located in the centre’s outdoor ‘Park Royal South’ component, next to Old Navy. Tesla will replace retail units for Lenscrafters and Pinkberry, and will be just over 2,900 square feet in size. Brodie Henrichsen, Principal at brokerage Northwest Atlantic, acted on behalf of Tesla in lease negotiations with Park Royal landlord Larco Investments.

West Vancouver is one of Canada’s wealthiest communities, with home prices among the highest in the country. The city is also known for its luxury automobiles, with one out of every 142 residents owning a luxury car priced in excess of $150,000. The entire Vancouver region is also considered to be the ‘luxury car capital of North America’, in terms of luxury car density.

Tesla also operates two Vancouver stores — a smaller location at 929 Robson Street that opened in 2014, as well as an 18,500 square foot store and service centre in the Kitsilano area.

Tesla currently operates eight Canadian stores. Besides the two Vancouver locations, Tesla’s stores are in Toronto (x 2), Oakville ON, Calgary, Montreal and Quebec City. The Montreal store/sales centre is the largest in North America, spanning an impressive 45,000 square feet. The Quebec City sales centre is by appointment only. The company’s other two mall-based stores are at Toronto’s Yorkdale Shopping Centre (Tesla’s first store in Canada), and at Calgary’s CF Chinook Centre. More locations will be announced this year as the company continues to penetrate the Canadian market.

Canadian Retail Continues to Polarize as Stores Close

Craig Patterson

January 31, 2017

The polarization of Canadian retail continues into 2017, with a number of retailers closing store locations while both luxury/high-end and value-priced retailers continue to expand. We recently published our 2017 Canadian retail industry forecast, and this update considers the recently announced Canadian store closures.

Since the beginning of January, several retailers have either announced they were exiting Canada, have sought bankruptcy protection, or expressed the possibility that they could close their Canadian stores. These include the following: the parent company of menswear retailer Tip Top Tailors entered creditor protection, which could result in the closure of stores and staff layoffs. HMV Canada announced that it would close all 102 Canadian store locations, marking the end of an era for the company that entered the Canadian market more than 30 years ago in 1986. Vancouver-based footwear retailer Shoes.com announced that it has shuttered its operations, including its e-commerce websites and two brick-and-mortar stores.

Further, Toronto-based Jean Machine, a leading denim specialist for four decades, entered bankruptcy protection in early January this year. At the same time, German women’s fashion brand Gerry Weber has closed its Canadian stores in order to focus on wholesaling, while American Apparel is in the process of liquidating and closing its Canadian stores.

Unfortunately, this likely won’t be the end of store closings in Canada — Retail Insider has learned that a Quebec-based company will soon announce the shuttering of one of its retail concepts, resulting in the closure of all of its stores. Other retailers are also struggling, according to sources, and may decide to end their operations in 2017.

Polarization in Canadian retail has been a hot topic for the past couple of years, with HRC Retail Advisory CEO Antony Karabus noting in a May, 2015 article that Canadian retail would continue to expand in the luxury and in the value-priced sectors, while “middle” retailers would continue to be pressured by the polarization impact. It appears that Mr. Karabus’ May 2015 polarization predictions are coming to fruition in Canadian retail.

Luxury retailers have continued to expand into Canada over the past two years, with Nordstrom and Saks Fifth Avenue opening a number of stores, Harry Rosen and Holt Renfrew remodelling many of their stores, and luxury mono-brands both adding new stores and expanding existing stores. A number of the country’s leading brokers say that luxury brands continue to remain very interested in both Toronto and Vancouver, and are also eyeing other markets as they mature and the economy improves. Luxury mono-brand boutiques will open in Vancouver’s ‘luxury zone’ this year, with Richemont making major investments in multiple locations, as well as LVMH and others set to make announcements. In Toronto, mono-brand luxury retail is expanding with a particular focus on the two ‘Yorks’ – Yorkville and Yorkdale Shopping Centre, which will both see multiple luxury store openings this year.

Some existing luxury boutiques are also reporting high sales, with some sales productivity numbers in Vancouver and Toronto (particularly Yorkdale) being in the stratosphere. It is clear that there are wealthy people in Canada who are shopping, not to mention tourists, who are also spending freely in Canada’s luxury and premium-priced stores.

High-end department stores are also doing well, with some planning to continue opening new locations. Nordstrom will open a third Toronto location in September of this year, and it could open more locations after examining its Canadian operations. Currently, the company’s Vancouver, CF Toronto Eaton Centre and Yorkdale stores are among the top performers in the chain, according to multiple sources. Homegrown Holt Renfrew, which was expected to see a significant impact in sales with the entry of Nordstrom and Saks, continues to maintain its position as the country’s leading luxury retail for women (Harry Rosen dominates for men), while Saks Fifth Avenue readies to open stores in Montreal and Calgary and, at some point, Vancouver.

At the lower-end, discount and off-price retailers continue their aggressive store expansions. Montreal-based Dollarama is opening stores at a rapid rate, as it identifies opportunities and secures real estate. Giant Tiger, catering to value-seeking families, is regularly announcing store locations as it sees considerable success despite increasing competition. American big-box retailer Costco continues to see strong sales in Canada, with a level of penetration about twice that in the United States. Target’s exit from Canada has been beneficial to a number of retailers as well, with real estate opportunities for TJX Companies, which continues to aggressively open stores under its Winners, Marshalls and HomeSense banners.

Off-price retailer Saks OFF 5TH is also announcing and opening stores at a rapid rate, with plans to operate 25 Canadian stores by next year. Nordstrom Rack will enter Canada next year, with plans to open between 15 and 20 stores in this country.

Fast-fashion retailers also continue to grow their Canadian operations — Forever 21 and F21 Red will open new stores this year, as will H&M, Old Navy and Inditex, best known for its Zara nameplate. Uniqlo will also continue expanding in Canada, with more store announcements expected to be made in the coming months.

At the same time, mid-market retailers appear to be shrinking in size, or closing shops altogether. An exception to this, however, is mid-priced retailers that have differentiated themselves from competitors, and those with a particularly compelling value proposition. For further discussion on these themes in the Canadian retail market, we will follow up on this article with a Q&A interview with Mr. Karabus of HRC Retail Advisory.

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Retail InsiderCanada's Most-Read Online Retail Industry Publication.

Kiehl’s Innovates with Canadian Growth Plans for 2017

Holt Renfrew Unveils Latest Pacific Centre Expansion, Announces Ladurée Opening [Photos]

Sugarfina Launches Canadian Store Expansion

INDOCHINO Announces 8 Stores for 2017

Retail Thought Leadership Conference, March 10

Arc’teryx Launching Innovative Store Concept as it Continues Retail Expansion

Innovative 3D Store Tour Camera Technology Launches for Retailers

Style Encore Opens 1st Canadian Store

Tesla to Open First West Coast Mall Store

Canadian Retail Continues to Polarize as Stores Close

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