Luxury brands continue to open Canadian locations, and a spike in Chinese tourism may be partly the reason. The number of Chinese visitors to Canada is substantial, and is expected to triple over the next five years. Chinese visitors are now the second-largest contributors of tourism dollars to the Canadian economy and as Canada is the world’s third most popular destination for Chinese tourists, retailers can’t help but take notice. 

Jeff Guthrie, Chief Sales & Relationship Officer at Moneris, says that Canada is only third to New Zealand and the United States for popularity among Chinese tourists. Of the roughly 500,000 Chinese who visited Canada in 2014, about 55%, or 270,000, visited British Columbia. The second most visited province was Ontario, with 38% or about 186,000 Chinese visitors. Mr. Guthrie says he expects Chinese tourism to triple by the year 2020 and remarkably, the number of Chinese applications for Visas to come to Canada were up 51% in January of 2015 over the year before. 

Retail accounts for about 77% of all spending by Chinese tourists in Canada, while only 7% goes to lodging and 8% to dining. Spending by Chinese visitors continues to grow each year. In 2013, the average amount spent by each individual Chinese visitor averaged $1,804, up from $1,630 in 2010. Mr. Guthrie says that these numbers may even be higher if purchases for friends and family are factored in.  

As China’s population gains affluence, residents are looking to see the world. Mr. Guthrie says that China now boasts the world’s largest ‘middle class’, consisting of about 600 million people. The Chinese are spending an estimated $164 billion internationally annually, more than any other nation. Luxury goods, apparel and uniquely Canadian items are especially popular.

Mr. Guthrie explains how Moneris has partnered with Chinese card company China UnionPay to help Canadian retailers benefit from the forecasted increase in Chinese tourism. UnionPay is the world’s largest card issuer, with over 4.7 billion in use to date. Canadian retailers can now include China UnionPay in their payment systems at no extra cost, and fees for retailers are lower than those of traditional cards such as VISA and Mastercard. Mr. Guthrie explains how it makes sense for Canadian retailers to include the China UnionPay option, as its familiarity will encourage Chinese tourist patronage.

Having studied luxury retail in Vancouver and Toronto, we were particularly interested to learn more about why Chinese tourists are coming to Canada to buy luxury goods. We spoke with luxury retail expert Farla Efros, Executive Vice President and COO of HRC Advisory. Ms. Efros explained that Canada is an attractive shopping destination for the Chinese for a variety of reasons. The price difference of luxury goods in China vs. Canada, for example, can be as high as 45 to 51% when factoring in import duties, consumption tax, and VAT. Chinese shoppers believe that goods bought in Canada are less likely to be counterfeit and furthermore, the breadth and selection of luxury goods is often better in North America. Getting a tourist visa to visit Canada is relatively simple, enhancing Canada’s reputation as a Chinese visitor destination. 

Ms. Efros went on to explain how Canada could become an international luxury goods destination with the lower dollar, making goods bought here even more of a bargain. She said that luxury brands already recognize Canada’s ability to attract top-spending tourists and as a result, these brands continue opening free-standing flagships. Ms. Efros also explained how mono-brand luxury stores in Canada will see an expanded selection of products, including exclusives, as sales continue to increase. Chanel, for example, creates a limited quantity of some items and then limits their distribution. Canada may see more than its fair share of exclusives if sales continue to increase. Furthermore, brands such as Valentino, Saint Laurent Paris, Brunello Cucinelli, Versace, Tod’s and other brands continue to seek Canadian retail space, recognizing potential sales from both affluent locals as well as increased tourism. 

If what Mr. Guthrie says is correct, Canada will be seeing substantially more Chinese tourists over the next several years. Ms. Efros notes that Chinese shoppers seek out prominent brands, both for themselves as well as gifts for others. Given the projected increase in spending among Chinese tourists, we may now be better able to explain why Toronto’s Bloor Street West and Vancouver’s Alberni Street will continue to see luxury brands signing new leases. 

Below is an infographic provided by Moneris, providing insight into Chinese tourism in Canada. 

Toronto’s Yorkdale Shopping Centre has announced a new west expansion, which will be anchored by a flagship Restoration Hardware. The expansion will involve demising the mall’s former 190,000 square foot Sears location. It will add to the mall’s already substantial expansion plans, which includes an eastward expansion to be anchored by Nordstrom and Uniqlo. We have included lease plans in this article, provided by Yorkdale’s landlord, Oxford Properties. 

The new west expansion will span an estimated 120,000 square feet. Of that, 69,000 square feet is earmarked for upscale home furnishings retailer Restoration Hardware. The four-level store will be Restorations Hardware’s largest Canadian location. The new west expansion is scheduled to open in November of 2016. 

The mall’s 298,000 square foot east expansion, currently under construction, will house a 191,000 square foot Nordstrom, a 24,000 square foot Uniqlo, and about 30 additional retailers. Sources say that a number of retailers in the east expansion will be new to Canada, as Yorkdale is now considered to be Canada’s top destination for retail brands looking to enter the Canadian market. The east expansion is scheduled to open in August of 2016. 

Yorkdale also completed a $220 million southwest expansion in 2012. The expansion included a significantly enlarged Holt Renfrew, which grew from about 65,000 square feet to over 120,000 square feet. The expansion also houses Canada’s largest Apple Store as well as retailers such as Tesla Motors, Microsoft Store, Club Monaco, John Varvatos, Anthropologie and AllSaints. 

By 2018, Yorkdale is expected to be North America’s top-selling shopping centre, with sales anticipated to exceed $2 billion. The mall already includes Canada’s densest concentration of luxury brands, located in the mall’s ‘luxury wing’ in the area adjacent to Holt Renfrew. Yorkdale is currently the only suburban Canadian shopping centre to feature a world-class luxury retail component, housing free-standing locations for brands such as Cartier, Bulgari, Mulberry, Jimmy Choo, Moncler, David Yurman, Montblanc, Versace, Salvatore Ferragamo, Hugo Boss, and others. This spring, French luxury brand Longchamp will open a new store across from Holt’s and in July, luxury timepiece brand Jaeger-LeCoultre will open its first Canadian location. Holt Renfrew, itself, features mall-facing concessions for luxury brands Chanel, Prada, Gucci and Louis Vuitton, as well as internal concessions for Dior, Giorgio Armani and others.  

Sources say that a further westward expansion could be in the works for Yorkdale, and we’ll discuss this further when permitted. 

*We previously featured a rendering in this article, and were requested to remove the image. 

*Article originally published April 16 2015, updated April 20, 2015.

H&M‘s upscale fashion brand COS will open Canadian locations, beginning with a flagship on Toronto’s ‘Mink Mile’ which opens this fall, and a location in downtown Montreal which opens this winter. Two other Toronto locations are said to be in the works as the brand expands into Canada. The potential for three Toronto locations is remarkable, given that the Swedish brand currently operates only two U.S. locations. 

COS, which stands for Collection of Style, launched in Stockholm in 2007. The brand’s price point is marginally higher than that of H&M, and it says that its designs are timeless, tactile, functional, classic and modern. Collections include fashions for women, men and children. 

COS recently signed a lease for Toronto’s 85 Bloor Street West, formerly occupied by jeweller Tiffany & Co. Spacelist.ca indicates that the entire 85 Bloor building is 13,451 square feet. COS will occupy three levels of the four level retail structure. 85 Bloor Street West is owned by Toronto-based real estate company Burnac Corporation, and is located next to Hugo Boss on Canada’s most prestigious shopping strip.

COS also secured space in an historic retail building at 1310 Rue Ste-Catherine Ouest in Montreal. The space was most recently occupied by fashion retailer Le Chateau. 

Sources also say that COS continues to negotiate for space at Toronto’s Yorkdale Shopping Centre, as well as possibly for a location at Toronto Eaton Centre. If both potential deals conclude, Toronto would be North America’s only city with three COS locations. We must be clear that we cannot confirm either of these locations at this time.

COS currently operates two stores in the United States. Its first location, measuring 5,680 square feet, opened on North Beverly Drive in Beverly Hills, CA, in October of 2014. A second 4,950 square foot location opened in December of 2014 in New York City’s Soho area. According to its website, COS currently has stores in 26 countries. 

Thank you to Urban Toronto‘s ACT7 for this tip and related research. 

British fashion brand AllSaints will open its second Canadian location this summer at Vancouver’s Pacific Centre, according to Business in Vancouver. AllSaints will locate below the mall’s 230,000 square foot flagship Nordstrom, which is scheduled to open on September 18. 

AllSaints, as well as the 44,000 square foot retail space under Nordstrom, is scheduled to open on June 17. Pacific Centre’s AllSaints will be 2,237 sqare feet. 

AllSaint’s first Canadian location opened in April of 2013 at Toronto’s Yorkdale Shopping Centre. The 6,600 square foot store is located in the mall’s southwest wing which opened in the fall of 2012. 

AllSaints was founded in 1994 in Spitalfields, and the brand has grown to over 70 free-standing retail locations worldwide. It has 16 free-standing U.S. locations in major cities including New York City, Boston, Los Angeles, Las Vegas, San Francisco, Miami, Washington, D.C., Santa Monica and Seattle, as well as four outlets. It also operates concessions within many American Bloomingdale’s locations. The brand retails menswear, womenswear, footwear, and accessories. The brand is known for being ‘edgy and directional’ with a muted palette dominated by blacks, browns, whites, and grays. The company’s retail stores feature interiors of exposed brick, weathered wood and metal. Store exteriors usually feature windows with antique sewing machines framing each store’s entrance.