Saks Fifth Avenue‘s off-price retail concept, Saks OFF 5TH has revealed three more Canadian locations, adding to four that it announced earlier this year. Located in Montreal, Toronto and Ottawa, two of the stores will be in outlet malls and one will be downtown. Saks says it plans to operate up to 25 Canadian OFF 5TH locations by the year 2018.
Saks has now revealed that a second Ottawa OFF 5TH location, set to open in the fall of 2016, will locate within the downtown Hudson’s Bay flagship. Located at 72 Rideau Street, the Saks OFF 5TH store will measure about 33,000 square feet. The Hudson’s Bay store is also undergoing extensive renovations. It is significant that two Ottawa locations have now been announced, as we can deduce that similarly-sized markets could see more than one Saks OFF 5TH in Canada, including cities such as Edmonton and Calgary.
Saks OFF 5TH will also open in two top Canadian outlet malls — a 25,000 square foot location at Toronto Premium Outlets, and a 26,000 square foot store at Premium Outlets Montreal. Both will involve converting existing Hudson’s Bay Outlets to OFF 5TH outlets. The Toronto location will open in the spring of 2016, and an opening date has yet to be set for Montreal.
Toronto’s Oxford Properties-owned Scarborough Town Centre is planning major improvements, as it looks to be one of the top malls in the region. We spoke with General Manager Robert Horst for details.
The 1.3 million square foot, 250+ store mall saw $62 million in enhancements in 2010, resulting in a remarkable 40% sales productivity increase. Building on this success will be more mall upgrades, with a goal for the centre to be “the best shopping experience between Yonge Street and Montreal”, according to Mr. Horst.
Scarborough Town Centre PHOTO: OXFORD PROPERTIES
Scarborough Town Centre’s food component is next to see improvements. Mr. Horst explained that Oxford Properties will invest $35-million in a two-phase, two-level space with a variety of quick-service food vendors as well as new premium, fast-casual restaurants. By August of 2016, the first-phase lower level food area will feature increased natural light and a glass-bridge walkway with 22 new quick-service food vendors as well as added seating capacity with dish, cutlery and scullery service for a more upmarket dining experience. The second-phase upper level food area will offer a more upscale, interior patio-style seating beneath the existing mall skylight. Three premium, fast-casual, full service restaurants, two quick-service food vendors and 12 retail units will be introduced. The current access-controlled family and parenting rooms will be expanded and enhanced, and all corridors will be widened. Construction on this level is scheduled to begin in August 2016 and be completed by May of 2017.
SCARBOROUGH TOWN CENTRE FOOD COURT RENDERING, COURTESY OF OXFORD PROPERTIES.
Mr. Horst explained that the mall’s enhanced dining experience is part of a greater effort to improve the mall’s already exceptional and growing productivity, by keeping shoppers satisfied, comfortable and as a result, spending. Oxford Properties is spending millions on its mall portfolio to elevate its food offerings — Yorkdale Shopping Centre saw ‘Dine on 3‘ open in the summer of 2012, and Mississauga’s Square One saw a similar addition a year later. More Oxford malls will continue to see similar improvements including downtown Edmonton City Centre, which will see its food court relocated from the basement to a spacious, sun-flooded top level location.
EDMONTON CITY CENTRE WILL SEE AN ELEVATED FOOD EXPERIENCE OPEN IN ITS THIRD FLOOR. RENDERING: OXFORD PROPERTIES.
Scarborough Town Centre is seeing exceptional productivity growth, according to Mr. Horst. Annual sales per square foot were less than $650 last year and remarkably, the centre is now seeing sales averaging about $770 per square foot. That number is expected to increase to over $800 by the end of this year, he said. New retailers and store renovations are partly responsible — recent store openings have included Michael Kors, Gerry Weber, Fonelab, Geox, iStore, Rockport, Thomas Sabo, Vince Camuto, Torrid, and L’Occitane en Provence and as well, over 20 retailers have recently renovated stores. More retailers are on the way and so far, Flyzone and a 23,000 square foot Zara are confirmed to open in the centre in 2016. Mr. Horst complimented Jay Drexler, Director of Retail Leasing, for securing exceptional tenants for the centre.
Mr. Horst explained how sales continue to grow substantially at the centre. Not only is this a result of a stronger retail mix and other mall improvements, but the mall itself is seeing a more upscale demographic as its catchment area expands. Scarborough is also seeing an increasingly upscale demographic as homebuyers recognize the opportunity to buy reasonably priced (for the area) houses on lots appropriate for tear-downs. Home prices are on the rise and remarkably, some parts of Scarborough, particularly along the waterfront, are seeing double-digit annual appreciation.
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More improvements are planned for Scarborough Town Centre, though Oxford Properties is waiting for the City of Toronto to finalize subway plans which could include a new station at the centre. Once finalized, Oxford Properties will determine what’s next for the centre.
Mr. Horst would not comment specifically on reports that La Maison Simons will move into Scarborough Town Centre in 2018, except to say that it would be a desirable tenant. In June, Simons’ CEO Peter Simons said that he was going to open a store in the mall, as well as at Oxford-owned Yorkdale Shopping Centre in 2019.
FGL Sports-owned Sport Chek is continuing to open innovative flagship stores in Canada. Last week, Sport Chek opened two new flagship locations in the Toronto area, and the company has plans to open several more in selected Canadian markets. We spoke with FGL’s Eric Watt, who’s leading the flagship strategy, about Sport Chek’s flagship store plans over the next several years.
Sport Chek’s flagships are large and, according to the company, reflect the most digitally-savvy store execution anywhere in the world. Flagship stores feature digital installations to improve the customer experience, and it’s paying off — the company’s first two flagships have seen double-digit annual growth.
Sport Chek’s first flagship opened at West Edmonton Mall in early 2014, measuring an impressive 80,000 square feet over two floors. A second flagship opened at suburban Vancouver’s Metropolis at Metrotown in December of 2014, spanning 48,000 square feet.
Last week, two more Sport Chek flagships opened, both in the Greater Toronto Area — at Yorkdale Shopping Centre, and at Square One in Mississauga.
The Yorkdale store spans 45,000 square feet and features 257 Samsung screens, a digital portal entrance, 40 in-store tablets and 200 employees. The 75,000 square foot Square One store features 226 Samsung screens, an event space with two curved LED walls, 46 in-store tablets and 225 employees. Both stores feature a network of digital signage, interactive technology and include next-generation features such as:
Interactive ski, snowboard and golf video walls — providing recommended product suggestions based on the individual customer’s needs and abilities,
An RFID shoe wall, allowing customers to scan shoes and pull up detailed product information
eCommerce screens, leveraging the full functionality of SportChek.ca for an expanded product selection,
3D holograms, showcasing the latest sport tech product and accessories,
Interactive kids’ zones, with games mirroring major team sports aimed at engaging children in-store,
State of the art shop-in-shops, from top brands such as Nike, Under Armour, Adidas and The North Face, offering customers an unparalleled assortment of the latest products,
Community Hub, provides a lounge area where sports enthusiasts can have a seat and connect on community events, product advice, sports games and more, and
Tech Shop, for shoppers to engage with the latest and greatest from the leading sport technology brands such as Fitbit, GoPro and Garmin.
FGL Sports’ Eric Watt explained how Sport Chek’s flagships utilize features tested in its ‘lab’ stores, both located in Toronto — one on Yonge Street north of Eglinton Avenue, and another which recently opened at Maple Leaf Square. The latter also features a first-of-its-kind TSN broadcast studio.
AN INTERACTIVE SCREEN DESIGNED TO HELP CUSTOMERS WITH A GOLF PRODUCT JUST BY POINTING ON BOXES ON THE SCREEN.
Mr. Watt explained that Sport Chek’s next flagship will open in April of 2016 on Vancouver’s Robson Street, spanning 53,000 square feet over three levels. The store replaces a former Chapters book store and according to Mr. Watt, will be flooded by natural light from its ample windows. In July of 2016, Sport Chek will open a 75,000 square foot flagship at Toronto’s CF Sherway Gardens, next to Saks Fifth Avenue, in a retail space formerly occupied by a 225,000 Sears store.
Ultimately, Mr. Watt explained that Sport Chek will look to operate between 10 and 12 flagships in Canada. He then went on to say that the company is ultimately looking to eventually operate approximately five flagships in the Toronto area, four stores in Greater Vancouver, and one flagship location each in Edmonton, Calgary, and possibly Ottawa. Future stores will ideally be located in Canada’s top malls, according to Mr. Watt.
Photos in this article profile Sport Chek’s new Square One flagship, and were supplied by the retailer.
Cushman & Wakefield has just released its 2015/2016 ‘Main Streets Across the World‘ study. It’s the 27th edition of the study which tracks over 500 of the world’s top retail streets, ranking the most expensive locations by their prime rental value. The study ranks six Canadian cities, and also mentions how some luxury brands are choosing malls over streetfront retail spaces.
Overall, the report showed that rents have risen 35% since the last study, despite increasing global uncertainty. New York’s 5th Avenue (between 49 Street and 60 Street) is the most expensive retail street in the world, with per square foot annual rents rising to U.S. $3,500 in 2015. That’s nearly 50% pricier than second place Causeway Bay in Hong Kong. Below is the study’s top 10 ranked most expensive retail locations in each country:
Canada’s top retail rents are lower and in the study, measured in both Canadian and American dollars. Below is a screen shot of the Canadian numbers on page 18 of the study.
Toronto’s Bloor Street West ranked first with rents of $325 per square foot, annually. The street features a mix of luxury retailers and mid-priced chain retailers, ranging from Chanel, Prada and Gucci to H&M, Winners and The Gap. Holt Renfrew‘s Canadian flagship occupies prime frontage at 50 Bloor Street West and Manulife Centre, directly across the street, is set to expand its retail component which is expected to include a 40,000 square foot second level to house an innovative international retail concept. Plenty of movement is at play as developer Sam Mizrahi plans to build ‘The One‘ at One Bloor Street West, featuring a multi-level retail podium topped by a luxury residential tower. Although Chanel will be leaving Bloor Street for nearby Yorkville Avenue in 2017, Prada will more than double its current Bloor Street location and as well, we’ll soon be announcing a new luxury retail tenant confirmed for 100 Bloor Street West.
Vancouver’s Robson Street came in at second place with rents of $210 per square foot, annually. The street is a mixture of mid-priced chain retailers typically found in malls, as well as luxury retailer Salvatore Ferragamo and soon, Paris-based confectionery Ladurée. Nordstrom opened a 230,000 square foot store at the eastern end of the Robson Street strip in September, and Sport Chek will replace a recently shuttered Chapters bookstore across from Nordstrom. Soon, Aritizia will debut an expansion that will see its current location expanded all the way to the Robson and Thurlow Street intersections, also making it Canada’s largest Aritzia store.
Montreal’s Sainte Catherine Street West ranked third at $180 per square foot annually. The street is a mixture of mid-priced retailers and department stores, with its primary retail strip anchored by Ogilvy at the west end and Hudson’s Bay and Maison Birks to the east. Aritzia recently opened one of its largest locations on the street, and H&M’s COS concept opened its second Canadian location in a former Le Chateau space across from Ogilvy. More movement is expected on the street in the coming months, according to sources, and many are waiting in anticipation as Ogilvy is set to expand and merge with Holt Renfrew into a 220,000 mega-store, set to open in 2017.
SAINT CATHERINE STREET WEST, MONTREAL. PHOTO: GOOGLE STREET VIEW SCREEN CAPTURE
Toronto’s Queen Street West ranked fourth with rents of $110 per square foot annually. The street features a mixture of trendy and chain retailers, in a mix of heritage and contemporary buildings. Vancouver-based MEC plans to relocate its downtown Toronto store to Queen Street West and Soho, and retailers continue to show interest in the busy shopping street.
Calgary’s 17th Avenue ranked fifth, with rents of about $50 per square foot annually. The street is a mixture of mid-priced independent and chain retailers and restaurants. Anchoring the centre of the strip is Mount Royal Village, which recently opened West Elm and will soon feature Calgary’s first Urban Fare grocery store. As well, Edmonton-based retailer gravitypope just opened a magnificent flagship on the Calgary street, and we’ll be profiling the store in a separate article.
Edmonton’s Whyte Avenue (82 Avenue) ranked sixth in the study, with rents of $43 per square foot annually. The street features some popular chain retailers (Lululemon, Roots, David’s Tea) and many independent retailers, as well as some popular local restaurants. A new mixed-use development will soon add more retail space on the site of a former gas station, which sat vacant for almost 18 years.
WHYTE AVENUE, EDMONTON. PHOTO: WWW.FLICKR.COM
The Cushman and Wakefield study notes that in Canada, prime streetfront rents were generally unchanged over the year; however, as vacancy rates gradually tighten across most markets, a return to growth is anticipated in the medium term. The study also noted an increasing trend of high-end retailers targeting shopping centres rather than the more traditional high streets, partly facilitated by recent mall renovations that have added new stores, restaurants and other amenities to attract high-end tenants. The study doesn’t mention specific shopping centres, though luxury retailers continue to target malls such as Yorkdale Shopping Centre and CF Sherway Gardens in Toronto, CF Pacific Centre and Oakridge Centre in Vancouver, and CF Chinook Centre in Calgary.
The study also ranked American retail streets, as outlined above. Several U.S. cities boast streets with higher retail rents than Toronto’s Bloor Street West, including Chicago’s North Michigan Avenue (U.S. $525) and East Oak Street (U.S. $340), Beverly Hills’ Rodeo Drive (U.S. $800), Miami’s Lincoln Road (U.S. $325), San Francisco’s Union Square (U.S. $650) and Post Street (U.S. $495), and New York City’s ‘Upper’ Fifth Avenue (U.S. $3,500), ‘Lower’ Fifth Avenue (U.S. $1,000), Madison Avenue (U.S. $1,500) and Soho (U.S. $795).
New details have emerged regarding Saks Fifth Avenue‘s first Canadian locations. Two new luxury boutiques have been revealed, both to be located in what Hudson’s Bay Company CEO Richard Baker recently described as being “the single most luxurious department store in Canada”. Saks’ first Canadian locations are scheduled to open in February, though there will be a delay in opening its food halls.
A recent City of Toronto application, brought by parent company Hudson’s Bay Company on behalf of Saks, indicates that a Louis Vuitton shop-in-store will locate within the new Queen Street Saks at CF Toronto Eaton Centre. This will be Louis Vuitton’s third downtown Toronto location and the fourth for the city. Vuitton’s Toronto stores include a freestanding flagship ‘Maison’ at 150 Bloor Street West, as well as concessions within Holt Renfrew locations at 50 Bloor Street West and at Yorkdale Shopping Centre. It will also be the ninth Vuitton store for all of Canada, joining a freestanding unit in Vancouver and Holt Renfrew-housed Vuitton shop-in-store concessions in Vancouver, Calgary, Edmonton, and at Ogilvy in Montreal.
Recently, Urban Toronto‘s ACT7 found a job posting indicating that pricey timepiece and jewellery brand Piaget is opening a boutique at Saks in Toronto. This will be the first Piaget boutique for Saks Fifth Avenue as well as Piaget’s first Canadian boutique. Priced into the thousands, Piaget watches and jewellery can be found at top Canadian jewellers including Chateau D’Ivoire in Montreal, Royal de Versailles and Raffi Jewellers in Toronto, and at Siba Jewellers in Vancouver. Piaget has five freestanding U.S. locations in Beverly Hills, Costa Mesa CA, Las Vegas, Miami and New York City. It also retails in selected stores and according to Piaget’s website, several Neiman Marcus stores carry the brand, but not Saks.
Piaget has since confirmed intentions to open in Saks, as well as possibly a freestanding Canadian store.
Saks Fifth Avenue President Marc Metrick visited Toronto this week, and spoke to journalists about Saks opening in Canada. He confirmed designers Saint Laurent Paris, Stella McCartney and Givenchy would be carried, and other sources indicate that Saks will feature a roster of designers that will include women’s ready-to-wear by Oscar de la Renta, Lanvin, Emporio Armani, Valentino Carolina Herrara, and others. Most designers are also carried at Holt Renfrew on Bloor Street West in Toronto, while Nordstrom is expected to carry several when it opens at CF Toronto Eaton Centre next September.
Saks Fifth Avenue’s Canadian flagship is scheduled to open on February 18, 2016. The 163,000 square foot store will span four floors in the eastern portion of CF Toronto Eaton Centre’s massive Hudson’s Bay building. The new Saks will feature personal shopping suites in its Fifth Avenue Club on the third floor, as well as a 21,000 square foot basement food hall operated by Pusateri’s Fine Foods. Connected to Pusateri’s will be a three-level, 11,000 square foot food experience operated by Oliver and Bonacini. Pusateri’s opening will be delayed by up to two months, according to sources, as structural issues with the building were recently discovered during construction. We were recently provided plans and renderings, posted below.
Saks Fifth Avenue’s second Canadian location will open on February 25 of 2016 at Toronto’s CF Sherway Gardens. The 150,000 square foot three-level store will also feature an 18,500 square foot Pusateri’s-operated food hall. Sherway’s Saks will locate in part of the mall’s former 225,000 square foot Sears space, with most of the remaining space going to a multi-level flagship Sport Chek store. Below is a floor plan of the food hall and renderings.
Ultimately, Saks Fifth Avenue is expected to open seven or eight Canadian Locations. Mr. Metrick told the Toronto Star that another Saks location is close to a deal and is expected to open in 2017. The company has indicated that Montreal and Vancouver are both target cities for the retailer, and that a Calgary store could also be in the works. Some are already speculating that Mr. Metrick’s comments about a 2017 store opening were referring to a Saks location at Calgary’s CF Chinook Centre, replacing a former 115,000 square foot Target location.
As well, Saks’ discount Saks OFF 5TH will open approximately 25 Canadian locations over the next several years, with its first scheduled to open in the spring of 2016. So far Saks has confirmed OFF 5TH locations in Ottawa, Niagara-on-the-Lake, Vaughan ON and Calgary, and sources say that more locations have been secured, with announcements expected to be made shortly for British Columbia as well as a second Alberta location.
A recent study conducted by the University of Alberta School of Retailing‘s Applied Research department is now available free of charge. The Applied Research group is also available to do customized research, tailored to individual client needs.
The study examined current and proposed grocery store locations in seven Canadian urban centres, as well as mapped out potentially underserved areas which may benefit from new grocery stores. The study specifically analysed high-density inner-city areas in Vancouver, Calgary, Edmonton, Winnipeg, Toronto, Ottawa and Montreal. Existing and proposed grocery stores are mapped with a 500 metre radius trade area, and opportunities for new grocery stores were examined based on a lack of nearby grocery stores, taking into account current and projected populations.
The study found exceptional inner-city grocery store availability in Vancouver, Toronto and Montreal, with less in the other four cities studied. New grocery stores are proposed in all cities’ urban cores, particularly in Calgary, Edmonton and Toronto. All seven Canadian cities have opportunities for new grocery stores, as revealed in the study.
For more information on the University of Alberta School of Retailing Applied Research and to inquire about retaining services, contact Craig Patterson at: clpatter@ualberta.ca or visit its website, www.sorappliedresearch.com.
Upscale French menswear brand Loding plans to open locations Canada-wide over the next several years. Its fourth location is set to open early next year, and strong sales will see the brand expand into new markets.
Loding’s first Canadian location opened in February of 2014 at 133 Avenue Road in Toronto’s Yorkville area. Success at the 1,100 square foot boutique led to a second location opening that October at Toronto’s First Canadian Place. Loding’s third Toronto store opened in late September of this year at CF Sherway Gardens, measuring 665 square feet. Toronto remains Loding’s only North American market for now, though that is expected to change when North American franchisee Yannick Bigourdan (who also owns The Carbon Bar) locates retail space in new markets.
Loding’s fourth Toronto location, measuring about 400 square feet, will open in early 2016 at Toronto’s commuter hub, Union Station. More Canadian locations are expected to follow, according to operations manager Zofia Koch. Ms. Koch explained that Montreal could be next for the brand, particularly given the city’s connection to France. She said that the brand would look to expand into Eastern Canada before expanding westward, as well as into the United States. Ms. Koch also said that Toronto could see one more Loding location, given success at current stores.
Ms. Koch described how Loding’s patina artist, Emmanuel Farre (originally from Toulous, France), has been a popular addition to the Yorkville store. Loding shoes typically cost $330 and for an additional fee, Mr. Farre will customize a patina at the owner’s request.
Founded in Paris in 1998, Loding now boasts over 70 stores worldwide. The brand features men’s shoes, shirts, ties, belts and other accessories, as well as shoe care. The store is unique in how it prices its products: the company doesn’t participate in promotions or sales/discounts, so prices in the store will be the same year-round. The company also practices the idea of ‘one price by type of article’ with all shoes costing $330, shirts $95 and ties for $70, for example.
In Canada and the United States, millennials now make up the largest proportion of the workforce. Their spending power is huge and will continue to grow over the years, as this generation matures. This is exactly why several retailers have made significant investments in tailoring their assortments and marketing to millennials. Here are 3 tips on how to engage millennials online.
#1 FOCUS SOCIAL MEDIA MARKETING ON USER-GENERATED CONTENT (UGC)
Millennials have incorporated social media into their daily lives, spending on average 5.4 hours per day on social networks. In terms of the type of content which engages them, studies have shown that millennials have a stronger preference for user-generated content (UGC)—any form of content created by consumers or end-users—over branded messages. From product reviews to selfies, millennials are posting all kinds of UGC on social media. They want their voices to be heard and look to their peers and other influencers for suggestions on products, brands, lifestyle, and entertainment.
UGC Campaigns
Retailers are finding creative ways to engage consumers with UGC campaigns. Two notable examples include Coca-Cola’s “Share a Coke” and T-Mobile’s “Break-up Letter.” These campaigns encourage “real people” to participate and share content on social media, and have proven to be very effective. Coca-Cola saw a 2% increase in U.S. sales after launching the #shareacoke campaign. T-Mobile reported an addition of 1.3 million monthly subscribers for its first quarter in 2014 after launching the #breakupletter campaign in January. The “social” nature of social networks—and the fact that millennials tend to be heavy social media users—makes these channels the ideal place to launch and promote UGC campaigns.
#2 OPTIMIZE FOR MOBILE AND MAKE PURCHASING EASY
Social media marketing is great for generating awareness and promoting products, but retailers want consumers to come back to their websites where they can further interact with the brand, browse products, and make purchases. So, even if your banner ad or social media update generates a click-through to your website, there is a high chance that your webpage will be abandoned if it is not mobile-friendly.
This is of particular importance when targeting millennials since this group far exceeds its generational counterparts with mobile usage. According toComScore, 21% of U.S. millennials no longer use desktop computers to go online!
Spending Shifts to Mobile
A study by MocoSpace and Social Lens Research found that 35% of millennials surveyed currently purchase products on their mobile devices, and 91% of that group make monthly purchases. The study also revealed that 35% of millennials “would like to buy more on their phone, but it’s too hard to do so.”
As mobile commerce continues to grow, so too does the need for retailers to have mobile-optimized sites and/or apps that are easy to navigate and have a simple check-out procedure. This is especially important for retailers that sell toys and hobby-related products; video games, consoles and accessories; and jewellery and watches. For example, comScore found that 37% of digital purchases in the Toys and Hobbies category were made via mobile devices in Q1 2015.
As a final note, the chart above does not include mobile-influenced in-store purchases, which according to Deloitte Digital, reflected $0.97 trillion in U.S. retail sales in 2014. It is important for retailers to keep in mind that the benefits of mobile optimization go way beyond the idea of just “selling” on mobile. Shoppers are using their mobile devices to research products, search for coupons, and compare prices before, after, and during their in-store shopping trips.
#3 INCORPORATE VIDEO INTO YOUR CONTENT MIX
It’s no secret that video dominates all other content online. According to Cisco, video will account for 80% of all global consumer internet traffic by the year 2019. Research from Animoto confirms that millennials have a strong preference for video content. They find videos helpful for initial research and comparison shopping, and are likely to watch company videos when shopping online.
Based on these findings, a suitable content mix to reach millennials must include video! Retailers Apple and Nike, two of the more popular brands among millennials, use video to engage consumers online.
Facebook 360-degree Video
Facebook recently launched 360-degree videos, which provides an interactive experience by enabling users to view all angles of a scene within a video. While the cost of producing one of these videos is likely to be steep, this type of content could be helpful for marketing experiential store concepts, from pop-up shops to five star tourist destinations.
In summary, retailers of all sizes have found creative ways to reach and engage millennials online. Although opportunities continue to persist across all generations, retailers can’t ignore the growing buying-power of the millennial group. When it comes to reaching millennials online, the key is to know who they are and what they really need and want from retailers, and be forewarned: this generation is not easily fooled by marketing!
Written by: Naomi Turner, Analyst and Marketing Administrative Assistant at J.C. Williams Group. J.C. Williams Group is a well-known, full-service retail and marketing consulting firm. It offers clients practical, creative, and in-depth knowledge of retailing and marketing, including up-to-date know-how and techniques to make retail operations better and more profitable. You can also read their informative blog, Retaileye, here: retaileye.wordpress.com.
Canadian department store retailers are increasingly adding restaurants, coffee shops and other food and beverage/alcohol spaces to their stores. The trend can be good for business, according to one retail expert.
Although restaurants were once common in downtown Canadian department stores, the flight to the suburbs resulted in fewer in-store restaurants in newer mall-based locations. Many of Hudson’s Bay‘s current locations, for example, lack fine dining options, resulting in these stores becoming pure shopping destinations. Although Hudson’s Bay recently introduced some exceptional food options to its downtown flagships, most suburban locations continue to lack prepared food and drink options. Sears Canada is another example of a department store chain without restaurant and café options, instead focusing on selling merchandise and services.
Although Target‘s recently-shuttered Canadian operations featured licensed Starbucks shops-in-stores, many loyal Zellers shoppers lamented at the loss of Zellers’ in-store restaurants. Although lacking glamour, Zellers’ restaurants acted as destination gathering places, particularly for seniors, adding an element of convenience and socialization to Zellers’ stores.
More recently, Canadian department stores are featuring food options. Nordstrom‘s three Canadian stores, for example, all feature excellent dining options as well as in-store coffee shops. Holt Renfrew is adding restaurants to its stores that currently lack such amenities. Quebec City-based La Maison Simons saw the opening of its first restaurant, SoupeSoup at its new CF Galeries d’Anjou store in the summer of 2013, and a second restaurant opened last month in Simons’ new Park Royal store in West Vancouver. Other new Simons stores will feature similar food experiences.
It’s not just department stores that are adding restaurants in Canada. Vancouver-based fashion brand Kit and Ace, for example, recently opened a 3,300 square foot location at 102 Bloor Street West in Toronto, featuring a coffee concept called Sorry Coffee.
Restaurants keep shoppers in stores longer and can even become destinations, according to Antony Karabus, CEO of leading retail consultancy HRC Advisory. He noted that the department store restaurant phenomenon, particularly popular in European department stores, also has roots in North American retailing. Montreal’s flagship Maison Birks, for example, features Birks Café which Mr. Karabus notes has become a popular destination unto itself. Neiman Marcus‘ downtown Dallas flagship also features a popular restaurant, Zodiac, which is often packed during the lunch hour. The introduction of in-store dining experiences is strategic, Mr. Karabus said, as they keep shoppers in stores longer and more often. He described how shoppers linger in Vancouver’s new flagship Nordstrom store, particularly given the popularity of its Bistro Verde fine dining restaurant and Habitant casual lounge. Mr. Karabus described how in-store restaurants can become destinations unto themselves, and that this additional in-store time will often translate into browsing before or after the meal, likely generating increased retail merchandise sales during that or a later visit.
New York City-based athletic wear brand YogaSmoga is looking to enter the Canadian market as it grows rapidly in the United States. The company was founded in 2013 and anticipates sales of $1 billion over the next five to 10 years.
Founded by brother-sister team Rishi and Tapasya Bali, YogaSmoga stocks its own branded products sporting its own fabrics, fabric colours and features, including pill-resistance, shrink- and fade-proof qualities, and the use of eco-friendly procedures. Products are direct–to-consumer, technology-driven, and are designed and manufactured in the United States. It shares the same vertical integration model as companies such as Warby Parker and Everlane. The company focuses equally on men’s and women’s apparel, with pricepoints about $10 per unit higher, on average, than competitor Lululemon.
Co-founder Rishi Bali, a former Goldman Sachs banker, told Women’s Wear Daily that he has sights on Canada as part of YogaSmoga’s rapid worldwide expansion. The company’s first two stores opened last year and it’s on track to have as many as 12 U.S. locations by the end of this year, with sales in excess of U.S. $10 million. Stores are in the 1,200 to 3,000+ square foot range and are located in upscale shopping areas such as Beverly Hills, Fashion Island in Newport Beach, CA and The Mall at Short Hills, NJ. The company features a mix of streetfront and shopping centre units.
Remarkably, the company plans to open 25 locations in 2016 with plans to operate approximately 100 stores by the year 2018. As well, its e-commerce business is booming, having doubled since last year, and now accounts for 25% to 30% of sales.
Farla Efros, President of leading retail consultancy HRC Advisory, said that YogaSmoga’s expansion isn’t surprising, considering how in the United States, sales of women’s activewear soared 21% to $18.5 billion in the year ending June 2015. She said that the athleisure trend doesn’t seem to be showing signs of slowing, and that the yoga pant as taken the market by storm and is now the ‘new black pant’ acceptable for wearing outside of the gym. Ms. Efros noted that the market could become saturated quite quickly as Canada’s population growth slows and new competitors continue to enter the market.
