Toronto-based Mastermind Toys continues with its aggressive Canadian expansion and last month, it opened its 40th Canadian location. We spoke with company president Humphrey Kadaner to learn more. 

Mr. Kadaner explained Matermind’s unique real estate strategy, which differs from that of many competitors. Mastermind seeks retail space with exceptional vehicle visibility, ideally in high-traffic areas. As a result, it prefers free-standing retail space or locations in strip plazas, as opposed to locations within shopping centres. Mastermind studies demographics for its site selection, seeking locations in highly-educated, child-populated areas with higher-than-average discretionary income and toy spending. Parking is a necessity and Mastermind has found success locating near good grocery stores. Currently, Mastermind looks to operate stores in the 5,000 square foot range. 

Mr. Kadaner revealed that Mastermind will open 10 or 11 locations this year, with six of those located in Alberta. Its first Grande Prairie, AB location was recently announced, and Mastermind will open three more Edmonton locations as well as one in Calgary. Mastermind will open its first location in Manitoba this year, as well, and will open three more locations in Ontario. 

Longer-term, Mr. Kadaner says that Mastermind is looking to open stores in Saskatchewan, as well as expand operations in the Maritimes.
 
By the end of October, Mastermind will have three stores in British Columbia, 10 stores in Alberta, one store in Manitoba, and 32 stores across Ontario. That will bring its store count to 46, with over 800 employees. This steady expansion represents a four-fold growth over the past four years, with plans to grow to 75 stores by 2018. 

Mr. Kadaner explained how the time is right for Mastermind to expand. Over the past 18 months, about 40 toy stores have closed in Canada. Mastermind is unique and differentiated from many of these in how it focuses on toys with an educational component. As a result, it has resonated well with parents seeking to provide their children with ‘non-screen time’ learning experiences. Furthermore, Mastermind’s product changeover is roughly 30% to 35% each year, meaning there are always new things to experience in store. 

The company was founded in Toronto 1984 by brothers Andy and Jon Levy, who wanted to offer shoppers a classic toy store experience. Its first location measured only 300 square feet, and sold children’s software and home computers. Co-founder Jon Levy says that his store’s curated collection of toys and books differentiates it from mass-market retailers, while offering a greater selection than in independent shops. It carries over 10,000 educational toys, books, games, arts and crafts, puzzles and science kits. The Levy brothers partnered with Birch Hill Equity Partners in 2010, facilitating the company’s national expansion.

Canada will soon be in the remarkable position of having a third of all of Nordstrom‘s downtown flagship locations. In keeping with the trend of global flagships being magnets for tourists, the Seattle-based retailer is in the process of creating six downtown showpieces. We spoke with retail expert Farla Efros, President of leading consulting firm HRC Advisory, to learn why Canada’s top two retail cities were chosen by Nordstrom for such prominent stores. 

Of the six flagship Nordstrom locations, three are existing and are currently being renovated, while three are currently under construction. Renovated locations will see brighter, modern interiors flooded with natural light, as well as new wood and terrazzo floors throughout. New food options will also be available on almost every floor of each store, from small cafes to full-service licensed restaurants. Nordstrom’s President of Stores, Jamie Nordstrom, revealed that the company is inspired by flagships such as Galeries Lafayette in Paris and Selfridges in London, and that the company is spending a fortune to renovate its own stores to reflect international flagship standards. 

In the United States, Nordstrom’s overhauled flagships will include the 383,000 square foot downtown Seattle flagship, the 350,000 square foot Westfield San Francisco Center store, and the 272,000 Michigan Avenue Chicago location at The Shops at Northbridge. All locations feature a variety of luxury brand concessions, with the Chicago store featuring Louis Vuitton and Christian Louboutin shops, for example. Mr. Nordstrom says that the company will spend $80 million to complete renovations of its Seattle flagship, as well as spend similar amounts on the other two stores. 

A further three downtown Nordstrom flagships are currently under construction, two of them in Canada. The Vancouver flagship, located at Pacific Centre, will open on September 18 of this year. The Toronto Eaton Centre flagship will open in the fall of 2016. The Vancouver store will span about 230,000 square feet, while the Toronto flagship will measure about 213,000 square feet. In the United States, a 315,000 square foot seven-level Nordstrom store is currently under construction in Manhattan and after completion, it is expected to be the company’s top-selling location. 

Canada’s thriving downtowns partly explain Nordstrom’s choosing Toronto and Vancouver to house iconic flagships. We spoke with retail expert Farla Efros, President of leading retail consulting firm HRC Advisory, to learn more. Ms. Efros explained that these downtown flagships will serve tourists and locals, as well as downtown ‘wall street’ types who have substantial disposable income. As well, both Canadian cities feature established and productive urban retail centres, similar to the four American cities housing Nordstrom’s downtown flagships. 

Ms. Efros described how Toronto Eaton Centre benefits from its central location. The mall is steps away from attractions, thousands of hotel rooms, and it is easily accessible by subway. The mall hosts millions of visitors annually, including an increasing number of tourists, partly due to the low dollar. Given the substantial foot traffic and the fact that Hudson’s Bay and Saks Fifth Avenue‘s Canadian flagships will be in the same complex, it only makes sense that Nordstrom would create its own downtown Toronto showpiece. Furthermore, downtown Toronto is home to over 215,000 residents, many whom are young, educated, ambitious and fashion conscious. 

Ms. Efros also described the benefits of Nordstrom’s Pacific Centre location. The mall hosts some of the biggest names in fashion, as well as top-performing Holt Renfrew and Hudson’s Bay locations. Vancouver continues to see very strong tourist numbers from around the world and especially the Pacific Rim, and Pacific Centre is ‘ground zero’ for many of these shoppers. Downtown Vancouver has over 100,000 residents, some with relatively high discretionary incomes. As well, Vancouver is known to have a substantial number of wealthy people, including those with second homes in the city who visit regularly. Nordstrom may have also chosen Vancouver for a flagship, given its relatively short distance from Nordstrom’s Seattle headquarters.

Premium British lingerie brand Agent Provocateur‘s new diffusion line, L’Agent by Agent Provocateur, has opened its fourth location in the world in Montreal. Currently, its three other stores are in London, New York City and Los Angeles. 

Located on the second level of Montreal’s Ogilvy department store, L’Agent is designed in collaboration with sisters Penélope and Mónica Cruz. Prices are lower than the Agent Provocateur mainline collection, and the diffusion line is described as “playful, fresh and sophisticated with a provocative edge”. 

The L’Agent line launched in August of 2013 and features seasonal collections as well as a ‘classics collection’ featuring lingerie, accessories, nightwear and swimwear. 

Agent Provocateur is considered to be a luxury lingerie company. It was founded in 1994 by the son of British fashion designer Vivienne Westwood. 

In September, Agent Provocateur’s Canadian flagship opened in The Colonnade at 131 Bloor Street West in Toronto. The 1,260 square foot store neighbours luxury brands including Escada, Cartier, Prada, Mulberry and Chanel. Agent Provocateur also operates concessions within five Holt Renfrew stores. 

Montreal’s Ogilvy will be overhauled as it merges with nearby Holt Renfrew. The expanded 220,000 square foot Ogilvy/Holt’s will feature a luxury hotel and multi-million condos above. the $400 million project is expected to be completed by the end of 2017.

Canadian Retail News From Around The Web: May 27, 2015