Early next year, Williams-Sonoma and Pottery Barn will exit Toronto’s 100 Bloor Street West. As a result, about 37,000 square feet of new retail space will become available in the heart of Canada’s ‘Mink Mile’. 100 Bloor’s landlord substantially raised its rents, according to sources.
Williams-Sonoma, Pottery Barn, and Pottery Barn Kids have occupied spaces at 100 Bloor Street West since 2001.
Roots Canada, which occupied 100 Bloor’s corner location until January of this year, will be replaced by Holt Renfrew’s first free-standing men’s store. Holt’s new men’s store will open this fall, occupying about 14,000 square feet on two levels.
100 Bloor is arguably ‘ground zero’ for Canada’s toniest luxury strip, with neighbours including Chanel, Dolce & Gabbana, Prada, Gucci, Hermes, Cartier, and others. No word yet on what will replace Williams-Sonoma and Pottery Barn’s retail space, spanning two levels with ample Bloor Street frontage.
According to Leigh Oshirak, Vice President, Public Relations & Marketing Communications of Williams-Sonoma, Inc:
“Pottery Barn, Pottery Barn Kids, and Williams-Sonoma will be vacating 100 Bloor Street West in Toronto in early 2015. The exact date will be determined in the coming months.
In the normal course of our business, we evaluate our real estate strategy and our leases as they come up for renewal and have made the difficult decision to close the Bloor Street stores based on the rising costs of real estate in this area.
We remain committed to growing our Canadian business and will continue to operate stores in Toronto at Sherway Gardens, Yorkdale Shopping Centre, and the Toronto Eaton Centre as well as in British Columbia, Alberta and Quebec.”
Roots has just opened its new flagship store in the former Gap Kids retail space at 80 Bloor Street West in Toronto. The new store is about 6,500 square feet, and replaces its former 14,000 square foot location at 100 Bloor Street West.
Roots’ lease at 80 Bloor Street West will only last for a few years, however. 80 Bloor’s owner plans to eventually demolish the entire building, replacing it with about 37,000 square feet of retail space below a tall residential tower.
The world’s first comprehensive iStore opens next week, on the third level of Montreal’s Centre Rockland. The stunning, 3,000 square foot space is a prototype for future locations, as the retailer plans to eventually open stores across Canada.
Photo: iStore
iStore is a novel digital lifestyle boutique carrying a broad range of digital products from leading tech brands. The comprehensive collections include mobile devices, fashionable cases and accessories, audio goods, entertainment and lifestyle toys and gadgets, health and fitness products and other technologies for a connected home. iStore is also an Apple Authorized Reseller.
The company describes the new store as a “sleek, glamorous setting and wide array of cutting‐edge digital accessories [and a] unique and exciting shopping destination”. Its uncluttered interior features black and white patterned high‐gloss ceramic floors, contrasting with the store’s predominantly white colour scheme. Curved modular Corian tables feature floating trays, where out‐of‐box products are displayed. The colour of its LED exterior and back wall are customizable.
Currently, iStore has 15 small airport-based locations in Canada and the United States. These include Canadian airports in Montreal, Ottawa, Toronto, Vancouver, Edmonton and Calgary. American iStore locations are at airports in Boston, Houston, Indianapolis, New York (JFK) and in Los Angeles. These shops carry only a limited selection, whereas Rockland’s prototype is far more comprehensive.
In 2013, iStore also partnered with Chapters/Indigo in the creation of Indigotech boutiques, which are now featured in 37 store locations across Canada.
“Technology has gone far beyond being a simple tool,” explains Joel Teitelbaum, CEO of iStore Inc. “It is a fashionable form of self-expression and individuality. With so many options available to consumers, our goal was to create a unique, interactive environment that highlights a dynamic and imaginative selection of the latest digital solutions and accessories. At iStore our goal is to entertain, educate and empower our customers to get more out of the mobile devices they own.”
“The digital world and all of its capabilities can sometimes feel overwhelming to customers,” explains Mike Battat, president of iStore Inc. “Our aim is to simplify its complexity, so that our customers can truly maximize their enjoyment of the digital products they use. Our advanced, in-house training ensures that our staff can easily educate and address every question that a customer might have.”
French luxury bakery and sweets maker Ladurée could open Canadian locations, according to sources. The company’s Chairman will visit Canada this fall to assess the market, as the brand expands its store base internationally.
Ladurée’s world famous macarons. Photo: Louis Beche
Founded in Paris in 1862, Ladurée is best known for its double-decker macarons. They’re so popular, in fact, that the company sells over 15,000 of them daily. Many Ladurée locations also sell ice cream, sorbets, jams, chocolate and candy, as well as branded accessories. Some Ladurée locations also serve afternoon tea.
Ladurée was purchased by French business group Groupe Holder in 1993. Ladurée has since expanded from a handful of locations, to dozens of boutiques in 25 countries. The company currently has three American locations, including two in Manhattan and one in Miami. Its first American location opened in August of 2011 on Madison Avenue in New York City, and it recently opened a large tea salon in New York’s Soho area.
Photo: www.lukesanders.com
According to the Bangkok Post, Ladurée chairman David Holder will be assessing Canada, Chile and Mexico this fall for possible Ladurée stores. There were rumours of a location opening in Toronto a couple of years ago, though nothing came to fruition. A Canadian broker, speaking off the record, confirms Ladurées interest in the Canadian market.
Examining the locations of Ladurée’s international locations, we can expect its Canadian stores to be in prestigious areas in its most populous cities. Although this is speculation on our part, Yorkville is our best guess for a Toronto store, as would be Vancouver’s ‘luxury zone’ (between the Hotel Vancouver and the Shangri-La Hotel) and a Montreal location may be between Ogilvy and the Ritz Hotel. Concessions within Holt Renfrew are also possible, given that Ladurée operates in Ireland’s Brown Thomas, owned by Holt’s parent company.
Thank you, Jan Almanzor, for directing us to this article discussing Ladurée’s International expansion.
As Downtown Toronto continues to grow and cater to the demand of its ever-growing population, some exceptional new retail spaces are being created. One remarkable space, located just off the busy intersection of Yonge and Gerrard, will be especially unique. Featuring a restored 1873 heritage façade and two-levels of premium retail space, 401 Yonge Street will boast over 11,600 square feet showcasing soaring ceilings heights, exceptional frontage as well as potential for a rooftop patio.
Measuring a full 50 feet along busy Yonge Street, the building will feature 20-foot ceilings on the ground floor and 14-foot ceilings on the second level. The ground floor will measure 4,679 square feet, while the second level will measure 4,643 square feet. There will also be approximately 2,300 square feet of lower level storage space.
Directly across the street from Canada’s largest hotel, the Eaton Chelsea, and Aura, Canada’s tallest condominium development, 401 Yonge Street is just a short walk from Ryerson University, Yonge-Dundas Square, University of Toronto and the Toronto Eaton Centre which soon will boast flagship locations for both Saks Fifth Avenue and Nordstrom.
With over 70,000 residents living within a kilometre of 401 Yonge Street, this flexible retail space is available in the Spring of 2015. For more information please contact Brandon Gorman or Graham Smith of Ashlar Urban Retailat 416-205-9222.
There have been a significant number of new international retailers coming to Canada. These include brands which are shifting from wholesale distribution and shop-in-shops, to company-operated stores — a trend that is increasingly being adopted by luxury brands. These brands also include newcomers currently in global expansion mode, who see Canada as an attractive and potentially profitable market.
A study by CBRE examined the saturation of 280 global retailers (mass and luxury), and came up with the contents of Table 1.1, to the right. The table yields two revelations: the first, that the United States is not at the very top of the list, and the fact that Spain and Germany seem to be better destinations for global retailers. The second, is that Canada is currently home to only 37% of the 280 global retailers.
The low saturation rate in Canada can actually be seen as a strength, pointing to the immense un-tapped potential of the Canadian retail market, relative to other global destinations. Indeed walking through some of Canada’s malls and shopping destinations, one will quickly be overcome by the countless hoardings, heralding the Opening Soon of a new brand or store.
So why are global retailers increasingly deciding to come to Canada?
There is a great deal of data that goes into a location’s Trade Area Analysis to determine the viability of a location. Zone purchasing power, store saturation measure, net trade adequacy and various geographical considerations (indexes for which Canada scores very high). are all important. There is another factor that is also of absolute importance when making a decision to open a store — rent. Canada’s reasonable rents, compared to other international countries, make Canadian cities highly competitive locations for expansion.
Why is rent important?
Prior to opening a business, retailers look at what their potential costs would be in a given location, and match those costs to projected sales. This is known as doing a ‘break-even analysis’. A store breaks even when gross margin from sales is equal to the fixed costs needed to produce those sales. Forecasting potential sales is purely speculative. Retailers have much more concrete figures when looking at costs. The following scenario works to illustrate this concept. When a brand wants to set up their first store, the inclination is to look at a sizable piece of real estate in a prime retail location. Let’s consider this in a hypothetical situation, focusing on luxury retail.
In this scenario, we will look at 4,000 square foot store on the fashionable Avenue Montaigne in Paris. Rent usually accounts for 10-20% of total sales, and usually is the largest fixed cost of any retail business. The average rent for such a location would be around $1,430 per square foot per year. The rent would therefore be just under $6 million per year. Sales staff cost, for eight people, would be just under $600,000 per year, including miscellaneous fixed costs. The store would therefore have fixed costs in the order of $6.6 million per year. Using a standard gross margin of 50 percent, this store would need sales of roughly $13.2 million a year just to break even. Can a store achieve that level of sales? If not, then it’s back to the drawing board to consider alternatives, such as acquiring a smaller location. There is, therefore, a very potent relationship between sales for a location and the associated rent costs. Setting up retail stores is in fact a trade-off between rental costs and expected sales. Table 1.2, above, looks at North America’s most expensive locations.
What’s special about Canada?
Canada stands to benefit as rents on Canada’s best retail streets are some of the lowest to be found on the global market. Table 1.3, to the right, provides a list of cities with their corresponding rents in dollars per square foot per year. As one may expect, New York and Hong Kong are the most expensive cities in the world to rent retail space. Canadian average rents per square foot range from between $200-$315 in Vancouver (Robson Street) and Toronto (Bloor Street West), or about $200,000-315,000 per annum for a space of 1,000 square feet. By comparison, the same space on New York’s Fifth Avenue would cost upwards of $3 million. This means that, all things being equal, the rental costs per square foot for retail space in New York’s best area is as much as 10 times that of Toronto or Vancouver. Many retailers correlate the rental costs to the average expected sales per square foot. However, recent data in Canadian retail sales seems to point to an opposite conclusion, namely, that Canadian stores not only cost less but also generate strong revenue relative to that cost.
Conclusion
Launching new stores is an expensive endeavour for global brands. The total fixed costs of rents for the top stores can have a huge impact on annual profitability. With more and more brands slated to open in Canada, it appears that Canada holds tremendous potential. There are a number of reasons why Canada is quickly becoming a hot spot for global expansion, a high per capita gross domestic product, purchasing power and Canadians appetite for all things fashionable. All these factors are important and play a role in the decision making process. Canada’s attractive rents, which decrease the fixed costs required to generate potential sales, should be central to any discussions about global brands deciding to call Canada home.
Nima Ghodratpour is an MBA candidate at Queen’s University with over 11 years of Canadian and International Luxury retail experience, working for Clinique, Bloomingdale’s and Boutique 1. Nima can be contacted at linkedin.com/in/nimaghodratpour.
VERSACE HOME DINING SET AND WALLPAPER. PHOTO: DECORATION0.COM
This fall, the world’s first comprehensive Versace Home flagship will open in Vancouver’s historical Gastown area. It will be the Italian luxury brand’s first location to feature its entire home collection, from furniture to fixtures. Versace is confident that it will do well in Canada, as it plans to open multiple locations over the next several years.
According to Versace Home’s website, there are currently only three Versace Home stores in the world, located in Milan, Beirut and Dubai. A number of Versace stores also carry selected items from the Versace Home Collection. Opening a location is Vancouver is a major coup.
Located at 310 West Cordova Street, Versace Home will carry furniture as well as tiles, lighting, bathroom fixtures, bath accessories, porcelain, textiles, fabric, decorative pieces and wallpaper. The Vancouver store is a partnership between Versace and Major Global, according to a source familiar with the new store.
A source at Versace confirms that the store will occupy about 2,000 square feet of retail space, in a building measuring about 3,000 square feet. According to SpaceList, 310 West Cordova was recently for lease. The retail space features 16 to 18 foot ceilings, as well as exposed brick on both side walls. It has access to a courtyard at the rear, and there are four large parking garages within two blocks.
Versace Home replaces consignment store deLuxe Junk, which operated out of the space for over three decades. Founded in the late 1800’s, Gastown was Vancouver’s original downtown core. Although a transitional area for many years, it is fast becoming increasingly upscale, with more higher-end clothing and home furnishings retailers opening shops in the area.
Versace Home replaces consignment store deLuxe Junk, which operated out of the space for over three decades. Founded in the late 1800’s, Gastown was Vancouver’s original downtown core. Although a transitional area for many years, it is fast becoming increasingly upscale, with more higher-end clothing and home furnishings retailers opening shops in the area.
Versace plans to open as many as five Canadian stores within the next several years, according to a source familiar with the company. Versace expects its new Canadian locations to break even within a year of opening, and expects them to be profitable within two years.
Currently, Canada’s only free-standing Versace store is located at Toronto’s Yorkdale Shopping Centre. The 2,800 square foot location opened late last month. Versace’s current Vancouver location, which opened in 1987, is a licensed shop-in-store within multi-brand luxury retailer, Leone.
Vancouver has a history of Versace store locations, besides its current boutique inside of Leone. In 1993, the company opened North America’s first Versus by Versace store, occupying about 2,500 square feet at the southwest corner of Burrard and West Georgia Streets. In 1995, a franchised Istante by Versace store opened at 769 Hornby Street, across from the Vancouver Art Gallery. Both closed several years after opening.
Interestingly, another Italian luxury brand is planning to open its first Canadian home furnishings location. We’ll report on it soon, as we are awaiting further details.
Kate Spade will open its first West Coast store this fall at Park Royal Shopping Centre in West Vancouver. The 2,000 square foot unit will be in the mall’s southern component, called Park Royal South, next to the mall’s new Michael Kors store.
Kate Spade will locate next to the mall’s new Michael Kors store.
Kate Spade plans to open stores Canada-wide, according to a source at the company. Its first location outside of the Toronto area opened this spring at West Edmonton Mall. Spade’s two Toronto stores include a 4,000 square foot unit at 138 Cumberland Street in the Yorkville area, as well as a 1,620 square foot location at Yorkdale Shopping Centre. Yorkdale’s Kate Spade will relocate to a space more than double that size, and we’ll provide further updates shortly. Spade also operates two Canadian outlet stores, at the Toronto Premium Outlets, and the Outlet Collection at Niagara.
West Vancouver’s Park Royal has seen substantial renovations to its southern portion, recently adding retailers such as Brown’s Shoes, Anthropologie, J. Crew, and others. In the fall of 2015, Quebec-based La Maison Simons will open a 105,000 square foot store nearby. According to Park Royal Vice President, Rick Amantea, the north side will also see substantial renovations, including an upscale 45,000 square foot grocery store.
New York City-based Kate Spade is a popular mid-priced designer label that features handbags and accessories, women’s ready-to-wear, footwear, stationery and address books, fragrances, eyewear and a home collection. Given the company’s variety of offerings, it has become referred to as a ‘lifestyle accessories and fashion brand’.
Here is a list of 250+ retail companies in the Canada and the United States, with links to their career pages. The list was compiled by Michael Howard of www.retailresumes.ca.
According to Mr. Howard, the purpose of this list is twofold:
(a) to make it easy for job seekers to find the career pages for retailers they already know they’d like to work for, and, probably more importantly,
(b) to help job-seekers expand their list of retailers they’d like to target.
Retailers, feel free to email Mr. Howard a link to your career page if you’d like to be included on this list.
Michael Howard is a professional resume writer working exclusively with store managers, district managers, regional managers, and other retail leaders from across North America. Visit retailresumes.ca for details or follow him on Twitter.
Ottawa’s new Nordstrom store will compete fiercely for the city’s limited luxury spenders. Scheduled to open in March of 2015, the 157,000 square foot Rideau Centre location will include some of Nordstrom’s priciest departments. Nordstrom will compete with Holt Renfrew and Harry Rosen as a result, as it will with La Maison Simons when it opens in the same mall in 2016. Ottawa is affluent, but its shoppers are conservative. There will be fallout as a result, as each retailer competes in a market not accustomed to buying luxury items.
Sources tell us that Nordstrom’s Ottawa store will feature its top-priced womenswear, footwear, accessories and menswear departments. Its womenswear department, Collectors, features designer closing priced into the thousands by designers such as Oscar de la Renta, Valentino, Dolce & Gabbana, Burberry, Versace, Lanvin, Armani Collezioni, and others. Its top-priced women’s footwear department, Salon Shoes, features designers such as Prada, Jimmy Choo, Manolo Blahnik, Miu Miu, Valentino and Gucci. Designer handbags include the likes of Valentino and Versace, some costing in excess of $2,000 each. Nordstrom’s designer men’s departments showcase designers such as Canali, Moncler, Armani Collezioni, and others. As a result, Nordstrom will bring a heightened luxury experience to the Ottawa market, especially with regards to womenswear, footwear and accessories.
To some, demographics would indicate that Nordstrom, Holt Renfrew and even Saks Fifth Avenue could co-exist in in the Ottawa market. In 2011, Ottawa had the highest median total family income of any Canadian census population area, at $93,440 annually. With a metro population exceeding 1.2 million, Ottawa might appear to be a prime target for retailers such as Saks Fifth Avenue as well as for a flagship location of Holt Renfrew. Although numbers point to Ottawa’s affluence, its local luxury market lags compared to other Canadian cities.
Ottawa’s Holt Renfrew, for example, measures only 36,000 square feet on two floors. It lacks the Chanel, Hermes and Louis Vuitton concessions found in Holt Renfrew’s Calgary store. Calgary is comparable in size and affluence to Ottawa, and yet the Alberta city boasts a well-stocked, productive Holt Renfrew flagship of 147,000 square feet.
Nordstrom will compete with Holt Renfrew for Ottawa’s shopping dollars, and Nordstrom has a distinct advantage. Located in the popular Rideau Centre, Nordstrom will benefit from considerable foot traffic and synergies from the adjacent mall as well as anchors Hudson’s Bay, Harry Rosen and, in 2016, La Maison Simons. Holt Renfrew is rather isolated, located about a kilometre east of Rideau Centre.
Nordstrom will also compete with menswear retailer Harry Rosen, located in the same mall. Harry Rosen carries a wide variety of product and designers, which will further grow with the opening of its 18,000 square foot flagship replacement store, scheduled to open in November. Harry Rosen spends more on staff training than any retailer in the country, and its exceptional customer service and product selection could actually see it outshine Nordstrom’s limited menswear offerings. CEO, Larry Rosen, believes that his store will continue to thrive in the face of increased competition.
Finally, Nordstrom will also compete with a 105,000 square foot La Maison Simons, scheduled to open in August of 2016. Besides carrying its trendy, affordable private-label fashions, Simons’ Ottawa store will also carry a selection of luxury brands. Some of Simons’ designer collections can range into the thousands, by designers including Balmain, Jil Sander, Chloé, Missoni and others.
It will be interesting to watch how Ottawa shoppers will react to this substantial amount of new luxury retail within the next two years. On one hand, some affluent Ottawa residents may become more inclined increase their spending, in light of the increased availability of luxury items. On the other hand, there could be fallout in a market that has warranted only a small Holt Renfrew store. We’ll be watching Canada’s capital city closely to see how this plays out.
