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Innovative ‘No Hidden Retail Markup’ DirectBuy is Revolutionizing Canadian Consumer Spending

*Disclosure: This article is an advertorial which was paid for by DirectBuy.

With absolutely no hidden retail markup paid by its members, DirectBuy is looking to enhance its Canadian operations to support the company’s desire to grow and innovate in 2015. Instead of adding a profit margin to its vast offerings, DirectBuy makes its money primarily through membership fees that give consumers the ability to shop directly from hundreds of manufacturers and their authorized suppliers. DirectBuy is looking to grow its presence in Canada by offering an expanded assortment of products and services, as well as offering exceptional before and after purchase customer service. We spoke with DirectBuy’s CEO Mike Bornhorst. 

“Membership has its privileges” as some say, and in this case DirectBuy can offer substantial savings, especially to those building, renovating and furnishing their homes. Products such as kitchen cabinets, flooring, high-end appliances, TV’s and audio equipment, furniture and mattresses have substantial markups, especially in Canada. As DirectBuy grows in popularity in Canada, it could seriously gain market share from profit margin-reliant competitors.

In order to shop through DirectBuy, members pay an initial membership fee, followed by marginal membership renewal fees thereafter. DirectBuy also has 12 brick-and-mortar locations in Canada, though for convenience sake many members choose to shop online through the company’s e-commerce site, members.directbuy.com. In order to facilitate online sales, we’re told that DirectBuy has significantly increased its customer service offerings, both with making purchases and with after-sales service. A team of decorators and customer service representatives are on hand to assist members with making purchases and post-purchase customer service is also provided.

Last year, DirectBuy surveyed members to improve its business. What it learned is that members wanted more comprehensive customer service. DirectBuy responded by providing a new customer service team that is available during expanded hours and is trained to help members both before and after purchase. This Member Care Advocacy Team, as the company calls it, is supported by a team of product and design experts who work with members to coordinate designing kitchens, picking colours, and putting together living rooms, for example. DirectBuy gets over 80,000 calls per year now, and the company says member feedback is positive.

Members also asked for a more convenient e-commerce website. DirectBuy responded by investing over $1 million in improvements to its website, such as faster speed and enhanced search capabilities. The website also features a built-in algorithm where products offering members the most savings are shown first. Again, because DirectBuy charges a membership fee and doesn’t include hidden retail mark up in its products, it isn’t motivated by margins or volume sales.

DirectBuy is looking to grow its membership presence substantially in Canada, as well as vastly expand its product offerings. It already boasts about 1 million SKU’s (stock keeping units), versus about 75,000 for an average Walmart Supercentre. Currently focused on home-related products in Canada, DirectBuy is looking to expand into travel, home alarm systems, and possibly even apparel and luxury goods. As many of DirectBuy’s members are value-conscious upper-income Canadians, savings on travel and luxury purchases could also be very substantial.

In addition to the low prices members have access to every day, DirectBuy also works with vendors to offer limited-time price reductions called ‘Club Exclusives‘. These Club Exclusives arrive via email multiple times per work and offer specials on items such as big screen TVs, leather furniture, vacuum cleaners and appliances, and many others.

For those unfamiliar, DirectBuy was founded in 1971 in Indiana, and entered the Canadian market in 1996. It sells products for in and around the home to members with no hidden retail markup. 

*Note: This article is an advertorial which was paid for by DirectBuy. 



 

Saks Off 5th to Open in Ottawa

According to the Ottawa Tanger Outlets website, Saks Fifth Avenue Off 5th will anchor the new Ottawa outlet centre. According to staff at Tanger, Saks’ discount store could open as early as this spring. 

Tanger’s website indicates that Saks Off 5th will occupy the mall’s largest space, unit 750. Lease plans provided by RioCan REIT indicate that at least one more anchor space is available, with some speculating that Nordstrom Rack will join Saks in the Ottawa outlet centre in 2017. 

Off 5th is the discount division of luxury department store Saks Fifth Avenue. Off 5th locations are typically in the 20,000 to 35,000 square foot range. According to Hudson’s Bay Company CEO Richard Baker, as many as 25 Off 5th locations could open in Canada over the next several years. 

Saks Fifth Avenue, itself, plans to operate as many as seven Canadian stores. Two Toronto locations are already confirmed: a 150,000 square foot store within Hudson’s Bay at Toronto Eaton Centre, as well as a 130,000 square foot location at Sherway Gardens. Both will feature 25,000 square foot food halls operated by upscale grocer Pusateri’s. 

Hudson’s Bay Company declined to provide comment for this article, or to confirm details of this or other Saks Off 5th store openings. 

Ottawa’s Tanger Outlets opened in October of 2014. The 350,000 square foot centre features about 75 retailers. 

We’ll update you when we learn more on Saks Fifth Avenue Off 5th Canadian store expansion.  

Chapters Books to Close Downtown Vancouver Flagship

Indigo Books & Music Inc. has announced that it is closing its massive Vancouver flagship at 788 Robson Street on June 30th of this year. According to Indigo, a “very significant rent increase made continued profitability untenable“. Indigo says it will open another location in the “same Vancouver trade area” this year, though an exact location has yet to be revealed. 

The store opened in 1998, according to PCI Developments. PCI constructed the flagship at the base of an 89-unit residential building called Infinity. 

Indigo says that it will “temporarily transition the American Girl Specialty Boutique” located within. American Girl’s first Canadian location opened in Vancouver’s Chapters in May of 2014, along with a Toronto location at Indigo at Yorkdale Shopping Centre. 

Indigo’s Chief Executive Officer, Heather Reisman said, “As we gain great momentum with Indigo’s transformation strategy we are continuing to review all elements of our operations. With a very significant rent increase recently at our Chapters Robson store, the new terms are simply untenable for us to stay in that location. An increase of this magnitude would quite simply make this vibrant, profitable store unprofitable. As a result, we are actively pursuing another location to serve the Robson trade area which we fully intend to open in 2015. In other key markets we are also looking at new real estate opportunities for Indigo that will best serve our unique needs.”

Chapters’ Vancouver flagship boasts three levels of retail, including a dramatic entrance with soaring ceilings. The ground floor features a Starbucks shop-in-store, while the second level features an 1,800 square foot licensed American Girl doll shop. The store’s third level features wide open spaces with thousands of square feet. 

This follows the closure of Chapters’ Montreal flagship. Spanning about 35,000 square feet, the Montreal store will be replaced by the world’s second-largest Victoria’s Secret location. 

Chapters’ Vancouver flagship is at the southeast corner of Robson Street and Howe Street, across from the main entrance of Nordstrom‘s 230,000 flagship, scheduled to open this September. 

UPDATE: Business in Vancouver reporter Glen Korstrom confirms that FGL Sports has leased Chapters’ Robson Street space. FGL operates such brands as Sport Check, Atmosphere, Sports Experts and others. Although Mr. Korstrom couldn’t confirm which FGL brand(s) will occupy the Robson Street space, we’re told that the Sport Check and Atmosphere will vacate nearby Pacific Centre for an expansion of the mall’s flagship Holt Renfrew.  

King High Line to Transform Liberty Village [With Video]

King High Line (Image: First Capital Realty)

First Capital Realty plans to transform Toronto’s Liberty Village area with new retail, housing, and office space, as well as an overhead pathway inspired by New York City’s popular The High Line. The Toronto project’s retail component will include space for a large anchor retailer, as well as several smaller retail spaces. Hundreds of residences will be located directly above. Adding value to this project is the King High Line itself, which will provide accessibility for pedestrians and cyclists from Liberty Village to trendy West Queen West. 

The entire Liberty Village area is under transition, and First Capital Realty will be integral to its future. Much like its plans for Yorkville, First Capital Plans to buy up much of the area’s retail, creating a world-class neighbourhood to live, shop and otherwise enjoy. First Capital certainly has a vested interest in the Liberty Village area, as its corporate headquarters is located on-site. 

The video, above, shows the location and functionality of the King High Line connection. Linking trendy West Queen West to Liberty Village, across King Street West and over the Georgetown rail corridor, the King High Line will connect the neighbourhoods of Parkdale, Liberty Village, West Queen West and King Street west with a cycling and pedestrian bridge, as well as expanded community green space. Starting at Liberty Village near Hannah Street, the King High Line will run over King Street, then along the back of the residential/retail development before rising over the rail corridor and descending at Sudbury Street, just east of Abell Street.

The video below provides details of the configuration of King High Line’s retail, as well as an overall view of the new project. In total, about 160,000 square feet of retail will be built, including space for an anchor which could measure up to 80,000 square feet. 

First Capital partnered with Toronto-based homebuilder Urbancorp for the project’s residential component. About 300,000 square feet of residential space, housing between 450 and 500 condominium and rental units, will be built above the project’s retail component. Formerly named Kingsclub Condominiums, the newly-named King High Line development is being designed by TACT Architecture. A selection of units will be large enough for family living, as the developers recognize that some prefer inner-city living over suburban communities with lengthy commutes. 

Besides retail and residential, First Capital will build about 20,000 square feet of new office space in the area. First Capital already owns about 110,000 square feet of office space in Liberty Village, and it seeks to further enhance the area as not only a place to live and shop, but to create a desirable area for companies to do business. In essence, First Capital is setting out to create a comprehensively integrated neighbourhood where one can work, live and play. 

Target Leaving Canada…Totally Predictable!

By J.C. Williams Group: 

Target leaving Canada is no surprise. Their stores were a real flop right out of the gate. Since the chain first opened its doors in March 2013, there were all sorts of basic issues: supply chain and empty shelves, dropping a fashion flyer with no advertised items in the store, summer fashion posters still up in November, etc. Behind this was an organization that was siloed—with marketing, merchandising and operations clearly not communicating and totally out-of-sync.

What has always been an amazing situation is that this phenomenal U.S. chain couldn’t even get Retail 101 right in Canada: in the Target store closest to my neighbourhood, the front and forward merchandise areas were empty and the high-traffic fixtures around the escalators were devoted to dollar store items. Even more astounding was the situation when I went to purchase a pair of jeans on the second floor men’s wear department. I was told that there was “no fitting room and that I would have to go to the lower floor women’s wear department.” What? A men’s wear area without fitting rooms? OMG!

We all hoped for an up-beat, creative, contemporary offering. What we got was a mess.

Unfortunately, they won’t be missed—because they never ever really arrived.

Some key learnings from Target:

  • Get the basics right!
  • Don’t be arrogant!
  • Don’t switch your culture!
  • Be nimble—or else!
  • If you have great resources—use them!
  • Never underestimate a competitor!

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. 

Target to Exit Canada

Target has just announced that it will exit Canada. The company has lost over $2 billion here since it opened its first Canadian stores in March of 2013. Below is the press release which was just released by Target, as well as links to news stories from around the web. 

“We were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021” the press release says. 

Here is our article from last Friday where retail expert Antony Karabus discusses Target’s possible exit. 

Next week we’ll follow up this topic with a discussion of Target’s most valuable Canadian locations, and who might best utilize them. As well, below, are links to articles on the topic from other news sites: 

–Target Corporation Announces Plans to Discontinue Canadian Operations [Newswire Press Release]

–Target Canada files for creditor protection, plans to halt operations [CBC]

–Target to close all 133 stores in Canada [Toronto Star]

–Target Killing Canadian Operations [Globe & Mail]

–Target Corp to exit Canada after racking up billions in losses [Financial Post]

–Target pulling out of Canada after failed expansion [CTV]

–Target pulls plug on Canadian stores [Global]

–Target to Abandon Canada After Racking Up Billions in Losses [Bloomberg]

–Target to discontinue Canada operation, seeks creditor protection [Reuters]

–Target to Exit Canada [Wall Street Journal]

–Target to shutter Canada stores, book a $5.4 billion charge [Fortune]

–Target to Close All Stores in Canada, Conceding a Failed Expansion [New York Times]

–5 Reasons Why Target Failed In Canada [Business Insider]

*[MORE ON TARGET IN OUR JANUARY 16TH DAILY NEWS]*

Target Corporation Announces Plans to Discontinue Canadian Operations

Target Canada takes steps to ensure a fair and orderly exit, seeks Court approval to begin liquidation process under the CCAA

Company provides update on fourth quarter performance in the U.S.

MINNEAPOLIS, Jan. 15, 2015 /CNW/ – Today Target Corporation (NYSE:TGT) (the “Company”) announces that it plans to discontinue operating stores in Canada through its indirect wholly-owned subsidiary, Target Canada Co. (“Target Canada”). As a part of that process, this morning Target Canada filed an application for protection under the Companies’ Creditors Arrangement Act (the “CCAA”) with the Ontario Superior Court of Justice (Commercial List) inToronto (the “Court”).

“When I joined Target, I promised our team and shareholders that I would take a hard look at our business and operations in an effort to improve our performance and transform our company. After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021. Personally, this was a very difficult decision, but it was the right decision for our company. With the full support of Target Corporation’s Board of Directors, we have determined that it is in the best interest of our business and our shareholders to exit the Canadian market and focus on driving growth and building further momentum in our U.S. business,” said Brian Cornell, Target Corporation Chairman and CEO.

Target Canada currently has 133 stores across the country and employs approximately 17,600 people. To ensure fair treatment of Target Canada employees, Target Corporation is seeking the Court’s approval to voluntarily make cash contributions of C$70 million (approximately US$59 million) into an Employee Trust. Upon approval by the Court, the proposed trust would provide that nearly all Target Canada-based employees receive a minimum of 16 weeks of compensation, including wages and benefits coverage for employees who are not required for the full wind-down period. Target Canada stores will remain open during the liquidation process.

As part of its application, Target Canada is seeking the appointment of Alvarez & Marsal Canada as Monitor in the CCAA proceedings to oversee the liquidation and wind-down process for Target Canada and its subsidiaries. Subject to Court approval, Target Corporation has committed to provide a US$175 million debtor-in-possession credit facility to finance Target Canada’s operations during the CCAA proceedings. Target Canada is also seeking Court approval to engage Lazard to advise Target Canada in connection with the sale of its real estate assets.

“The Target Canada team has worked tirelessly to improve the fundamentals, fix operations and build a deeper relationship with our guests. We hoped that these efforts in Canada would lead to a successful holiday season, but we did not see the required step-change in our holiday performance,” said Cornell. “There is no doubt that the next several weeks will be difficult, but we will make every effort to handle our exit in an appropriate and orderly way.”

As a result of the CCAA filing, Target Corporation has determined that Target Canada and its subsidiaries will be deconsolidated from Target Corporation’s financial statements as of the date of the filing.  Target Corporation expects to report approximately $5.4 billion of pre-tax losses on discontinued operations in the fourth quarter of 2014, driven primarily by the write-down of the Corporation’s investment in Target Canada, along with costs associated with exit or disposal activities and quarter-to-date Canadian Segment operating losses prior to today’s filing. Target Corporation expects to report approximately $275 million of pre-tax losses on discontinued operations in fiscal 2015.

Target Corporation’s cash costs to discontinue Canadian operations are expected to be $500 million to $600 million, most of which will occur in the Company’s 2015 fiscal year or later. The Company has sufficient resources to fund these expected costs, including cash on hand and ongoing cash generation by its U.S. business.                                  

Target Corporation expects this decision will increase its earnings in fiscal 2015 and beyond, and increase its cash flow in fiscal 2016 and beyond.

As a result of the decision announced today, Target Corporation will operate as a single segment that includes all U.S. operations. Beginning with the Company’s fourth quarter 2014 financial results, Target will report adjusted earnings per share reflecting operating results from its U.S. operations, excluding discontinued Canadian operations, the impact of the reduction of the beneficial interest asset recognized in connection with the 2013 sale of the Company’s U.S. consumer credit card portfolio, net expenses related to the 2013 data breach, and the resolution of certain tax matters.

Target Corporation plans to provide additional information on the financial implications of this announcement in a Form 8-K to be filed with the Securities and Exchange Commission later today.

Update on expected fourth quarter U.S. performance
Based on performance through November and December, Target Corporation now expects to report fourth quarter 2014 U.S. comparable sales of approximately 3 percent, better than prior guidance of approximately 2 percent, driven primarily by increased traffic and stronger-than-expected digital sales. The Company expects to report fourth quarter adjusted EPS, reflecting results from continuing operations, of $1.43 to $1.47, about 6 cents ahead of expectations for U.S. Segment performance at the beginning of the quarter. 

The Company is not able to provide an estimate of its expected fourth quarter 2014 GAAP EPS. However, GAAP results are expected to include:

  • Losses related to liquidation of Target Canada, as described above, net of taxes
  • Net expenses related to the 2013 data breach, which are not expected to be material
  • Impact of the reduction of the beneficial interest asset recognized in connection with the 2013 sale of the Company’s credit card portfolio, which is expected to reduce GAAP EPS by approximately 2 cents

Cornell and John Mulligan, Target Corporation’s Chief Financial Officer, will host a call with investors today, approximately two hours after the conclusion of the Court hearing of the CCAA application. Target Corporation will issue a press release following the Court hearing and post details for the call on target.com/investors under “Upcoming Events and Presentations.”

Miscellaneous
Statements in this release regarding expected earnings and cash flow and other financial impacts of exiting the Company’s Canadian operations, and fourth quarter 2014 sales and adjusted earnings guidance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements speak only as of the date they are made and are subject to risks and uncertainties which could cause the Company’s actual results to differ materially. The most important risks and uncertainties include those relating to the consequences of discontinuing Canadian operations and the risks described in Item 1A of the Company’s Form 10-K for the fiscal year ended February 1, 2014, as updated in the Company’s Form 10-Q for the quarter ended November 1, 2014.

The adjusted earnings per share expectation for fourth quarter 2014 excludes the items identified above.  The Company’s measure of adjusted earnings per share is not in accordance with, or an alternative for, generally accepted accounting principles in the United States.  The most comparable GAAP measure is diluted earnings per share.  Management believes adjusted EPS is useful in providing period-to-period comparisons of the results of the Company’s U.S. operations.  Adjusted EPS should not be considered in isolation or as a substitute for an analysis of the Company’s results as reported under GAAP.  Other companies may calculate adjusted EPS differently than the Company does, limiting the usefulness of the measure for comparisons with other companies.

About Target
Minneapolis-based Target Corporation (NYSE: TGT) serves guests at 1,934 stores – 1,801 in the United States and 133 in Canada – and at Target.com. Since 1946, Target has given 5 percent of its profit to communities, that giving equals more than $4 million a week. For more information, visit Target.com/Pressroom. For a behind-the-scenes look at Target, visit ABullseyeView.com or follow @TargetNews on Twitter.

SOURCE Target Corporation



 

For further information: Media Contact: Dustee Jenkins (612) 696-3400; Investor Contact: John Hulbert (612) 761-6627

Outlet Malls to Open in Canada in 2015 and Beyond

PHOTO: MCARTHURGLEN DESIGNER OUTLETS.

As Canadian retailing increasingly becomes Americanized, outlet malls continue to be built across the country. In this article we’ll discuss the locations and details of the outlet malls scheduled to open in Canada between now and 2017, as well as briefly discuss some recently opened Canadian outlet centres. 

The following is a description of the outlet malls scheduled to open in Canada this year and into 2017: 

McArthurGlen Designer Outlets, Vancouver: Opening in the spring of 2015, North America’s first McArtherGlen Designer Outlets will be located at Templeton Skytrain Station next to Vancouver International Airport. The mall’s first phase will span 240,000 square feet with 80 retailers, many of them being luxury brands. McArthurGlen representatives say they’ll provide us a list of retailers closer to the mall’s opening date and when they do, we’ll reveal them in a separate article. Eventually, the mall will span 400,000 square feet with about 150 stores, with an unknown completion date. 

RioCan/Tanger Outlets at Calaway Park, Calgary: Originally planned to be 350,000 square feet housing about 80 retailers, the Calgary outlet mall will not proceed, according to a November 2014 article in the Calgary Herald. In the article, it was revealed that RioCan and Tanger have decided against buying the outlet mall’s land, in effect scrapping the entire project. 

Tsawwassen Mills, South Delta, BC: Located south of Vancouver, Ivanhoe Cambridge‘s Tsawwassen Mills will boast 16 anchors and about 1.2 million square feet of retail space. Scheduled to open in the spring of 2016, the mall will feature British Columbia’s first Bass Pro Shops. According to its developer, the mall will feature a mix of premium fashion brands, factory outlets, restaurants, first-to-market retailers, a 1,100 seat food court, and will be modelled on the successful CrossIron Mills in Calgary and Vaughan Mills in Toronto. 

The Outlet Collection at Edmonton International Airport: Scheduled to open in the fall of 2016, Ivanhoe Cambridge is building a 350,000 square foot outlet mall to house about 85 retailers. The enclosed mall (good idea, considering the weather) will be located on 45 acres of land owned by Edmonton International Airport. Given its location, it could attract shoppers from all over Northern Alberta, as well as possibly air travellers. 

The Outlet Collection at Winnipeg: Yet another outlet project developed by Ivanhoe Cambridge, Winnipeg’s outlet mall will measure about 385,000 square feet and feature about 90 retailers. Located on Winnipeg’s southwest side within Seasons at Tuxedo, the Outlet Collection is expected to open some time in 2017. 

These new outlet malls join several malls which have recently opened in Canada. In October of 2014, the 365,000 square foot, 85-store Premium Outlets Montreal opened to enormous crowds. Also in October, the 350,000 square foot, 75-store Ottawa Tanger Outlets opened to the public. May of 2014 saw the opening of the 520,000 square foot, 102-store Outlet Collection at Niagara in Niagara-on-the-Lake, Ontario, competing with an outlet mall in nearby New York State. In August of 2013, the 375,000 square foot, 90-store Toronto Premium Outlets opened with several first-to-Canada retailers. 

Before and After: Yorkdale Creates a Luxury Wing From the Mundane

Yorkdale Leasing Map

Over the past several years, Toronto’s Yorkdale Shopping Centre has created a luxury wing from an area which, less than a decade ago, was fairly nondescript. We’ve located a lease plan of the mall from 2005, showing the mall’s rather pedestrian ‘Holt Renfrew Court’ tenant mix. Fast forward to 2015, where the same area boast Canada’s densest collection of luxury brands. 

AUGUST 2005 YORKDALE LEASE PLAN, VIA OXFORD PROPERTIES.

The 2005 Yorkdale lease plan, above, shows Holt Renfrew Court and the hallway immediately north. Its tenant mix was generally average, featuring retail space for Telus, Black’s, ScotiaBank, Stitches, Suzy Shier, Addition Elle, La Senza and others. The lease plan, below, shows the area’s remarkable new tenant mix. 

NOVEMBER 2014 LEASE PLAN.

The same area is now dedicated primarily to luxury. Tiffany & Co. opened in April of 2009, followed by Burberry and, soon after, luxury retailers were lining up to get into Yorkdale. The mall’s new ‘luxury wing’ boasts retailers such as Jimmy Choo, Moncler, Montblanc, Versace, Ferragamo, Cartier, Mulberry and Bulgari. Adding to this are concessions within an expanded Holt Renfrew for brands such as Prada, Chanel, Gucci, Dior (accessories), and a 4,000 square foot Louis Vuitton – Canada’s third-largest Vuitton location. It’s an impressive transformation, led by the leasing team at Oxford Properties. 

Yorkdale isn’t stopping there. French luxury brand Longchamp will open this spring across from Holt Renfrew, and a number of luxury retailers will join Nordstrom in the mall’s newest wing, scheduled to open in the fall of 2016. We won’t reveal the new retailers in the Nordstrom wing just yet, though we’re providing a lease plan below showing the mall’s newest expansion. 

MAP, ABOVE, SHOWS THE LOCATION OF THE LEASE PLAN, BELOW.

On March 6, 2015, Yorkdale leasing manager Greg Schmidt will be speaking at the University of Alberta School of Retailing Thought Leadership Conference in Edmonton on the topic of mall leasing. For more information and to attend, visit the Thought Leadership Conference website.

Birks Continues Expansion, But With Smaller Stores

Upscale Montreal-based jeweller Maison Birks will spend over $4.5 million this year expanding and renovating its Canadian base of stores, following its recent rebranding. The retailer opened and renovated several new Canadian locations in 2014, with plans to open more locations into 2015 and beyond. Remarkably, the retailer is almost consistently building smaller stores when it replaces previous locations and as a result, some of its largest locations are being replaced by some of its smallest.

Birks has recently opened a number of store locations, including stores in Calgary, Burlington and suburban Montreal. Its Burlington store, located at Mapleview Centre, measures 1,384 square feet while its Brossard store, located in the popular Quartier DIX30, measures 1,690 square feet. Its newest Calgary location, located next to Canada’s first Nordstrom in Chinook Centre, measures 3,660 square feet and replaces a 2,340 square foot location in the same mall. This is the only recent instance where a replacement Birks has been larger than a former location. Downtown Calgary’s Birks recently renovated and added a Rolex shop-in-shop with its own dedicated mall entrance. The downtown Calgary Birks location, however, has been reduced in size from 7,895 square feet to 5,568 square feet, with 2,330 square feet going to Michael Kors. At one time, downtown Calgary’s Birks spanned an impressive two floors. 

In the spring of 2014, Birks also opened a wedding-focused concession adjacent to the new Kleinfeld Bridal on the seventh floor of Hudson’s Bay at Toronto Eaton Centre. 

Maison Birks will continue its Canadian store expansion into 2015. A new location will open in Edmonton, joining recently opened Ottawa and Mississauga stores. Located in West Edmonton Mall, the Edmonton location will measure about 1,400 square feet and will open in the spring of 2015. Birks’ new Ottawa Rideau Centre location, measuring 2,704 square feet, replaced the mall’s 7,250 square foot Birks flagship. A 1,780 square foot Square One unit in Mississauga recently replaced a 3,360 square foot location in that mall.

Aurora Realty Consultants represents Birks across Canada.

It should be noted that some of Birks’ smaller new stores are mono-brand locations primarily carrying Birks-branded jewellery and accessories, as opposed to larger locations (like Calgary’s new Chinook Centre unit) carrying various designers. 

Maison Birks has also recently closed a number of locations. In 2014, the retailer closed locations at Oakville Place in Oakville, Ontario (2,800 square feet), Promenades St-Bruno near Montreal (2,346 square feet) and at Centre Rockland in Montreal (3,020 square feet). In 2013, Birks closed its Hamilton Limeridge Mall unit (2,450 square feet) and its 1,562 square foot location at Richmond Centre in suburban Vancouver. In May of 2012, Birks closed its 4,552 square foot Toronto Eaton Centre flagship, replacing it three months later with a substantially smaller, 1,042 square foot storefront. 

The company also operates a 4,200 square foot unit at downtown Edmonton’s Manulife Place. With a lease expiring in May of 2016, sources say that its future is uncertain. 

Maison Birks, formerly known as Henry Birks & Sons or simply ‘Birks’, underwent a rebranding in 2013, featuring revamped store interiors and a focus on house-brand Canadian diamonds. The retailer continues to carry a variety of other luxury jewellery and watch brands in its stores as well, including brands such as Cartier, Van Cleef & Arpels, Bulgari, Montblanc, Tag Heuer, and others.

Birks at Calgary’s CORE features a Rolex shop-in-store with its own mall entrance. Photo- Craig Patterson. 

Birks currently operates 32 stores in Canada, including 30 Maison Birks stores and two Brinkhaus-branded retail locations in Calgary and Vancouver. Both operate under parent company Birks Group, which also operates 18 jewellery stores under the Mayors nameplate in Florida and Georgia, as well as one free-standing Rolex store in Orlando. The company’s largest store is in Vancouver, spanning an impressive 20,220 square feet in a former bank building. It’s Montreal flagship is second, measuring 19,785 square feet of retail space. The company’s Montreal headquarters is located above, measuring over 58,000 square feet. 

Birks was founded in Montreal in 1879. From 1950 through 1990, Birks aggressively expanded its retail business and by the early 1990s it had approximately 220 stores in Canada and the U.S. After a period of rapid expansion in the 1980s, the company experienced substantial financial losses in the early 1990’s, eventually leading to a 1993 buyout by Italian firm Borgosesia Acquisitions Corporation. In the summer of 2013 the company announced that Birks would change its name to Maison Birks, along with updated storefronts and a focus on Birks-branded diamonds and jewellery. 

Canadians Holiday Shopping Online, 2014: Which Retailers Made The Grade?

By Sally Seston and Vicky Applebaum

It’s a tough job, but somebody has to do it: we went holiday shopping online so that we could report back on which retailers made the Naughty and Nice lists this year. We graded retailers on the following criteria:

  • Click-to-order
  • Consumer communication
  • Delivery

Find out here who made the grade and why!

Zara

Click-to-order: We ordered a single item. This was an order placed on Zara.com from Canada, to be shipped to a U.S. address.  While many American shopping sites won’t allow a cross-border purchase because they require a U.S. billing address, we were able to circumvent this by using PayPal, which had our Canadian address in its files. The website navigation was easy to use and checkout was fast.

Consumer communication: We received notification of shipping the same day, less than eight hours after the order was processed. E-mail communication was prompt and clear, with a simple link to track the package.

Delivery: The order shipped and arrived within five business days.

Final Grade: A

Target

Click-to-order: We ordered a physical gift card. These were very easy to shop on the site, which also carried a very broad selection of designs. This was another order placed from Canada on an American shopping site, paid via PayPal.

Customer communication: It took two business days for Target.com to confirm that the order was shipping, which we found surprising, given the nature of the item we had ordered.

Delivery: The item shipped via USPS standard mail so, tracking was not possible.

Final Grade: B+

Macy’s

Click-to-order: We ordered 3 items.  The online descriptions did not accurately reflect the items.  For example, we ordered what we’d believed to be a wool skirt but received a wool knit instead.  This was not specified in the item description, nor was it clear from the images. Checkout was simple.  We were given the option of a gift box, but there was an extra charge for this.

Customer communication: As soon as the order was processed, we were notified that it would be split into two shipments (although no reason was given). Communication from order through delivery was excellent.

Delivery: The order was split into 2 shipments.  While we had labelled the items as gifts, they still arrived with price labels intact.  Returns can be made in store or by mail.  Return by mail is free (customer needs to take the package to a UPS location).

Final Grade: C

The Children’s Place

Click-to-order: Navigation seemed easy but became difficult when we wanted to add items into our cart.  We chose ‘outfits’ which were shown online as an outfit of 3 or more items, but each item had to be ordered individually.  We had added 2 of the 3 items into our basket when we learned that the 3rd item was 100% out of stock (no sizes at all).  Order processing was smooth and the product arrived promptly. The product definitely matched the online pictures and descriptions.

Customer communication: Overall communication was great and products were described as shown.

Delivery: Returns are easy by mail and can be dropped off at US Postal Service location.

Final Grade: B+

Etsy

Click-to-order: In Canada, we ordered two items. The first item was a custom pet tag. The second order was a plate.

Customer communication: For the first item, we did not receive any direct, personal communication from the vendor, which we found surprising, given the nature of Etsy. While response times for small artisans vary depending on their time zones, most customers will still expect the same level of prompt service that they receive from a large retailer.

Delivery: The first item was shipped by Canada Post and took four days to fulfill and about five business days to ship. The second order was trickier to deliver. The artisan was located just a 20-minute drive away, but on its page, quoted a $25 shipping fee, which was more than half the price of the item. When we contacted the artisan to ask if we could pick up, she instead offered to deliver it for $10 via a driver, and the item was delivered within three days.

For an independent merchant selling larger items on Etsy, shipping charges are clearly going to be the biggest hurdle to overcome since major retailers offer free or nominal shipping. The consumer has to be willing to make the trade-off between hand-made with expensive shipping, and mass-produced but shipped for free.

Final Grade: B

Apple

Click-to-order: We placed an order for two versions of photo calendars which we created in iTunes and ordered within minutes of each other.  The two orders showed as separate orders and there was no way to combine them into one.  There was no visible option to send each calendar to a different address.  As they were purchased as gifts, this would have been a nice option.

Customer communication:  Because photo calendars are a custom product, Apple does not allow returns.  In the past, there have been checks to ensure that you were 100% happy with what you’d created – e.g. Apple notified you if any photos were too low quality.  Since they didn’t offer that this time (and the end result suggests that we might have benefitted from it!), we were stuck with a product that could have been better.

Delivery: Both orders were scheduled for a December 16-18 delivery, but one arrived December 11 and the other was still pending as of December 17.

Final Grade: D

Best Buy

Click-to-order: We ordered an iPad Mini from the Canadian shopping site. We wanted to pick up the item at our local store. When browsing the item, we were told there was inventory in stock at our store, so we placed the order, expecting to be able to pick it up the next day.

Customer communication: The next morning, we received an e-mail notifying us that the order was cancelled because there was no stock in-store, and that we had to place an order online for home delivery if we still wanted it, however, the item was also on backorder online.

Delivery: While they were able to ship the product 3 days later, this didn’t feel like it made up for the initial letdown. Best Buy had set a level of expectation and we feel they had completely dropped the ball.  We had the exact same experience when shopping on the U.S. site for a camera, so Best Buy has some work to do on supply chain visibility.

Final Grade: D

E-commerce has come a long way since its inception and the customer experience has evolved over time. There are higher expectations of retailers now: customers want their goods fast and shipped for free. Hiccups in the process – such as out-of-stock notification after the order has been processed – detract from the experience.

Remember: you can do ten things right, but if you get one thing wrong, the negative impression will always linger for longer.

While it seems very obvious, it doesn’t appear that all retailers have framed the online customer experience around the customer. This points to the importance of rigorous user testing and building every single interaction around the question “What would our customer want?”

Sally Seston is a Director with Retail Category Consultants Inc., where she is involved in a variety of projects to drive sales growth and build loyalty for retail clients.  A seasoned retail executive with over 20 years of experience, she has held several senior leadership positions with major Canadian retailers, having risen through the ranks of the merchant organization.

Prior to joining Retail Category Consultants, she led marketing, business improvement and innovation initiatives for Loblaw Companies Limited.  Her career there started in 1992 when she joined the Category Management Team. She holds a Masters Business Administration (MBA) from the Ivey Business School at the University of Western Ontario and a Bachelor of Science (Honours) in Computer Science from Queen’s University.  A sought after speaker, Sally has presented at many conferences throughout North America. In addition, Sally is a member of the Advisory Board for the Payments Exchange.  With little sleep and much humour, Sally juggles three children and life split between homes in Canada and the US.

Vicky Applebaum is a consultant with Retail Category Consultants Inc. and helps clients develop and implement retail strategy, marketing and innovation projects.  Vicky has over 15 years of progressive retail experience in Canada in multiple disciplines.

Her experience includes advertising and merchandising at Loblaw Companies, and marketing, merchandising and category management with Shoppers Drug Mart.  Her love for all things marketing also led her to work on the agency side and in independent consulting in advertising, event marketing, direct marketing, new product launches and loyalty.Born in Montreal, Quebec, Vicky holds a Bachelor of Commerce (Marketing) from Concordia University.  She and her husband live with their daughter in Richmond Hill, Ontario where they operate a rental moving box business, CityBoxes.ca.