We’re taking a brief holiday to continue researching Canadian retail. We’ll have new articles up for the morning of Tuesday, August 6th. We’re working on some ground-breaking stories, including:
The expansion of Toronto’s Hazelton Lanes to include luxury retailers,
The potential addition of further luxury retail on Toronto’s Bloor Street,
New additions to Montreal’s retail scene, and
A significant expansion of luxury retail at three Downtown Vancouver locations
These are exciting times for Canadian retail, largely due to American retailers expanding north of the border. Be it budget or luxury, Target or Saks Fifth Avenue, our shopping choices in Canada will be unparallelled to any time in our history.
Have an excellent long weekend, everyone, and thank you for reading Retail Insider.
Dolce & Gabbana Toronto store, 111 Bloor St. W., nearly finished.
Milan-based fashion house Dolce & Gabbana could shutter if tax fraud convictions against its designers aren’t overturned. A Dolce & Gabbana flagship store just opened on Toronto’s Bloor Street, and Dolce & Gabbana shops-in-store are located across Canada at selected Holt Renfrew and Harry Rosen stores.
In June, Dolce & Gabbana’s designers were found guilty of tax evasion and were ordered to pay a fine of about $440 million, as well as serve 20 months in jail. The designers are appealing the verdict.
Last week the designers temporarily closed all of their Milan stores out of “indignation“.
Dolce & Gabbana is one of the top-performing fashion labels for Holt Renfrew, we’ve been told. The label does so well, in fact, that it includes some dedicated shops-in-store within selected Holts stores for men and women. The men’s version of the label is also carried at selected Harry Rosen locations.
Holt Renfrew is taking a page from its sister store Selfridge’s in London. Selfridge’s enormous women’s shoe hall includes shops-in-store for various designers including Chanel, Jimmy Choo, Louboutin, and at the lower end, TopShop.
Yorkdale’s Holt Renfrew is being designed as the prototype store for future Holt Renfrew store expansions and renovations. The Yorkdale Holts recently opened a new 10,000 square foot beauty hall and it will debut an expanded menswear department, accessories area and women’s designer floor. New women’s ready-to-wear boutiques will include the likes of Gucci, Prada, and a major score – a Chanel Boutique.
Rendering – Manolo Blahnik
Given that the Yorkdale Holt Renfrew is being used a prototype, we can expect Holt Renfrew to roll out similar shoe floors and updated departments at Holt Renfrew stores nation-wide.
Jimmy Choo has 27 free-standing American stores, 2 outlet stores and 3 boutiques within Bloomingdale’s stores. It is also carried at Holt Renfrew stores across Canada. Manolo Blahnik has 2 American boutiques and is available at selected Saks Fifth Avenue, Neiman Marcus, Nordstrom and Barneys New York stores in the U.S. It is carried at selected Holt Renfrew and Browns Shoes stores in Canada.
Hudson’s Bay Company CEO Richard Baker says that he expects up to 7 Saks Fifth Avenue stores to open in Canada. He also says he wants them to open quickly. The quickest and most cost effective way to do this would be to open Saks within existing Hudson’s Bay store space.
Despite having possibly paid too much for Saks, Richard Baker is a shrewd businessman who knows real estate. Given this, we expect his vision for a Saks rollout will involve configuring some existing Canadian Hudson’s Bay store space into space for Saks. It remains to be seen how, exactly, this configuration will take place.
Furthermore, it would make less financial sense to build entirely new Saks store space. Hudson’s Bay already has millions of square feet in Canada, some of which it owns outright. It would make more sense to utilize existing underperforming space rather than create new spaces that would be expensive to build and would take time to plan, design and construct.
Recently renovated designer floor at Saks, Manhattan.
Existing Hudson’s Bay stores generally earn less than $200 per square foot. Saks’ Canadian stores could generate triple that amount, or even more, if successful. Utilizing some existing HBC real estate would involve gutting and re-fitting space for which the retailer either pays minimal or no rent. We would be surprised to see many, if any, newly built Saks stores in the short term.
Over the longer term, if Saks is successful in Canada, it could possibly see some newly built, free standing Canadian stores. With competition from Holt Renfrew and Nordstrom, however, we think Saks Fifth Avenue’s Canadian business will be challenged.
We will be regularly analyzing Saks Fifth Avenue’s opening in Canada from various angles, especially in the coming weeks. Please check back regularly, as we’ll also be keeping an ear to the ground to see what management has planned for new Canadian Saks stores.
The Hudson’s Bay Company (HBC) has just purchased American luxury retailer Saks Fifth Avenue. This paves the way for Canadian Saks Fifth Avenue store locations, as well as its discount chain Off 5th to open Canada-wide.
We reported on the three potential Saks buyers, including Hudson’s Bay, Sternlicht and an unknown Middle-Eastern purchaser. With Sternlicht out of the race, only two potential purchasers remained.
Hudson’s Bay may find it difficult to make Saks succeed in Canada. Holt Renfrew achieves substantial sales per square foot. Excluding Saks’ Manhattan and San Francisco flagships, Holt Renfrew stores achieve considerably higher sales per-square-foot than most Saks stores. Not to mention, Holt Renfrew has exclusive distribution agreements with many designers already carried at Saks’ American stores.
Saks’ outlet concept ‘Off 5th‘ is also expected to come to Canada. Off 5th carries both discounted merchandise from Saks’ full-priced stores, as well as products purchased specifically for the outlet store. Off 5th stores will compete with Nordstrom Rack and Holt Renfrew’s recently opened hr2 concept.
Saks’ purchase by HBC will lead to Saks stores opening in Canada, either free-standing or within existing Hudson’s Bay store space. Last month we first reported on HBC’s potential purchase of Saks. We subsequently discussed possible Canadian Saks locations. HBC has been contemplating a potential Saks purchase for months and we’re re-posting our analysis of some possible locations for Saks in Canada.
Newer American Saks Fifth Avenue stores are generally in the 80,000-120,000 square foot range. Hudson’s Bay has 90 Canadian stores. Several are in Saks-worthy locations. Although we’d only expect Toronto, Calgary and Vancouver to get Saks stores, we’ve do a more comprehensive metro-area breakdown of possible full-line or shop-in-store Saks Fifth Avenue locations via HBC.
Greater Toronto Area Yorkville: Hudson’s Bay’s 342,000 square foot store at Toronto’s Yonge and Bloor intersection could be at least partially converted into a flagship Saks Fifth Avenue store. The store’s current low ceilings might be remedied by a demolition and reconfiguration of the interior retail space, though this would certainly be an expensive challenge. A Saks Fifth Avenue store on Toronto’s Bloor Street would compete with neighbouring Holt Renfrew, which will see a substantial expansion in the next few years.
Downtown Toronto: Hudson’s Bay’s 851,000 square foot flagship ‘Queen Street’ store has room for a Saks store, though it would require an awkward reconfiguration of the store’s current setup. We’re not sure if a Saks would be preferable up at the Yorkville Hudson’s Bay while the Queen Street location remains as the primary flagship location for Hudson’s Bay and its related concessions (including a 19,000 square foot TopShop/TopMan and a 20,000 square foot Kleinfeld Bridal, which opens on the store’s seventh floor next year).
Sherway Gardens: The 223,000 square foot Sherway Gardens Hudson’s Bay could see a Saks shop-in-store. A full-sized Saks is less likely because of Hudson’s Bay’s smaller size. Sherway would be a good move for Saks, as competitor Holt Renfrew will exit Sherway when it opens its Mississauga store in 2016. Nordstrom’s 2016 Sherway Gardens arrival will boost the mall’s popularity and Saks will more likely compliment Nordstrom than provide outright competition, given their limited brand cross-over.
Square One Shopping Centre, Mississauga: The 201,000 square foot Hudson’s Bay could see a Saks shop-in-store similar to Sherway Gardens, as discussed above. Despite Square One’s having Target and Walmart as anchors, Saks could actually fit in the mall now that it will include a 120,000 square foot Holt Renfrew store and possibly a branch of La Maison Simons.
Hudson’s Bay, Downtown Calgary
Calgary Downtown Calgary: Downtown Calgary’s 450,000 square foot Hudson’s Bay store could see a subdivision to include a Saks Fifth Avenue store. Downtown Calgary already includes a 147,000 square foot Holt Renfrew store that will soon expand. One major disadvantage to locating within Downtown Calgary’s Hudson’s Bay is the insufficient pedestrian access to the neighbouring Core Shopping Centre that houses Holt’s, Harry Rosen and a substantial number of other retailers. Downtown Calgary’s Hudson’s Bay suffers as a result and won’t see the same renovations, TopShop/TopMan and ‘The Room‘ concepts as seen in Toronto and Vancouver.
Chinook Centre: Hudson’s Bay’s 203,000 square foot Chinook Centre store could possibly see some sort of smaller Saks Fifth Avenue shop-in-store. At its present size and with the inclusion of a soon-to-open 15,000 square foot TopShop store, Chinook Centre’s Bay would be too small for a full-sized Saks. It is possible that a Saks could open as part of Chinook Centre’s newest expansion proposal, though the expansion appears to lack an additional anchor tenant. A bonus to a Chinook Centre Saks, however, would be less competition from the downtown Holt Renfrew store and increased shoppers drawn to the 140,000 square foot Nordstrom store that will open next year.
Vancouver Downtown Vancouver: The 637,000 square foot Hudson’s Bay store in Downtown Vancouver could see a Saks Fifth Avenue store somehow carved out of its existing store space. Vancouver’s Hudson’s Bay has already seen its space reduced with the opening of one of the world’s largest TopShop/TopMan stores as well as the eventual elimination of the entire sub-basement retail space for one or more tenants (likely not Saks, given its low ceilings and awkward location). A Downtown Vancouver Saks would be in close proximity to an existing 137,000 square foot Holt Renfrew and a 230,000 square foot Nordstrom which will open in 2015.
Hudson’s Bay, Rideau Street, Ottawa [Image Source]
Ottawa Rideau Centre: A Saks Shop-in-store (or even a smaller full-line Saks) carved out of the 335,000 square foot Ottawa Rideau Street Hudson’s Bay store would compliment Rideau Centre’s Nordstrom store (which will open in 2015) as well as La Maison Simons, also in 2015. Competitor Holt Renfrew, located way over at 240 Sparks Street in Downtown Ottawa, could see an uncertain future as a result of a Saks opening in Ottawa.
Edmonton Finding a suitable location for Saks in Edmonton might be a challenge, though some sort of Saks shop-in-store might work within Hudson’s Bay’s 237,000 square foot Southgate Shopping Centre store. The West Edmonton Mall Hudson’s Bay, at only 164,000 square feet, would likely be too small for any Saks configuration. Downtown Edmonton’s Holt Renfrew, one of the chain’s lesser-performing stores, could see a reduction in sales with a Saks opening in one of Edmonton’s suburban malls.
Montreal We’ve consulted with a retail analyst who says they’re not sure if Montreal’s economy or language laws would welcome Saks Fifth Avenue to the city at the moment. Downtown Montreal has a 655,000 square foot Hudson’s Bay store that is currently undergoing renovations to include luxury department ‘The Room’.
We’ll keep you updated on HBC’s possible Saks purchase. As we mentioned, an announcement could be made as early as this week.
Readers may be disappointed to learn that Roots has leased the retail space at 89 Bloor St. W. in Toronto. The space had sat vacant since early 2011. We’ve been told that Roots will be vacating their 100 Bloor St. W. retail space.
The narrow retail space at 89 Bloor will be difficult to merchandise for an apparel retailer. 89 Bloor is not even 1,700 square feet, while Root’s current 100 Bloor store is about 15,000 square feet. We’re not sure if the 89 Bloor Roots will be for a limited collection of Roots products, such as childrenswear or accessories.
Thank you, again, to our Toronto Retail Insider ACT7 of Urban Toronto for researching and locating the name of this new tenant.
Yesterday we reported on the rampant speculation regarding what tenant was moving into 89 Bloor. We were informed that talks with Links of London had initially been fruitful but that a lease agreement subsequently was unsuccessful.
Current Roots flagship store at 100 Bloor St. W.
Roots once occupied neighboring retail space 95A Bloor Street West until 2002. The space is now occupied by Victorinox.
We’ll update you when we find who will replace the current Roots flagship store at 100 Bloor Street West.
MAC Cosmetics‘ former space at 89 Bloor Street West, Toronto, has sat empty for over 2 years. It is located on what is arguably Canada’s most upscale retail strip. Speculation has been rampant as to who might lease the space. ACT7 of Urban Toronto has discovered which tenant has finally secured the space, and we’ll announce who the tenant is tomorrow.
The space is narrow and under 1,700 square feet. This poses a challenge for merchandising, especially for a clothing retailer. And in fact, we’ve been informed that the new tenant at 89 Bloor Street will sell clothing.
The vacant retail space has gained plenty of online attention. Jacob Ritka of The Grid (Toronto) wrote on its continued vacancy last year, and it has been discussed at length on the discussion forum at Urban Toronto.
The Toronto Premium Outlets has just released its floorplan and corresponding tenant list. To see the map and retailers closer up, click the images to expand them on your screen. The Outlet mall opens next Wednesday, August 1st. Burberry comes in December.
On the weekend we visited the partially renovated ground floor of Vancouver’s downtown Hudson’s Bay store. Renovations to the north-east part of the store (formerly part of the 2010 Olympic Shop) are nearly complete, and they include vendors such as an Hermès fragrance shop.
This Hermès fragrance shop is different from the one we reported on at Holt Renfrew in Toronto’s Yorkdale Shopping Centre. The Vancouver location doesn’t carry certain fragrance exclusives only available at the Yorkdale concession.
The look of the rest of the renovated Hudson’s Bay space is simple, clean and white. Ceilings are high and smooth, creating a sense of volume. We’ll post more photos when the space is completed.
Further cosmetics vendors will open in the renovated Hudson’s Bay ground floor, including popular cosmetics retailer Bobbi Brown.
Martin Margiela fragrance display. These are temporary until the space is completed.
Hudson’s Bay’s jewelry department is next to be renovated, according to a source at the store.
If you’d like to submit photos of stores in your area, feel free to email them to: insider@retail-insider.com. We can credit you as a source if you like, or we can keep your name anonymous.
The Toronto Premium Outlets are scheduled to open a week from today, on August 1st. We’ve got an update – in December 2013, Burberry will be joining the outlets.
