Ladurée Café under construction at 162 Cumberland Street in Toronto. Photo: Craig Patterson
Upscale French bakery and sweets maker Ladurée will open a café concept on Cumberland Street in downtown Toronto’s Yorkville area in October. It will be the third Ladurée location to open in the city.
Ladurée’s Yorkville location will be at 162 Cumberland Street, in a 751 square foot corner retail space facing both onto Cumberland Street as well as onto the quaint Village of Yorkville Lane. Ladurée replaces Dice Fruit that previously occupied the space. Ladurée’s location is across the laneway from coffee/gelato shop Zaza and across the street from Nespresso and a new Harry Rosen store that will soon begin construction.
The Yorkville Ladurée will include a sit-down café as well as a range of baked goods, and grab-and-go items. The location will also feature patio seating. The indoor area is expected to have 13 seats (table seating and high bar seating combined) and there will be about 12 outdoor seats.
Ladurée Café under construction at 162 Cumberland Street in Toronto. Photo: Craig Patterson
Fresh baked goods will be available, made by a master chef in a pastry laboratory that opened in the summer of 2023 north of the city. Baked goods will include a range of cakes and pastries, as well as sweets such as its famous macarons, chocolates, teas, jams, and accessories. Also included will be savoury and sweet menu items in the café, including sandwiches.
The fresh baked cakes and pastries will be produced fresh daily from scratch by Ladurée’s French-trained Executive Pastry Chef Alexandra Launay. Customers can pre-order baked goods and pick them up at the location, or choose from the daily selection of cakes and other items already in the store. Ladurée’s Canadian licensee Olesya Krakhmalyova said that the same product will be available in Toronto as in major international markets such as Paris, London, and New York City.
A prime corner location: Ladurée Café under construction at 162 Cumberland Street in Toronto. Photo: Craig Patterson
Contractor Elevate Build Inc. is building the Yorkville Ladurée location. The construction company, founded by entrepreneur Paul M. Bélanger, built Ladurée’s other Canadian locations as well as its pastry laboratories in Toronto and Vancouver.
Ladurée Canada worked with Ulf Bergner of Bergner Real Estate Advisors to negotiate the Yorkville lease deal. CBRE’s Urban Retail Team listed the Dice Fruit retail space for lease.
Ladurée’s Ms. Krakhmalyova said, “I have been waiting for the right space and opportunity in Yorkville for sometime. What we envisioned for Yorkville is a chic Ladurée Café.”
Ladurée’s Yorkville café is expected to be busy when it opens. The Cumberland Street location is near the Village of Yorkville Park, a high-traffic pedestrian area that is particularly vibrant during warmer days. The immediate area also boasts a high density of affluent households that support the many upscale businesses in the Yorkville neighbourhood. Ladurée markets itself on having high-quality products, which will resonate with the neighbourhood.
Looking east along Cumberland Street towards the Village of Yorkville Park and the future Harry Rosen flagship store. Photo: Craig PattersonRendering of the new Harry Rosen flagship store at 153 Cumberland Street, opening in the spring of 2026. (Rendering: dkstudio architects inc)
Yorkville is seeing an unprecedented influx of new wealth, with several new condominium projects under construction with average unit prices exceeding $10 million. These new households are part of the current transformation of Yorkville into something rarely seen in North America — a wealthy high-density district that is also home to a high density of luxury stores. Luxury car sightings have become the norm, and top restaurants and salons are scattered throughout the area.
Ladurée at Yorkdale Shopping Centre in Toronto (Image: Ladurée)
LADURÉE, EXCHANGE TOWER LOCATION IN TORONTO. PHOTO: MICHAEL MURAZ
The Toronto locations followed the 2016 opening of Ladurée’s first Canadian storefront at 1141 Robson Street in downtown Vancouver, which spans about 1,100 square feet and has a 23-seat tea salon. There were lineups for weeks after it opened.
The Robson Street Ladurée also has an expanded assortment of cakes and pastries. A pastry laboratory opened just east of the city in the summer of 2018. As with the Toronto pastry laboratory, a French-trained chef works out of the Vancouver kitchen.
1,100 SQUARE FOOT VANCOUVER LADURÉE LOCATION AT 1141 ROBSON STREET
Besides permanent retail locations, Ladurée operates several ‘carriages’ in Canada. They feature a range of macarons and other sweets in large mobile displays that can be moved around the country. Ladurée carriages can be found in shopping centres, airports and hotels, depending on the month and opportunity.
Ladurée Carriage at CF Toronto Eaton Centre (Image: Dustin Fuhs)
Ladurée’s permanent move into Yorkville is part of an ongoing transformation of the area. Luxury brands continue to open stores nearby, and now Cumberland Street itself is seeing increased leasing action with the opening of Ladurée and other businesses such as Harry Rosen’s new flagship store that will open across the street in early 2026. Hazelton Avenue and Scollard Street are also seeing new retail tenants.
Founded in Paris in 1862, Ladurée is best known for its double-decker macarons, selling over 15,000 of them daily. Many Ladurée locations also sell ice cream, sorbets, jams, chocolate and candy, as well as branded accessories. Ladurée was purchased by French business group Groupe Holder in 1993, expanding Ladurée from a handful of locations to dozens of boutiques in 27 countries, including several in the United States. In March 2022 80% of Ladurée was bought by Stephane Courbit through Lov Group. Mélanie Carron became the new managing director, replacing David Holder, the son of the founder of the Holder group.
As a Toronto, Ontario based Canadian lawyer, I advise tenants and landlords in their industrial, retail and office lease drafting and negotiations. This article identifies some of the trends in those sectors that I see in my practice. I also anticipate some possible consequences of those trends on rent and the workings of other lease provisions and provide some concrete suggestions and solutions to incorporate into your lease negotiation. This article is for the commercial real estate leasing professional involved in lease negotiations.
The Ontario commercial real estate leasing market is looking unsettled. It strikes me that several trends will soon test the language and remedies in commercial leases. I suggest that tenants and property owners (“landlords”) need to recalibrate their risk assessments and give these issues greater priority in their lease negotiations. It is time to challenge some of the “standard provisions” in commercial leases, especially regarding allocation of additional rent and the right of a landlord to make physical changes and changes to the character of the centre.
The relevance and possible impact of any trend will also vary by property type, location, size, landlord size and tenant identity and requirements The article leans in favour of tenant strategies when negotiating a lease. A standard lease prepared by a sophisticated landlord already gives the landlord the flexibility it needs.
Also, the office, industrial and retail sectors of the Canadian commercial real estate market are dominated in each case by a relatively small number of property owners, some of whom are dominant in more than one sector. Some have vast resources and, in many cases, are owned by or partnered with Real Estate Investment Trusts and Pension Plans. Microeconomic impacts are muted across large portfolios of these landlords. However, individual properties are generally managed as individual profit centres. Even though the landlord has deep pockets and is not worried, there could be an outsized impact on tenants in a particular centre.
Finally, future interest rates changes, and the direction of inflation will certainly impact businesses and consumers and thereby the severity and direction of these trends.
The office market is the one I see buffeted the most lately and where these trends are most evident. My motivation for this article is partly the recent experience of acting for a tenant and bringing up the possibility of new vacancies in building with the landlord. We asked for protection from increases in additional rent. The response was that there will be no changes to the additional rent clauses by way of limits or exceptions and that it was a waste of time and “it is standard”. Only time will tell.
1. Office Sector
The office leasing market is challenged by:
historically high vacancy rates, the percentages have moved from low single digits to reported availability rates of 20% in older buildings in Toronto since COVID;
historically low utilization rates (reflecting a divergence between a strong economy and job growth on the one hand and space needs on the other);
a flight by major tenants to new buildings with attractive amenities;
high construction costs and renovation costs; and
traffic congestion and a struggling transit system in the GTA.
Office vacancy rates may get worse before they get better when low utilization rates (the office premises is rented but occupied only 60% of the time) catch up to expiring lease terms. How much space will tenants need when renewing their leases?i
As office vacancies rise in most of the office market, landlords will have more trouble selling or refinancing their buildings. A review of the financial pages of various news publications finds stories about banks increasing their provisions for commercial loan losses, including mortgages on office buildings and other commercial real estate, and limiting new loans on some of those assets. It is possible that certain sectors of the commercial real estate market will get sideswiped by stricter loan requirements because of the banks’ much larger exposure in the residential and condominium markets.
2. Industrial Sector
Industrial lease vacancy rates have gone in the opposite direction to the office sector over the past 5 years. Basic rental rates for industrial spaces and warehouses doubled and tripled in the Greater Toronto Area (GTA) and broader Golden Horseshoe area in southern Ontario in the last 5 years while the sector experienced historically low vacancy rates, below 5% in many market segments.
The tenants who have renewed their leases in the last two years have experienced a surprise if not a financial shock. If there is a recession or the imposition of tariffs on Canadian products by the USA in the future, then some small unit industrial tenants in the Golden Horseshoe relying on access to the USA markets for their products could become candidates for default. If that happens, then the historically low vacancy rates in industrial units could turn upward. Whether property values will also drop is a different consideration. It is often the case in the GTA that there are many domestic and international purchasers looking for commercial and retail properties who are not concerned with vacancies. However, banks and financial institutions are concerned with vacancies that reduce net rental income from a mortgaged property.
The big box warehouse and data centre sector is hot and driven by logistics and retailer fulfillment warehouse centres. There have been many new buildings built in the GTA in the last 3 years. My understanding is many of the enormous buildings under construction along the highways in southern Ontario are pre-leased.ii Many of the tenant strategies discussed in this article apply to this market segment as well. Tenants must address unknown, future additional rent factors in their leases. I worked on a long-term warehouse lease for a client. It was a space consisting of several hundred thousand square feet which would utilize the most advanced robotics and environmental and sustainability features. I visited the site during the lease negotiations and took pictures – it was still a cornfield.
Retail rental rates have apparently held up while consumers have continued to spend. Class A malls and specialty malls have enjoyed continued demand for space and Toronto, more than anywhere else in Canada, is still attracting new international retailers. Retail leasing in general has also benefitted from a Canadian market with traditionally lower retail square footage per capita than the USA. iii
However, online sales and a slowing economy could result in new vacancies, transition to non-retail uses, fewer renewals by tenants or tenants who may elect to lease less space.
Canadian traditional retail mall landlords are also facing the challenge of repurposing the space of lost anchor store tenants.iv The landlords continue to show great creativity but may have to redevelop and repurpose large portions of the retail mall property and parking areas for non-retail services, entertainment, and office and residential developments. While big and small landlords create their new visions, existing retail tenants may suffer from the disruption during the transition period, loss of revenue and potentially face rising additional rental rates related to redevelopment costs and fewer retail tenants.
Practical and Legal issues
Landlord standard leases give the landlord broad discretion including:
to unilaterally reallocate the additional rent charges of the centre among the remaining tenants; and
to unilaterally move the tenant to a new premises, add mixed uses, do office conversions, and terminate leases for redevelopment.
The Total Rent Amount is Elusive
I start from the proposition that tenants want certainty in terms of what they pay for rent.
“Rent” consists of the “basic rent” component negotiated as an amount per square foot per annum and an “additional rent” component consisting of the operating costs, utilities, property taxes and other charges which are not assigned a dollar cost in the lease as the basic rent is. Additional rent is estimated and then reconciled after the end of the lease year.
Landlords want certainty that their commercial leases are “net” leases or “triple net” leases, meaning the lease provides that all the additional rent charges incurred by the landlord or the tenant over the term of the lease for the entire centre are paid by the tenants of the centre as additional rent.
Commercial leases have at least a 5- or 10-year perspective and must anticipate the “what-ifs”.
Rising vacancies could result in additional rent charges being reallocated to the tenants who stay! Redevelopment costs and expenses may find their way onto the additional rent ledger. The tenant is interested in the total rent it pays, and vacancies and redevelopment can increase the additional rent component, without limits. I have seen year over year increases of several dollars per square foot.
Some might assume it is enough that the lease provides that the tenant will pays its “proportionate share.” I caution the reader here. One thing I have learned is you cannot assume you know what proportionate share means. Proportionate share means what the lease says it means. It is rarely the simple math you would expect. Proportionate share in net lease terms is most often defined as the allocation of all additional rent costs to the existing tenants, at the landlord’s discretion, so as to cover 100% of the Landlord’s expenditures and costs associated with maintenance, repair, and replacement of the centre.
Tenants need to make sure they understand the definition of proportionate share in the lease and amend it. It is important that it means what they thought it meant when they did their rent projections. Those projections can become unreliable very quickly if the tenant pays for anchor vacancies, low rent deals with major tenants and landlord redevelopment costs. Increased vacancies sound like an opportunity for tenants to negotiate a lower basic rental rate. That is certainly true, but those vacancies also result in fewer tenants to pay the additional rent.
Perhaps landlords will accede to requests for gross up limitations, credits for retroactive tax reassessments and reductions, and the exclusion of capital costs and redevelopment costs from additional rent payable by the tenant. While landlords need to maintain their centres, they also must keep their additional rent costs competitive.
Landlord and agent verbal or promotional statements which “estimate” operating costs and property tax rates for a premises may not be appropriate or reliable going forward. They may rely on outdated assumptions, out of date information, vacancy rates that are not current and tax assumptions that do not consider future improvements. The centre may experience vacancy rates that rise to levels not seen in the past and the landlord may elect (or already have plans) to make significant mixed-use changes and redevelop some or all the centre to deal with the changing demand.
Luxury wing at Toronto’s Yorkdale Shopping Centre, September 2024. Photo: Craig Patterson
Relocations, Conversions and Redevelopment
As for relocations, conversions and redevelopment, tenants need to negotiate minimum periods where their premises location and occupation will not be disturbed, options to terminate and compensation.
As a corollary to the rising vacancies and the pressure on valuation it creates, landlords will push back in the negotiation and seek to maintain flexibility.
Practical solutions for Tenants
Do not accept the statement that a provision is “standard” if you are trying to address your legitimate concerns.
Negotiate both the basic rent and the additional rent at the same time.
Do not accept pure estimates on which you cannot rely. Tenants should ask for proof of estimates using recent historical data that incudes vacancy data, line-item expenses, and copies of tax bills to start.
Tenants should try to cap the increases in operating costs and possibly property taxes at a maximum, non-cumulative percentage, on a year over year basis.
Insist on annual statements from the landlord reconciling the additional rent budgets to the actual costs and taxes incurred. The statement should include enough detail for the tenant to be able to determine if the lease provisions constraining the allocation of additional rent to the tenant have been complied with. Tenants must insist on additional rent transparency when it comes to additional rent at the negotiation stage and throughout the lease term.
If your organization is attracted by amenities the building is offering, then add to your lease the express requirement that the Landlord provide those amenities for the term of the lease, the required standards and work out how much they will cost you in different scenarios.
Retail tenants can also ask for a combination of additional rent caps, detailed annual reconciliation statements and/or a co-tenancy clause. Co-tenancy clauses are based on the principle that a tenant pays the asking basic rental rate for a fully leased retail mall with lots of consumer traffic and pays a lower basic rent for premises in a mall once it suffers a certain level of vacancies. Under such a clause, when vacancies reach a certain level, the basic rent is automatically reduced, the rent is converted to a fixed gross rent, or converted to a gross rent based upon a percentage of sales. In return, the tenant agrees to stay open and avoid making the situation worse for the Landlord and other tenants by closing.
A tenant may add provisions to address a future insolvency of the landlord. How do tenant and subtenant occupation rights work when the bank takes over a property under a non-performing mortgage? Read my earlier article [Landlord Mortgage Defaults: Ensuring Tenants have Security of Tenure, 2021] on the scenarios and strategies for when a tenant might be turned out and the lease cancelled, who the tenant pays the rent to and who maintains the centre.
As a landlord you are concerned with the net effective rent generated from the leases of the property. This number is determined after all costs and expenses associated with tenant inducements are calculated and it is certain by the terms of the lease that additional rent is comprehensive and paid by the tenant. The Landlord is also concerned to be competitive and to keep the good tenants they have.
I prefaced this article with the assumption that the landlord begins the negotiation with a well drafted lease. My first suggestion is for the landlord to maintain the “net” provisions and characteristics of the lease and keep all the leases in the same centre consistent with one another to avoid gaps in expense recovery.
Be upfront about possible future plans for redevelopment and have a plan to address tenant concerns over occupation, disruption of their use, timing, and compensation.
A landlord may also add a requirement that the tenant provide updated financial and other information during the term at regular intervals.
In a market where tenants find it more difficult to pay the rent, due diligence on your tenant is critical. That extends not only to the historical financial covenant shown in the financial statements but also an understanding of the near-term market forces and prospects this tenant is dealing with in its business.
Conclusion
There are several trends that may result in a period of transition in the commercial real estate sectors over the next several years. Landlords and tenants should adjust for a combination of factors such as rising vacancies and landlords repurposing space and redeveloping existing properties. In particular, the well negotiated commercial lease should address those issues from the point of view of how it affects premises operations, character of the centre and each component of the rent.
Tenants should negotiate the basic rent and the additional rent at the same time and should insist on transparency when it comes to additional rent at the negotiation stage and throughout the lease term.
Landlords need to evaluate the tenant covenant based on financial statements and an understanding the economic trends impacting the tenant’s business and prospects.
My purpose is not to presume to see the future or even understand how all the trends may impact these sectors of the commercial real estate market. It is enough to consider the possibilities and ask yourself a couple of questions.
Are any of these scenarios more or less likely than they were in the past?
What impact might they have on the character, use and enjoyment of the premises, the rental cost, or the rental income?
As a tenant or landlord, I suggest your review, update, and reprioritize your issues list for your upcoming lease negotiations to take new account of these trends.
Copyright Dennis Tobin 2024
Dennis Tobin is a partner in Blaney McMurtry’s Corporate Law Practice Group in Toronto. He often speaks and writes on issues of corporate law and commercial and retail leasing. Dennis can be reached at dtobin@blaney.com or 416-596-2897.
People waiting in line at a food bank. Image generated to reflect the article.
Last week, Feed Ontario disclosed that over a million residents in Ontario, Canada’s wealthiest province, sought assistance from food banks over the past year. A million people. That’s essentially Nova Scotia’s entire population as a province.
This revelation presents a stark contrast when juxtaposed with the situation south of the border in the United States. In 2023, while 13.5% of Americans households grappled with food insecurity—characterized by low or very low food security (USDA-ERS, 2024)—the rate in Canada was significantly higher at 22.9% (Proof Toronto, 2024). This suggests that food insecurity in Canada is a staggering 69.6% more prevalent than in the United States—a deeply unsettling statistic.
The challenge of affording food in Canada is exacerbated by anemic food sales, particularly stark when compared to the United States where grocery store sales increased by 1.8% in the last 12 months, according to the Federal Reserve Economic Data. In stark contrast, Canadian grocery store sales have plummeted by a worrying 3.2%, according to Statistics Canada (see graph on retail sales).
One plausible explanation for this disparity lies in the higher interest rates in Canada, which likely impose a heavier burden on Canadian households than on their American counterparts, given that the average debt per household is considerably higher in Canada. The Bank of Canada’s pathway to achieving a more stable inflation rate without detrimentally affecting Canadians appears much narrower than that of the U.S. Federal Reserve, evidenced by the harsh reality of ten consecutive rate hikes last year, compelling Canadians to economize particularly on food expenditures.
It is becoming increasingly apparent that Canada’s per capita economy is contracting, devoid of the wealth creation observed in the United States. Notably, according to World Bank Data, in 2002, the United States’ GDP per capita was 56.6% higher than Canada’s—a record high during the tenure of another Liberal Prime Minister, Jean Chrétien. The current gap, at 53.07%, is perilously close to this historical peak (see GDP Per Capita graph).
The primary drivers of GDP growth in Canada are currently immigration and public spending, with the government undertaking the bulk of economic heavy lifting. The situation is indeed dire. Moreover, the enthusiasm once held for the economic greening championed by the Trudeau administration is showing signs of significant fatigue. The carbon tax, Trudeau’s principal policy for fostering an eco-friendly economy, is increasingly losing traction due to the prevailing economic challenges. Dissenting voices from within the Federal NDP and the BC NDP government now challenge the carbon tax as the optimal path forward.
The failures of the carbon tax are emblematic of a broader trend in recent policymaking endeavours: the implementation of populist policies devoid of rigorous metrics for evaluating their success over time, all while constructing an expansive communications strategy designed to convince Canadians of the policy’s merits. The federal carbon tax is set to escalate to $95 per metric ton by April 2025, marching inexorably towards the 2030 goal of $170 per metric ton. Despite the mounting pressure, the Trudeau government has neglected to assess whether the policy meaningfully impacts our climate and emissions or to evaluate how the policy might influence the economy over time, with a particular focus on the ramifications for the agri-food sector from farmgate to plate.
The design of the rebate system ostensibly allows Canadians to overlook the real costs of this poorly-conceived policy. However, administering this massive program is not only costly but also fails to leverage the Canadian economy effectively. It is imperative to devise policies that genuinely foster both economic and environmental sustainability for the nation.
Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past 24 hours.
Loblaw Companies Limited has initiated a pilot program in Calgary, equipping employees with state-of-the-art body-worn cameras to enhance safety measures.
The move comes in response to a dramatic surge in violent encounters at retail locations across the country, according to the company.
Axon Body Workforce cameras. Image: Axon
Calgary Stores See Enhanced Employee Safety Measures
Loblaw’s decision to implement the pilot program is significant given the company’s expansive presence in Canadian retail. Operating under 22 regional and market-segment banners, including the well-known Loblaws supermarkets, the company’s reach extends beyond groceries. The company has a workforce of approximately 136,000 full-time and part-time employees across its various brands, including Shoppers Drug Mart, No Frills, and Joe Fresh. If successful, the body cam employee safety initiative could be rolled out across Loblaw’s extensive network of stores, impacting tens of thousands of workers.
Axon’s Advanced Technology
Axon Enterprise, the company behind the body cameras being used in Loblaw’s pilot program, is a global leader in connected public safety technologies. Founded in 1993 and headquartered in Scottsdale, Arizona, Axon has a long history of developing advanced solutions for law enforcement and, more recently, expanding into the private sector.
The Axon Body Workforce cameras being deployed in Loblaw stores are part of Axon’s latest generation of body-worn cameras. The devices offer high-definition video recording, wide-angle lenses for a broader field of view, and low-light recording capabilities. And their functionality extends beyond simple video capture.
One of the key features of Axon’s technology is its ability to provide real-time situational awareness. The cameras can livestream footage to a command centre, allowing for immediate response to developing situations. The feature could prove crucial in a retail environment, where rapid response to potential threats is essential.
Moreover, Axon’s cameras are equipped with advanced audio recording capabilities, capturing clear sound even in noisy environments. This can be particularly useful in accurately documenting verbal interactions, which often precede physical confrontations.
Rising Retail Violence: The Catalyst for Technological Solutions
The decision to implement body cameras is not without precedent. A National Retail Federation (NRF) survey revealed a disturbing trend: 67% of retailers reported an increase in aggression and violence in 2023 compared to the previous year.
The impact of this rising violence extends beyond immediate safety concerns. The NRF survey found that in 2023, over 45% of retailers adjusted specific store operating hours. Nearly 30% reduced or altered in-store product selections, while 28% completely closed store locations due to safety concerns.
Toronto-Dominion Bank (TD) has unveiled an e-commerce platform designed to help small businesses establish their online presence. This move marks TD’s entry into a space dominated by Canadian tech giant Shopify Inc.
The new offering, a first for a Canadian bank, is the result of a strategic partnership with BigCommerce, a Nasdaq-listed software company based in Austin, Texas. TD’s foray into e-commerce builds upon its established payment processing services.
The development comes at a time when the lines between traditional banking and digital financial services are increasingly blurred. Tech companies like Shopify, Square (owned by Block Inc.), and Lightspeed Commerce Inc. have been expanding their financial service offerings, collectively lending billions to merchants worldwide in recent years.
The COVID-19 pandemic has accelerated the shift towards online shopping, making e-commerce solutions more crucial than ever for small businesses. TD’s platform aims to address this growing need, providing an integrated solution that combines banking services with online store capabilities.
TD Canada Trust. Photo: Confederation Court Mall
How TD Bank E-commerce Platform Competes in a Crowded Market
The race to become a one-stop-shop for merchants is intensifying, with both financial institutions and digital providers vying for customer loyalty.
TD has expanded beyond its traditional point-of-sale (POS) products to remain competitive. TD says its’ confident in the store-building tools available through its partnership with BigCommerce.
The introduction of TD’s e-commerce platform will inject fresh competition into the market. While Shopify has established itself as a global leader, TD’s entry could potentially reshape the landscape for small business e-commerce solutions in Canada, if it takes off.
Photo: Shutterstock
Implications for the Canadian E-commerce Ecosystem
TD’s move into e-commerce has implications for the Canadian digital economy. By leveraging its existing relationships with small businesses, TD is positioned to offer a seamless integration between banking services and e-commerce functionality.
The integration could provide several advantages for small business owners:
Simplified financial management: With banking and e-commerce tools under one roof, businesses can more easily track cash flow and manage finances.
Potential for preferential rates: TD may offer competitive rates on payment processing or loans to businesses using their e-commerce platform.
Enhanced security: As a major bank, TD brings robust security measures to protect both merchants and customers.
Photo: Shutterstock
The Future of Banking and E-commerce Integration
As small businesses increasingly seek comprehensive digital solutions, TD’s new platform represents a step in bridging the gap between traditional banking services and the evolving needs of modern entrepreneurs. The move diversifies TD’s offerings and provides Canadian small businesses with more options to establish and grow their online presence.
The launch of TD’s e-commerce platform underscores the bank’s commitment to innovation and its recognition of the changing dynamics in the retail and financial services sectors. As the digital economy continues to expand, we’ll watch to see how this new offering impacts the Canadian e-commerce landscape and whether it will prompt other financial institutions to follow suit.
Challenges and Opportunities Ahead
While TD’s entry into the e-commerce space is promising, it’s not without challenges. The bank will need to compete with well-established players who have years of experience in refining their platforms and building loyal customer bases.
Key areas where TD will need to focus include:
User experience: Ensuring its platform is as intuitive and feature-rich as existing solutions.
App ecosystem: Developing a robust marketplace of third-party apps and integrations.
Customer support: Providing top-notch technical support for e-commerce-related issues.
Despite these challenges, TD’s strong brand recognition and existing customer relationships provide a foundation for growth. The bank’s move could potentially spark a new trend of financial institutions offering integrated e-commerce solutions, further blurring the lines between banking and technology sectors.
Lolë, a global clothing brand producing premium athletic wear and outerwear, announced Friday its acquisition of Louis Garneau Sports, a renowned company in the field of cycling and sports equipment with three brands: Garneau, Sugoi and Sombrio.
This strategic acquisition marks an important step in Lolë’s expansion and strengthens its position in the global sportswear market, said the company in a news release.
Todd Steele
“This is an exciting opportunity to partner with a beloved brand that brings its unique perspective to our team. The acquisition will allow us to diversify our product offering and strengthen our commitment to innovation, quality, and performance, providing our customers with an even broader range of sports clothing and equipment,” said Todd Steele, CEO of Lolë.
Louis Garneau Sports was founded in 1983 by Louis Garneau and his wife Monique Arsenault, starting out in his parents’ garage.
The news release said the Quebec company is widely recognized for its expertise in the design of cycling clothing and sports equipment.
“Thanks to this acquisition, Lolë will benefit from the experience and know-how of Louis Garneau Sports to develop new innovative collections and meet the growing needs of sports and outdoor enthusiasts,” it said.
Jean-Marc Jahoo
“We are proud to join a dynamic and well-respected brand like Lolë,” said Jean-Marc Jahoo, CEO of Louis Garneau Sports. “Together, we will continue to innovate and offer high-quality products to athletes and sports enthusiasts around the world.”
The release said no comments will be provided by both parties and the acquisition will be effective immediately. Financial details of the deal were not disclosed.
Lolë is a global brand producing elevated active, athleisure and outerwear versatile and stylish enough to transition from the studio to the street, and everywhere in between. The Canadian-born collection is thoughtfully designed in Montreal with smart consumption in mind, using high-quality materials to last (and look good) season after season. Lolë clothing is available at more than 1,500 retail outlets around the world, in Lolë Ateliers and online at lolelife.com it said.
Louis Garneau Sports describes itself as a leader in the cycling and sports equipment industry. Founded in 1983, the company is recognized for its innovative products, exceptional quality and commitment to performance. Learn more at louisgarneau.com, sugoi.com and sombriocartel.com.
Behind Parmi Lifewear is the duo of visionary female leaders Michèle and Véronik Bastien.
They launched the brand in 2022 based in Mont-Tremblant, Quebec.
“We founded the company with a mission to break the alarming cycle of overconsumption and we wanted to reinvent today’s market which is a market that companies were presenting their products as being specific for one usage,” says Véronik.
Veronik Bastien. Photo courtesy of Parmi Lifewear
“So bike shorts to go riding. Specific T-shirts for running and another type of shirt for hiking. We wanted to simplify this outdoor industry with a selection of premium technical lifewear where people would wear it as much as possible.
“We wanted to make sure we have a positive and sustainable impact in our consumers’ daily lives.”
Most of its products are sold online but it also works with a couple of retailers that distribute their products.
The sisters were born in Montreal and raise in Mont-Tremblant where their company is based, close to the outdoor life.
“This is where we really wanted to make sure that the values of the company really relates to the market in which we were based,” says Véronik.
Michele Bastien. Photo courtesy of Parmi Lifewear
Michèle did her Bachelor’s degree in finance and then a Master’s in communications and marketing as well as having a certification in entrepreneurship from HEC Montreal, a business school.
“I’ve been more in business than in marketing and communications and when I finished university I started to work with a communications agency but more on the strategic team and Véronik and myself we started another company in 2015 which was a women’s cyclewear company and we sold the brand in 2020. It was our first experience in retail. Then we launched Parmi,” says Michèle Bastien, Founder | Strategy & Operations.
“When I went to university, honestly, I had no clue what I was going to do. Véronik for sure was going in marketing. We’re twins. I knew I was going in business but I didn’t know exactly which specification. I finally decided to go into finance because it was more like an overview of the business not specific or related to communication and marketing. Really I had no clue. When I finished university, I passed a few interviews in finance jobs but I knew it wasn’t for me. My eyes were open. I didn’t know exactly what I was going to do.
“But for sure we knew quickly that we were really good to work with each other. We can work really closely but we have separate expertise and being very close to each other, connected 24/7, is a huge advantage.”
Véronik also studied at HEC Montreal specializing in communication and marketing with a Masters degree followed by the entrepreneurship certification. It was the space she wanted to be.
“I saw myself probably working in brands because this is really where I find myself really involved – everything related to brand strategy, building a brand, good foundation, knowing the consumer, knowing how to speak to the consumer. This is really what I loved to do,” says Véronik Bastien, Founder | Brand & Consumer Strategy.
The Bastien Sisters. Photo courtesy of Parmi Lifewear
“When I saw the opportunity for us to launch a company, I knew at first we had no expertise in producing clothing but one thing we knew for sure our objective was to build a strong brand that would last and have a positive impact on our consumer and this is exactly what we’ve done.”
Michèle says when they both initially started working at a communications agency after four or five years in the business she saw that business connection between them and how they could work together.
“Because we’re so close to each other, we trust each other, we can work together 24/7. She can do something, I trust her. I can do something, she trusts me. But we can always look back at the other doing. We have different expertise. For us it was important to be surrounded by other expertise. We like to be together but at the same time it’s always good to have other people with other expertise around us.
“It was not obvious at the beginning but right now of course it’s really great to work together.”
Véronik says the sisters since they were young were always very active. Weekends and summers were spent at Mont-Tremblant. Riding a bike, playing golf, skiing, hiking.
“Everything you can mention here in Mont-Tremblant we’ve done it. That was part of our life. So this is something that is part of us since we were young.”
The Bastien Sisters. Photo courtesy of Parmi Lifewear
Michèle says she likes to focus on strategic growth.
“I like to be surrounded by other people by other talents. For me, opportunity could always be interesting but we need to have best strategic plans I like to follow and to make sure if we’re going that way it’s because there’s a reason and I know there’s a B at the end. Having that vision and make sure that we always go back to that vision to make sure that we reach our objective,” she says.
Véronik says in terms of strategic thinking the twins represent each side of the brain.
“While she’s more focused on numbers and on efficiency, I would describe myself more of an approachable, transparent, honest person more related to the people around us and making sure everybody feels really welcome on the team and I believe the brand image is something that’s pretty important. So making sure that we as leaders our actions and decision are aligned with the business values of the company.”
Outside of work and running a business, Michèle and Véronik both have two girls. It keeps them busy.
They still enjoy the outdoors and it’s important to them to have the balance between running the business and making sure they have free time for their personal lives.
The Bastien Sisters. Photo courtesy of Parmi Lifewear
Giant Tiger Store in Camrose, Alta. (CNW Group/Giant Tiger Stores Limited)
Giant Tiger is set to inaugurate its newest location in Camrose, Alberta, on September 21. The retailer continues to announce new stores in Canada, having grown to over 260 locations across the country.
Strategic Growth Amid Changing Retail Landscape
The new 15,600-square-foot store, situated at 7005 48th Avenue, represents Giant Tiger’s latest effort to penetrate smaller markets often overlooked by larger big-box retailers. Joan Guiriba, the store’s manager, emphasized the company’s commitment to offering affordable merchandise tailored to local needs.
“Our goal is to provide Camrose residents with competitively priced fashion items and household essentials,” Ms. Guiriba stated. “We’re adapting our inventory to meet the specific demands of this community.”
The store’s grand opening, scheduled to commence at 7:30 a.m. with an official ribbon-cutting ceremony, will feature various customer engagement initiatives. These include gift card distributions to early arrivals and family-oriented activities, reflecting Giant Tiger’s community-centric approach to retail.
Camrose, Alberta. Photo: Wikipedia Commons
Community Engagement as a Business Model
In line with its corporate ethos, Giant Tiger has made a $1,000 donation to the Camrose Food Bank via Neighbour Aid, a local non-profit organization. The gesture underscores the company’s strategy of integrating into the fabric of the communities it serves.
The retailer’s expansion model relies heavily on locally operated franchises, a system that allows for greater adaptability to regional market conditions. Store managers are granted significant autonomy in inventory decisions, enabling them to optimize their limited retail space for maximum efficiency.
Interior of new Giant Tiger store on Walkley Road in Ottawa. Photo: Giant Tiger
Evolution of a Canadian Retail Institution
Founded in 1961 by Gordon Reid with an initial investment of $15,000, Giant Tiger has evolved from a single Ottawa store to a national chain with over 260 locations. The company’s growth trajectory, while initially slow, gained momentum with the introduction of its franchise system in 1968.
Mr. Reid’s vision, inspired by American discount stores and the success of Woolworth’s, was to create a Canada-wide network of affordable retail outlets. This ambition has materialized over six decades, with Giant Tiger now employing more than 10,000 individuals across the country.
The company’s ability to thrive in smaller retail spaces has been a key differentiator in its expansion strategy. A sophisticated distribution system, allowing for daily restocking, has enabled Giant Tiger to maintain high inventory turnover rates and respond swiftly to localized consumer demands.
The opening of the Camrose location is indicative of Giant Tiger’s broader strategy to solidify its position in the Canadian discount retail sector. By offering a mix of national brands and private-label products, the company aims to cater to price-conscious consumers in both urban and rural markets across Canada.
Roots at Yorkdale Shopping Centre (Image: Dustin Fuhs)
Roots has released its financial results for the second quarter of fiscal 2024, ended August 3. The report shows challenges and opportunities, with a particular bright spot in the company’s expanding activewear segment.
Despite a challenging consumer environment, Roots CEO Meghan Roach emphasized the company’s strategic pivot towards activewear. “Our second-quarter results demonstrate stable comparable sales and an improvement compared to Q1 2024, alongside growth in product margins and net income,” Roach stated in the earnings call.
Meghan Roach, CEO of Roots. Image Provided by Meghan Roach
The activewear category, which includes leggings, tracksuits, sports bras, and bike shorts, has seen sustained double-digit growth. The success has prompted Roots to position activewear as a core part of its brand identity and future growth strategy.
Financial Performance: A Detailed Look at Q2 2024
Roots reported total sales of $47.7 million for Q2 2024, representing a 3.4% decrease from $49.4 million in the same quarter last year. Despite this overall decline, there were several positive indicators in the financial results.
In the Direct-to-Consumer (DTC) segment, which includes corporate retail stores and e-commerce, sales reached $36.4 million in Q2 2024, down 1.8% from $37.1 million in Q2 2023. However, the comparable sales decline was only 0.2%, showing resilience in Roots’ core markets and representing a significant improvement from the 8.2% decline seen in Q1 2024.
The Partners and Others (P&O) sales, which include wholesale, licensing, and custom products, amounted to $11.3 million in Q2 2024, down from $12.3 million in Q2 2023. This decrease was primarily due to lower sales to Roots’ international operating partner in Taiwan, partially offset by increased royalties from licensing partnerships.
Gross profit for the quarter stood at $26.9 million, slightly down from $27.4 million in the same period last year. However, the gross margin improved to 56.4% in Q2 2024, up from 55.5% in Q2 2023. This 90 basis point improvement in gross margin is a positive sign, indicating better profitability despite lower sales.
Looking specifically at the DTC gross margin, it decreased to 61.7% in Q2 2024 from 62.7% in Q2 2023. While this represents a 100 basis point decrease year-over-year, it’s worth noting that product margin expanded by 230 basis points due to improved product costing and lower discounting.
Net income for the quarter showed a slight improvement, with a loss of $5.2 million or $0.13 per share in Q2 2024, compared to a loss of $5.3 million or $0.13 per share in Q2 2023. The minimal change in net loss, despite lower sales, suggests that cost management efforts are having a positive impact.
Adjusted EBITDA for Q2 2024 was negative $3.1 million, compared to negative $3.0 million in Q2 2023. The minimal change in Adjusted EBITDA indicates that Roots is maintaining operational efficiency despite challenging market conditions.
Roots at CF Toronto Eaton Centre (Image: Dustin Fuhs)
Roots Canada Activewear Expansion: A Strategic Response to Market Trends
The focus on activewear comes at a crucial time for Roots. As consumers increasingly prioritize comfort and versatility, the line between casual wear and athletic apparel continues to blur. Roots’ expansion in this category allows the company to leverage its heritage of comfort while tapping into growing market demand.
Roach elaborated on the appeal of Roots’ activewear: “Our product really resonates with shoppers because you can wear it through multiple different use cases and occasions.” The versatility has led to strong customer loyalty, with shoppers returning repeatedly for core activewear products according to her.
Roach said in a statement, “Our second-quarter results demonstrate stable comparable sales and an improvement compared to Q1 2024, alongside growth in product margins and net income, despite the challenging consumer environment.”
“We were also pleased to see growth during the “back-to-school” period, underscoring the strength of our product portfolio and the effectiveness of our ongoing initiatives in branding, marketing, and enhancing the in-store experience; however, it is early in the quarter.”
Roots at CF Toronto Eaton Centre (Image: Dustin Fuhs)
Operational Challenges and Solutions
While the activewear segment shows promise, Roots faced several operational challenges in Q2 2024. Inventory management was a key focus, with the company reporting inventory levels of $44.0 million at the end of Q2 2024, down 21.3% from $55.9 million in Q2 2023. The significant reduction in inventory levels reflects improved inventory health and more efficient management. However, the company continued to grapple with inventory challenges in its Cooper fleece line.
To address these issues, Roots says it has implemented new technologies, including artificial intelligence for daily inventory replenishments. New AI-powered allocation tools are set to launch in the next quarter, further enhancing the company’s inventory management capabilities.
In addition to inventory management, Roots has been optimizing its store network. The company has been closing select, less profitable stores as part of its ongoing fleet optimization initiative. The strategy aims to consolidate operations and drive same-store sales growth.
Roots is also undergoing changes in its design team. Following the departure of Chief Product Officer Karuna Scheinfeld, the company plans to hire senior-level design talent with international experience in outdoor and activewear sectors. This move aligns with the company’s increased focus on activewear and its ambition to compete more effectively in this growing market segment.
Roots at Brookfield Place in Toronto (Image: Dustin Fuhs)
Financial Position and Liquidity
Roots’ financial position at the end of Q2 2024 showed some improvements. The company’s net debt stood at $40.8 million, a 19.9% improvement from $50.9 million in Q2 2023. The leverage ratio, defined as total net debt to trailing 12-months Adjusted EBITDA, was 2.3x.
In terms of credit facilities, Roots had $44.5 million outstanding, with total liquidity of $62.4 million, including net cash and available borrowing capacity. This liquidity position provides the company with some flexibility as it navigates its strategic shift and the challenging retail environment.
Randy Harris, President and Founder of Trendex North America, said, “The good news for Roots was its results for its Q2 2024 direct-to-consumer segment were better than its disastrous Q1 2024 results. Nevertheless It needs to be noted that its direct-to-consumer sales declined for the eighth quarter in a row.
“Roots needs to determine its optimum inventory level and than consistently maintain it. In addition, it needs to redirect monies allocated for stock buybacks to greater marketing initiatives,” Harris went on to say.
Looking Ahead: Challenges and Opportunities
As Roots navigates the strategic shift towards activewear, it faces several challenges. The activewear market is intensely competitive, with established players like Nike and Adidas, as well as specialized retailers such as Lululemon Athletica Inc., Alo Yoga, and Vuori. The challenging consumer environment may continue to pressure sales and margins, making it crucial for Roots to continue improving operational efficiency, particularly in inventory management and store performance.
However, opportunities also abound. The sustained growth in the activewear category presents significant potential for Roots. The company can leverage its strong Canadian identity and reputation for comfort to differentiate its activewear offerings. With over 100 corporate retail stores in Canada, an e-commerce platform, and international partnerships, Roots has multiple channels to grow its activewear business.
As CFO Leon Wu noted, “We are pleased with the improving sales trends, while also growing product margins and remaining disciplined on costs, resulting in the continued strengthening of our balance sheet.”
