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.
The Well, a massive mixed-use development in downtown Toronto, may well be the most ambitious mixed-used project of its kind in Canada – a bold reflection of Toronto’s energy and diversity, and an extension of the urban vibrancy of King West.
It is also part of the RioCan Real Estate Investment Trust’s strategy of transforming some of its properties into vibrant communities with a strong residential component to go along with commercial real estate space.
John Ballantyne
John Ballantyne, Chief Operating Officer of RioCan REIT, described The Well as a “choreographed mix of urban experiences, dynamic architecture and interconnected public spaces. Thoughtful and purposeful design underpins everything it achieves. With a pedestrian-centered focus, The Well responds to some of the strongest desires of downtown Toronto today: walkability, community-building, and the ability to create connections while seamlessly blending old and new.
“We are building residential components to a lot of our properties and the buildings we put up are actually very nice buildings . . . All the buildings we build are high end. They’ve got beautiful amenities but to me the best amenity of all those buildings it’s the convenient centre that’s operating all around them. It really gives the residents (the opportunity) to live, some of them work, play, eat and shop, do all that without really leaving the property. The Well is going to be the ultimate example of that.”
The Well in Toronto (Image: Dustin Fuhs)The Well in Toronto (Image: Dustin Fuhs)
Bordering Front, Spadina, and Wellington, The Well is a mixture of retail, commercial and residential spaces in downtown Toronto that will draw approximately 22,000 daily visitors.
The design includes 320,000 square feet of retail and food service and 1.2 million square feet of office space. It has 1,700 residential residences spread throughout six rentals (three) and condominium buildings (three), plus one office building connected to a three-level retail base and parking for 1,650 cars and 1,900 bikes.
Wellington Market will be Toronto’s newest go-to location for market-fresh artisan food, culinary exploration and experiences. The market will feature a 22,000-square-foot purpose-built venue and an activation space for events, concerts and more. The entire market is liquor licensed for a 3,400 person capacity
Ballantyne said the site will be enhanced by dynamic, community-based programming that will draw people to The Well year-round for unique experiences. The Well is set to become one of Toronto’s most vibrant destinations – a hub for culture, dining, shopping, working and living.
A celebration is planned in the fourth quarter of this year to officially open the site.
Retail leasing for The Well is handled by Josh Katz, Assistant Vice President of Leasing, RioCan Real Estate Investment Trust and Alex Edmison, Senior Vice President, CBRE.
The Well in Toronto (Image: Dustin Fuhs)The Well in Toronto (Image: Dustin Fuhs)
The project is nearing substantial completion. The office component, in 42 storeys, has been open for just over a year. Access is now being provided to the three-level retail component. The Bank of Montreal is currently open.
Ballantyne said many of the retailers are in possession of their spaces right now and getting them ready for openings.
“They’re going to open throughout the summer and fall,” he said. “The idea is that we are going to have a bit of a party later in the year and we expect a good component of the retail to be open at that point in time.”
Future adidas at The Well (Image: Dustin Fuhs)Future Retailers at The Well (Image: Dustin Fuhs)
He said the project is about 84 per cent leased for retail with another six per cent in the final stages of negotiation.
“We feel by the time we’ll have our party later in the year we’re gunning for about 80 per cent of those retailers to be open and operating,” said Ballantyne. “There’s 76 retail units and then there’s another 57 units in our food hall which we call the Wellington Market. In total, there’s about 130 retail concepts going in there including all the food.”
The Well in Toronto (Image: Dustin Fuhs)The Well in Toronto (Image: Dustin Fuhs)
Two of the residential rental buildings with 330 units are now open, have occupancy and are being leased. The condo buildings, owned by Tridel, are for the most part sold out with about 760 units with all of them taking occupancy throughout the remainder of this year.
“The largest of the towers which is owned by RioCan and Woodbourne, is 590 units and that’s going to start taking occupancy in August,” said Ballantyne.
“We’ve built a sense of place.”
He said that part of downtown Toronto doesn’t have a lot of service-oriented tenants but the project will provide that for not only the residents of The Well but also for the people living throughout the core around the project.
Ballantyne said a variety of six restaurants are coming to the development in a combination of the Concorde Group and Oliver and Bonacini.
“This was a very unique opportunity. It was eight acres in downtown Toronto. RioCan is more of a retail player. However, this was really an exercise in city building and building a sense of place,” he said. “And we had to put something here that both justified the location and provided the required residential density that this city needs.
“We also wanted to make sure that it was serviced by retail that fit in properly to the neighbourhood.”
The Well in Toronto (Image: Dustin Fuhs)
RioCan has about 35 million square feet of commercial retail located predominantly in the major markets in Canada, close to transit, in high population areas. The REIT identified that cities need more residential space and it identified different components of its portfolio where it could develop multi-family residential properties.
For RioCan, The Well is an example of its ambitious plans for many of its properties across Canada. It has a development pipeline of 42 million square feet which includes two million square feet underway, two million square feet shovel ready and 10 million square feet that is zoned.
RioCan introduced its residential brand, RioCan Living, in 2018 to deliver best-in-class, purpose-built rental units and condos along Canada’s most prominent transit corridors. They range from rental apartments to ultra-luxury condos.
Ballantyne said RioCan has 12 towers across its portfolio ranging in size from smaller ones like a 60-unit tower in downtown Toronto to larger ones like the 590-unit tower at The Well. With the opening of The Well, RioCan will have about 3,000 residential units in operation.
“We’ve created a division of RioCan called RioCan Living which designs, identifies the sites where we want to put these towers, builds the proper tower for the site and area they’re located in,” he said. “So amenities will change, suite sizes will change, esthetics of the building will change depending on where they are.
“We’ll build them and we’ll operate these residential towers in conjunction with our retail sites that surround them.
“It’s a great opportunity for RioCan to intensify sites, help solve the housing crisis that’s going on in this country and at the same time provide residents with the services that already exist in RioCan shopping centres around them.
“The beauty of our model is that we’re not sitting on land that’s not productive. All of these sites are commercial retail sites. They all have active revenue coming through them.”
The Well in Toronto (Image: Dustin Fuhs)
As of May 10, eight of the 10 RioCan Living buildings were stabilized and were 96.5 per cent leased. Lease-up at the two remaining buildings is tracking ahead of expectations as leasing velocity continues to be robust. Total Net Operating Income generated from its residential rental operations for the First Quarter was $4.3 million, an increase of $1.9 million or 81.7 per cent over the same period last year.
Pre-leasing of the 592 rental residential units at FourFifty The Well started in March in anticipation of the phased completion in the second half of 2023 through to early 2024.
As of March 31, 2,575 condominium and townhouse units are under construction and are expected to generate combined sales revenue of over $860 million between 2023 and 2026 that can be redeployed to fund its development pipeline. Of RioCan’s six active condominium construction projects, 86 per cent of the total units have been pre-sold, representing 96 per cent of pro-forma revenues.
“Urban mixed-use development projects are central to our long-term development plans. We have numerous projects underway that combine residential, commercial, and/or office space. We also create entire communities on vacant or underdeveloped land in growing suburban markets,” says RioCan on its website.
“Our portfolio includes well-positioned properties with significant redevelopment potential. We are focused on optimizing the value of these existing properties through redevelopment and intensification, while also diversifying our portfolio into residential real estate.”
Indigo at CF Toronto Eaton Centre (Image: Dustin Fuhs)
Canadian retail sales continue on a path of minimal growth in May 2023 with All Stores in January growing 1.9% YOY and All stores Less Automotive, Food, Pharmacies up only 0.9% YOY as discretionary spend remains low.
Categories that continue to perform above most others are Clothing Stores, up 7.1% YOY and Shoe Stores, up 9.5% YOY, with the overarching category of Clothing and Accessories Stores still up 11.6% YTD. This growth remains strong and got the JCWG thinking about how these categories are performing over 2019. To our delight, what we found is they are nearly reaching the levels of All Stores (up 23.2% YTD over 2019):
Clothing Stores are up 19.4% YTD over 2019,
Shoe Stores are up 16.2% YTD over 2019, and
Jewellery, Luggage and Leather Goods Stores are up 19.1% YTD over 2019.
For a category that plummeted -80% YOY in April 2020 and did not reach positive growth again until July 2021, this category has shown impressive performance and lockdown recovery. Motor Vehicle and Parts Dealers experienced growth of 9.9% YOY in May, beating out their YTD sales of 7.3%. The JCWG team does not see this as sustainable over the rest of the year, as we are beginning to see reports of EVs piling up on dealer lots. Though brands like Tesla are still beating their supply predictions, it seems that demand has not quite met up, regardless of pay cuts. Consumers just aren’t able to buy cars when their costs of living keep increasing, and so do the financing/leasing rates of a new vehicle due to rate hikes. We predict that these sales will begin to dip soon, regardless of lower prices and increased competition that continue to flood the market.
Loblaw at Riocan Empress (Image: Dustin Fuhs)
Housing remains top of mind for Canadians, especially in larger cities like Toronto and Vancouver, as rental rates continue to rise along with mortgage rates. As such, categories associated with housing are all declining as a sign of the times:
Furniture Stores are down -10.2% YOY,
Home Furnishings Stores are down -4.6% YOY, and
Building Material and Garden Equipment are down -7.4% YOY.
As the price to rent/own a home continues to increase over the rate of wages, these categories will likely continue to suffer. The more people are needing to spend on housing, the less they will have to be able to spend on furniture, gardening, etc. for the home.
It’s almost the end of July, meaning we are about to head into back-to-school! As we rapidly approach this season, we are thinking about:
Will parents be able to purchase back-to-school related products as they did in previous years with the increased cost of housing and groceries?
When will students start their purchasing this year? Will this follow the trend of Black Friday and Boxing Day sales moving further and further ahead?
What channels are most appealing to parents and children as they prepare their lists?
Will Toronto and Vancouver (down -0.3% and -0.2% YTD) stop feeling the brunt of the retail sales decreases?
How are YOU preparing for increases in back-to-school traffic?
Canadian Retail Sales by Product Category, Same Month ComparisonCanadian Retail Sales by Store Category, Year to Date ComparisonRetail Trade, Canada, All Stores, by Geographic RegionsCanadian Ecommerce Sales
According to Conagra Brands Canada research, Canadians are getting more adventurous in the kitchen.
The research shows that Canadians are testing out new textures, elevated cooking experiences and most notably foods with global influence.
Canadians are experimenting with cooking and this is having an impact on the grocery industry throughout the country.
When cooking at home, research indicated that 52 per cent of Canadians incorporated new sauces into their meals, with the top category leader being Asian-themed sauces.
Also, Canadians are increasingly mixing pleasure with at-home cooking and are regularly looking for new and fun recipes to try. Nearly half of Canadian consumers claim to enjoy cooking new dishes, with more than one-third of consumers cooking new recipes than the year prior.
And 56 per cent of Canadians are seeking out bolder flavours when cooking at home, with many turning towards new/elevated sauces to satisfy cravings.
In this video interview, Paul Hogan, VP and General Manager of Conagra Brands Canada, discusses the trend, why it’s happening and the impact this has on grocery stores and supermarkets in Canada.
The Video Interview Series by Retail Insider is available on YouTube.
Connect with Mario Toneguzzi, a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and the only Canadian – to learn how you can tell your story, share your message and amplify it to a wide audience. He is Senior News Editor with Retail Insider and owner of Mario Toneguzzi Communications Inc. and can be reached at mdtoneguzzi@gmail.com.
Also check out the other series offered by Retail Insider, including The Weekly podcast and The Interview Series, which are both available on Apple Podcasts, Stitcher, TuneIn, Google Podcasts, or through our dedicated RSS feed for Simplecast and other podcast players.
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 3 days.
West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.
Vancouver always made for a sensible choice for Monos to launch its first bricks and mortar store. The city is where the upscale travel and lifestyle brand got its start as an ecommerce retailer.
Monos launched its online store in 2019, offering premium suitcases, bags, and accessories. After a successful test pop-up in Toronto late in 2022, Monos recently opened the first permanent location on West 4th Ave in Vancouver’s Kitsilano neighbourhood.
Choosing West 4th for its first shop shouldn’t come as a surprise, says the company, as well as other local retail experts and stakeholders who suggest West 4th is emerging not only as one of Vancouver’s top retail districts, but also one of the most successful, unique shopping streets in all of the country.
Monos on West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.Monos on West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.
“Vancouver has a special place in our hearts,” said Hubert Chan, Monos co-founder and chief creative officer. The company was born here and so was he, Chan told Retail Insider in an interview.
Hubert Chan – Monos co-founder and chief creative officer.
“Vancouver’s retail scene is really thriving (and) West 4th has sort of emerged as a premier shopping destination not just in the city, but you know, in the country. We’re just really proud to be a part of that.”
The new shop opened July 7 at 2131 West 4th. It’s a 1,900-square-foot space the company says is “intentionally designed to transport guests through a customer journey using key design aspects”.
Through the floor-to-ceiling glass exterior, guests will see a grand archway, leading them to a space to explore Monos’ colour collection, core pieces and travel accessories. The brand planning to open additional stores outside of B.C. within the next several years.
Adidas Terrex on West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.
Monos is not the only exciting new retailer to choose West 4th to launch a store, said Martin Moriarty, senior vice-president investments, with Marcus & Millichap in Vancouver.
Martin Moriarty
“We did the Adidas Terrex deal, “Moriarty told Retail Insider, referring to the hiking and trail running and outdoor apparel spinoff brand of the German sports giant. “This was their first (store) in North America. They hand selected West 4th…as their first market to go into in North America. That’s pretty incredible.”
Moriarty said Vancouver’s top shopping experience has long been associated with Robson Street in the downtown core. Indeed, Cushman and Wakefield listed Robson as the 14th most expensive place to lease retail space in the Americas in the firm’s 2022 Main Streets Across the World report.
But times, clientele and shopping patterns are changing and West 4th has emerged as one of the most attractive districts for land owners, brands and customers, Moriarty said. “Part of the success of it is the fact that it has a little of everything… We could spend the whole day there.”
West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.John Fluevog Shoes on West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.
Compact district with a little of everything, near the beach
A compact shopping district of roughly four-six blocks, and just a short walk to Kits beach, West 4th has a convenient blend of coffee shops, restaurants, salons, fitness and wellness businesses, mixed with local, national and international fashion and athletic apparel retailers that makes it one of a kind in the country, Moriarty said.
It’s bright, pedestrian-friendly and pleasant. Among Monos’ high-profile neighbours are Lululemon, Patagonia, Reigning Champ and Mejuri.
Moriarty said shoppers should expect more announcements soon by other new or leading retailers setting up shop in the neighbourhood, although he declined to get specific due to private negotiations.
Lululemon on West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.Patagonia on West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.Reigning Champ on West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.Mejuri on West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.
“We are seeing tenants that blow my mind a little bit, reach out to us and say, ‘we want to be in Vancouver’, and ‘we want to be on West 4th’,” Moriarty said. “Historically, it was always ‘we want to be downtown’.”
There’s room for both shopping districts, but many of the ‘digital native’ retailers seeking a younger demographic are preoccupied with West 4th.
Chan from Monos is also noticing a “shift in power” from Robson St. and the downtown upscale market to West 4th. “It’s really become the place to be… not just as an established brand, but for new and emerging brands as well,” he said. The street has become “perhaps the most iconic and quintessential Vancouver neighborhood” mixing affluent older shoppers with young spenders that flock to the beaches, bars and restaurants in the area.
Chan adds Aesop and Allbirds to the list of neighbours that are helping to create a critical mass in the area. Having “hometown hero” Lululemon also helps, he added.
Aesop on West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.Allbirds on West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.
Arc’teryx has deep roots on West 4th
Another hometown hero that has long had a presence of West 4th is outdoor gear and apparel maker Arc-teryx, which opened its first Kitsilano retail store on West 4th in 2013. It relocated to a 4,500-square-foot new location on the same street last November.
Delaney Schweitzer. Photo: LinkedIn
“West 4th is an iconic retail location for Vancouver, with an amazing community presence,” said Delaney Schweitzer, chief commercial officer with Arc-teryx. “Arc’teryx is deeply rooted in the B.C. Coast Mountains, with our headquarters located just over the water in North Vancouver, and we’ve always had a strong connection with Kitsilano’s outdoor community.”
Arc’teryx’s Kitsilano store was their third brand store in all of North America. “When we outgrew our original Kitsilano store, we couldn’t imagine a better location to open our very first pinnacle store than West 4th: our original Vancouver home.”
There’s something unique about the mix of West 4th retailers and shoppers, Schweitzer said. “The local community is welcoming, passionate about the outdoors and loyal to the brands they love. The area itself is incredibly walkable, with a wide array of retail locations interspersed with great restaurants, coffee shops and fitness studios, so we see a lot of foot traffic in our store. From our West 4th location, you’re just a few blocks from the beach and a great view of the North Shore mountains, so it’s the perfect location to plan your next adventure in the great outdoors.”
Arc’Teryx on West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.Arc’Teryx on West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.
More demand means higher lease rates
More attention and more business means landlords are receiving a premium from their retail tenants in the area. Moriarty estimates rents are up 50%-60% over the past five years and 10%-15% in just the last 12 months in the length of West 4th from roughly Balsam to Burrard.
“I don’t personally see a stop to that (demand),” he said. “We have spaces where we don’t even put up a sign and we already have three or four offers, which is testament to the marketplace.”
Current net lease rates for the 2200 block of the street are $120-$135 per square foot, according to Moriarty. While expensive locally, West 4th still remains attractive when compared to similar international locations.
West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.The Latest Scoop on West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.
Long-term development projects spell growth for the area
Meanwhile, work continues on the Broadway Subway — an expansion of Vancouver’s SkyTrain network that will include a terminus stop at Arbutus and Broadway, just a short walk from the core of West 4th. That will make it easier for visitors and shoppers from around the region to access the neighbourhood when the line opens in 2026.
Moriarty also pointed out that a couple of massive mixed-use residential projects are also in the planning stages in the area that will eventually boost the local shopping population including at the First Nations-led Jericho Lands, where MST Development Corporation has a plan to build 13,000 homes on a 36-hectare master-plan site near the western end of West 4th.
Near the southern end of the Burrard Street bridge on False Creek, Squamish Nation is developing Sen̓áḵw, an 11-tower project built on Nation land. Work is already underway with the development expected to bring 6,000 new rental homes and 1,200 affordable homes to the area by 2027 — all within walking distance of West 4th.
The short-term prospects for West 4th are already incredible and the long-term prospects are also bright, Moriarty said. “Demand isn’t going anywhere. I think it’s going to get stronger and stronger.”
West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.West 4th in Vancouver, BC in July 2023. Photo: Lee Rivett.
Kit and Ace
Mount Royal Village, Calgary (Image: Kit and Ace)
Unity Brands Inc., owned by well-known Canadian entrepreneur Joe Mimran, David Lui and Frank Rocchetti, have big plans to grow retailer Kit and Ace after recently acquiring the brand.
“Kit and Ace has first of all really, really strong top of mind awareness which was built up over the years. Even though the brand has only been in the market eight years. But I think the brand has a much bigger image than it has footprint, certainly,” said Mimran.
Joseph Mimran
“I loved that it was direct to consumer which I’m obviously familiar with a direct to consumer model. And I still believe in the direct to consumer model and it had a very strong consumer franchise. A franchise of consumers that are very homogeneous, particularly on the men’s side, and because of that I believe that the positioning is very, very clear for the brand.
David Lui
“And it’s not too often that you can get a brand, buy a business, where the customer is clear as to who that customer profile is and what the ethos of the brand is all about. To me, and to Frank and to David, we felt that with a little bit of tweaking we could really continue to grow this brand. That’s what we found exciting.
“This is in my wheelhouse from a design standpoint. So we’ve taken over the design and development side of the business and I think we can add a lot to this already very, very good base of business.”
Image: Kit and Ace
Image: Kit and Ace
Mimran is a pioneer in the fashion industry, having founded or co-founded esteemed brands such as Club Monaco, Joe Fresh, Caban, Pink Tartan, Gry Mattr, and Rise Little Earthling. He has been honoured with numerous industry awards, including the American Marketing Association’s Marketing Hall of Legends award, Canadian Style Award, and the lifetime achievement award by the Design Exchange.
Under the new ownership structure, Lui assumed the role of CEO, overseeing the organization’s growth, operations, marketing, e-commerce, finance, and logistics from the head office in Vancouver. Meanwhile, product design and development has relocated to Toronto, managed by Mimran’s creative design centre. Working alongside the new owners, George Tsogas, the previous owner, remains with the company, ensuring a seamless transition and continued operational excellence. Tsogas assumed the role of Chief Operating Officer.
Kit and Ace currently has four stores – Queen Street in Toronto; in Oakville, Ontario; Mount Royal Village in Calgary; and Gastown in Vancouver. A significant part of the business is ecommerce, transacting throughout the world online.
Kit and Ace in Gastown within downtown Vancouver (Photo: Lee Rivett)
Mimran said Unity Brands didn’t buy Kit and Ace to keep it where it is.
“With Joe and Frank’s exceptional track record in the retail fashion industry and George’s invaluable operational expertise, we have assembled a winning combination that will elevate Kit and Ace’s distinctive identity, foster creativity, and deliver unparalleled experiences for our guests,” said Lui.
“Product is moving to Toronto under (Mimran’s) design centre in Toronto. Here in Vancouver we’re strengthening the organization through a bit of a change of putting people in the right roles, giving people the right opportunities, also looking at operating efficiencies within the business. So foundationally that’s a lot of work being done.
“In the meantime, we have our eyes on growth but cautious, controlled growth, because of the environment that we’re in but definitely consumers love the brand, consumers shop the brand. Over 60 per cent of our customer base is on a repeated basis, pre and during the pandemic, they still shop with us. So with that being said we are planning to open two more stores by the end of this year and we hope that with the right real estate, the right opportunities, we can open another two to four stores next year.”
Kit and Ace Queen Street (Image: Dustin Fuhs)
Lui said the company is aiming to open a flagship in Vancouver this year for the homegrown brand. The second store would be either in Toronto or in Calgary.
Lui has 25 years’ experience as a senior executive retailer on global brands including: ESPRIT, The North West Company, Mark’s, SportChek, and KORITE. His strong background in marketing, digital and retail operations has led to the success of multiple global award-winning marketing campaigns and was recognized as the CEO of one of the Fastest Growing Companies in Canada. Lui won the prestigious BDC Young Entrepreneur Award and was named one of Business in Vancouver’s Forty under 40. Most recently, he was ranked 11th in the Global CEO Awards.
“We’re very, very excited. It’s hard to find exciting stories when it comes to physical retail because physical retail has gotten such a bad knock over the past three years. Certainly coming out of COVID it’s changed a little bit but I would say the landscape is still pretty troubled but we’re very confident. We’re quite optimistic about our chances of really developing a great brand here and taking it outside of Canada,” said Mimran.
Rocchetti boasts an extensive retail background, having held senior merchant roles at Sears and Loblaws, and overseeing captive apparel development for Coles Australia and Kroger US. Most recently, Rocchetti, alongside Mimran, has been instrumental in the transformation of the Canadian brand, Tilley.
Reformation pop-up at Holt Renfrew Calgary. Photo supplied
Innovative eco-friendly US-based women’s fashion brand Reformation has opened a 500 square foot pop-up location at Holt Renfrew in Calgary. The retail space is intended to test the waters in the Calgary market after entering Canada before the pandemic with its first permanent store.
The pop-up is located on the second floor of the Calgary Holt Renfrew store, in an area containing other contemporary brands. It’s the first time that Reformation has opened a pop-up location in Canada. The Calgary pop-up is eco-friendly with Reformation offsetting 100% of the electricity used during the pop-up with wind energy, according to the company.
The Calgary Holt Renfrew store recently renewed its lease in the city’s downtown core, and is one of the key anchors of the CORE shopping complex that spans several city blocks. The second floor of Holts is also home to a women’s designer department that houses some of the world’s top brands, such as Akris, Brunello Cucinelli, Chloé, Dolce & Gabbana, Moncler, and others. The store’s main floor houses concessions for Chanel, Hermes, Tiffany & Co., Loro Piana and this fall, Gucci will open a large ‘world of’ space at the centre of it all.
Reformation pop-up at Holt Renfrew Calgary. Photo suppliedReformation pop-up at Holt Renfrew Calgary. Photo supplied
Reformation opened its first Canadian store in the summer of 2019 at Toronto’s Yorkdale Shopping Centre. In late 2022, a second location opened on Yorkville Avenue in Toronto. The 87 Yorkville Avenue store features Retail X “magic wardrobes” dressing rooms. Touchscreen monitors allow customers to digitally choose the styles they’d like to try on while shopping. The consumer’s selections will then populate into one of the store’s dressing rooms.
Reformation, known for its sustainability focus, is also known for being a “cool girl” clothing company (as stated in Allure). Reformation has become popular amongst celebrities such as Rihanna, Taylor Swift, and model Karlie Kloss and the celebrity endorsements have reportedly led to the brand seeing strong sales exceeding $100 million annually. The company says that its goal is to create designs that are ‘sexy, edgy and feminine’, utilizing sustainable methods and materials.
Reformation began by selling vintage clothing out of a small Los Angeles storefront in 2009. The brand quickly expanded into making its ‘own stuff’, with a focus on sustainability. In 2019 Reformation announced that it had sold a majority stake to Permira Funds, a private equity firm known for investing in labels such as Valentino and Proenza Schouler.
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.
Despite recession predictions, retail continues its strong post-pandemic growth into 2023, says a new report by commercial real estate firm Colliers.
The consumer appears resilient, with higher savings rates than pre-pandemic, and a huge demand for travel, hospitality, and entertainment. Favourable demographics, particularly strong population growth compared to other developed countries, continues to act as a tailwind for retail sales. Overall sales rose in every province but one, despite shortages in areas such as automotive, said the 2023 Retail Outlook.
“Retail rents reached all-time highs as renewed leasing demand and a lack of new developments funnelled demand to existing centres. Vacancy rates dropped nationwide, as the nadir of retail leasing in 2021 has turned around. Despite high-profile closures of US retailers such as Bed Bath and Beyond and Nordstrom, the vacant space has been rapidly absorbed in most markets,” said Colliers.
Shuttered Nordstrom at Yorkdale Shopping Centre (Image: Craig Patterson)
“Retail investment continues to be dominated by private investors, as larger institutions and REITs continue to be net sellers. Larger players have also focused on the redevelopment aspect of retail, turning suburban assets into mixed-use developments or land assembly plays.
Madeleine Nicholls
“Throughout the pandemic, grocery, pharmacy, discount stores, and quick-service restaurants – performed very well. These sectors have continued to attract both customers and investors into 2023, even as restrictions have disappeared . . . The retail industry of Canada has seen a focus on sustainability, partly manifested in the growth of second-hand and vintage apparel, providing an unexpected growth area going forward.”
Madeleine Nicholls, Senior Managing Director Brokerage | Vancouver, for Colliers, said the key message from the report is that Canada overall compared to other countries is outperforming many nations in both economic growth and retail sales.
Even with the various interest rate hikes, Canadians have remained resilient when it comes to retail spending, added Nicholls.
DUER on Ossington Avenue in Toronto (Image: Dustin Fuhs)
The departures of American-based retailers recently have garnered much media attention and headline news but the Canadian retail market has also seen, at the same time, expansion of existing brands and new brands entering the market.
“That’s an indicator of the low vacancy rate that we’re seeing across the country in all segments. When great locations become available, they’re very desirable,” said Nicholls.
She said a few things have fuelled retail spending in Canada including strong employment, population growth and the wealth effect that even during this environment of higher prices from homes to vehicles, people have higher savings than they did pre-pandemic.
Nicholls added that certain retail categories showing year-over-year sales growth is promising, including shoes, clothes, and food and beverage which have been solid and healthy.
“All the provinces are performing really well but what really jumps out is the spending in Alberta and Newfoundland which is extremely high. That’s perhaps driven by the fact that there has been movement to those provinces,” said Nicholls. “And in Alberta’s case, different than the oil boom, people are moving to Alberta now because of the demographic shift of young people moving there in search of affordability for the same reason that people have moved to Newfoundland as well.”
The Colliers report said retail spending dipped in the first quarter of 2023, as the unprecedented interest rate hikes of the prior year took effect. While experts forecast a mild pullback in consumer spending, it is expected to be similar to prior declines, returning to trend within two years. Rate increases of +4.25 per cent in 2022 were intended to address runaway inflation in Canada, a problem shared with much of the rest of the world.
“While inflation nominally helps retail sales numbers, it hurts it overall when we look at spending in real dollars. Clearly there has been some pullback since 2022, where spending peaked in Q2 just as interest rate increases were taking effect. Higher costs of housing, gas, cars and food have squeezed spending elsewhere,” said the report.
“Interest rate hikes have a number of benefits for retail long-term, as the goal of reducing inflation and increased housing costs will hopefully return more spending power to the household. Additionally, higher rates incentivize saving over borrowing, which can create a “wealth effect” where households spend more as they see their assets grow.”
Colliers Retail Outlook Report 2023
Colliers said the extreme drop during COVID lockdowns led to years of “pent up” demand for everything from international flights to cars to live sports to music events, and the economy is only just now adjusting to these new levels of demand for “experiential” retail.
“Overall retail spending is maintaining a consistent trend, reflecting Canada’s strong population growth and robust labour market. Favourable “fundamentals” are the driver for consistent growth in the retail sector until at least 2025,” added the report.
“Prior to the pandemic, the Canadian consumer was strained, with household savings rates reaching zero or even negative levels. Despite lower inflation, rising costs in several areas combined with weak wage growth was clearly straining households.
“However, one unintended side effect of lockdowns was a drastic improvement for some in household finances. Between mortgage deferrals, income supports, business loans and the reduced costs of working from home, households suddenly experienced savings rates in excess of 20 per cent. There was nothing to spend on (no travel, shortages of many products due to shipping issues caused by lockdown) and households socked away unprecedented savings. This led to a boomerang with the “pent up demand” spending upon reopening, and the subsequent inflation that is only just now subsiding.”
Columbus Cafe Construction Hoarding in Toronto (Image: Dustin Fuhs)Future Columbus Cafe in Toronto (Image: Dustin Fuhs)
While the closure of a few large occupiers such as Nordstrom garners wide coverage, there has also been a surge of new retail occupiers across Canada, explained Colliers.
“Quick-service restaurants have been thriving for years, with a highly scalable business model that was ideally suited for small urban spaces. Large expansions are planned for a number of occupiers like US stalwarts Taco Bell and Burger King, homegrown brands such as Harvey’s and Mary Brown’s Chicken, and new chains like Egg Club (Ontario) and Columbus Café (Quebec),” said the company.
“In Q1 2023, Goodwill announced a large expansion, planning to open 40 new stores in more affordable markets. Across Canada and the world, second-hand shopping has surged in popularity, to economize in an inflationary environment, support local stores, and for the “thrill of the find” as opposed to the standardized and searchable environment of ecommerce.
“Second-hand shopping also has obvious environmental benefits, which increasingly appeals to customers looking for sustainable retail options. Thrifting intersects with a number of other retail trends, such as a desire for less standardized/”off the rack” fashion, and the rise of influencer marketing – exemplified by the story of a TikTok personality who found a $10,000 vintage Versace dress at a local secondhand shop.”
The report said vacancy declined across several categories from their COVID-era peak, with regional vacancy down five per cent from 2021 and the popular community mall reaching record lows of four per cent. “Destination” shopping centres (super-regional) have performed well and now have vacancy commensurate with neighbourhood retail. The loss of some notable occupiers hasn’t obviously impacted vacancy rates in any class yet, though it’s possible we’ll see the effects later in the year.
