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Calgary Co-Op to Redevelop Stores into Mixed-Use Projects

By
Mario Toneguzzi
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OAKRIDGE CROSSING DEVELOPMENT RENDERING: QUARRY BAY INVESTMENTS VIA FACEBOOK

Calgary Co-op is investing $2.25 billion in the city with several innovative mixed-use redevelopment projects that will create 2.4 million square feet of retail, restaurant, office and residential space as well as revitalize underutilized areas in strategic urban locations.

Tony Argento, director of real estate and development for Calgary Co-op, said the total investment in the Calgary market includes about $1 billion in new centres and improvements to existing inventory and about $1.25 billion of mixed-use development.

It also involves the company looking to expand in other rural markets in the Calgary area as well as in more inner-city Calgary locations.

WINSTON ON SIXTEENTH DEVELOPMENT RENDERING: SKYRISECITIES

“We’ve got a very limited sandbox that we can play in. We have to maintain our market share. So if we don’t pick up those spots competitors will and we’re going to lose that market share to them. So our focus is to grow our business,” said Argento.

Key projects that will transform different neighbourhoods throughout the city include Mission Landing, Boulevard at Dalhousie, Oakridge Crossing, and Winston on Sixteenth.

Argento said many Co-op owned and controlled properties are under-utilized and the company realized a few years ago that there was plenty of potential for them in the future.

“And a lot of the sites are strategically located in mature communities where development has stopped for many, many years. So there’s nothing new that has been brought on the market. I saw a big opportunity for redevelopment,” he said.

“We’re differentiating ourselves from our competitors to remain viable. Technically if we were just competing on groceries probably Co-op would not exist for too long. A lot of our revenue now is coming from our real estate, from our tenants. We’re a fairly large landlord. By the time we start doing the majority of these re-developments the real estate department will be number one in terms of earnings for our members. It will exceed petroleum. It will exceed grocery.

“It’s important what we’re doing. We’re able to help the groceries to regulate itself to compete because of all the revenues we’re getting from the real estate portfolio.”

Residential developer Quarry Bay is working with Calgary Co-op on several of the innovative mixed-use redevelopments in established Calgary neighbourhoods.

“One of the advantages that we’ve got is that some of our centres are in mature communities. People are getting to the age of downsizing or rightsizing. They don’t want to leave the community. So by offering the residential components on our properties with all the amenities it’s an attraction for people,” said Argento. “There is that pent-up demand for these projects in those communities.”

MISSION LANDING DEVELOPMENT RENDERING: MISSIONLANDING.CA

The key developments, which will take up to six years to complete in some cases, include:

  • Boulevard at Dalhousie. Redevelopment will include 632,325 square feet. It will have 436 residential units in two buildings. There is also a 58,000-square-foot medical office planned. A new grocery store of 47,000 square feet will be added with a functioning greenhouse on the roof which will produce products for the store. A co-generation system will power the site. Also planned is a 5,200-square-foot liquor store, 39,500 square feet of retail space with a cannabis store and perhaps a small restaurant or coffee shop. Construction is expected to be completed in about six years;

  • Oakridge Crossing. The 438,772 square feet of new development will include a new 56,000-square-foot grocery store, 34,800 square feet of office space, 32,700 square feet of retail space and 249 residential units. Co-op is going to tender with some of the contractors to start the first phase of the project which is the professional building. The project could start in January or February 2020 with completion expected by around 2025;

  • Winston on Sixteenth (also known as North Hill). It was built in 1960, making it the company’s oldest store. The major redevelopment will include a new 44,000 square-foot grocery store, a new gas bar, a new car wash and potentially a new 4,800-square-foot Wine Spirits and Beer store. In addition it will add 8,200 square-foot of retail space and 12,500 square-foot of office space. There will be 115 residential units. It will take about five years to complete all phases of the project;

  • Mission Landing. The project is under construction with a new gas bar, car wash, and liquor store. There will also be 70 affordable apartment rental units in a five-storey building. There will be an underground parkade with about 60 stalls. The gas bar may be open spring or early summer of next year. The residential tower will open about a year after that.

“All the projects that we’re doing will have greenhouses, community gardens, co-generation. We may look at some for solar panels. So anything that we can do to reduce the carbon footprint. That will differentiate us from our competitors because none of them are doing that,” said Argento.

He said Co-op also has about six other new store locations it will be building over the next few years: Sage Hill Shopping Centre, Springbank Hill across from Aspen Landing, Silverado, Okotoks, the Eau Claire Market and Cochrane.

MISSION LANDING DEVELOPMENT RENDERING: MISSIONLANDING.CA

Argento said the company has finalized a purchase of property at Crossfield where a gas bar is planned and possibly a fast food retailer. The company is also actively looking for sites in Cochrane and Chestermere.

“We’re identifying spots there. Those are the only two rural markets that we don’t have a grocery store presence in,” he said.

Argento said Co-op has also started to partner with some local companies like Spolumbo’s and Cluck N Cleaver creating food kiosks for them in the company’s West Springs store in Calgary.

“We’re kind of looking at that model now looking to work with some small, local providers that we can create space for them and allow them to operate their businesses within our grocery store. It creates good traffic and synergies in helping the smaller businesses get a lot more exposure than they would on their own,” he said.  

Six co-gen units are now operating for the company.  

Co-op is also going to be building several new gas bars in the near future as well as several new liquor stores, and cannabis stores.

Editor’s note: Retail landlords across the country are intensifying under-utilized real estate by adding mixed uses. Learn more about the trend at Retail Council of Canada’s Brick-and-Mortar Forum, being held the morning of Tuesday, November 19th in Downtown Toronto.

Canadian Firm ‘prisma construction’ Expands Internationally

By
Mario Toneguzzi
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PHOTO: PRISMA CONSTRUCTION

Montreal-based construction firm prisma construction has developed a reputation for its experience over more than 30 years being retail construction specialists across Canada.

Now, the company is expanding its reach with a goal of building stores throughout North America and overseas after it recently completed its first store in China for client la Vie en Rose.

“We’ve been in business for over 30 years and have always prioritized our client’s deadlines,” said Alessandro Iacampo, project manager with prisma.

PRISMA CONSTRUCTION TEAM MEMBERS PHOTO: PRISMA CONSTRUCTION

“It’s about our experience. There are a lot of contractors capable of building stores, but what distinguishes us is our experience, expertise gained and dedication to each project that makes the difference. Over three decades of business in the same field speaks for itself. There is a lot of value in that,” said Diego Puente, senior project manager and business development manager with prisma.

prisma has been in business since the late 1980s.

“Our clientele, for the most part, has focused on retail… anything to do with malls. Our main clients have been Garage, Dynamite and la Vie en Rose predominantly,” explained Puente. “Today, we’re also moving towards commercial and office work but that’s fairly recent.”

The company has built retail stores for numerous retailers across Canada.

“We specialize in tenant improvements in malls or outlets,” added Puente.

GARAGE’S WEST EDMONTON MALL STORE PHOTO: PRISMA CONSTRUCTION

He said clients today want to be involved in the construction process much more than they used to be. “They want to participate in the build out. Cost is always a priority.”

“Although there’s always an inclination towards doing a project as quickly as possible, they never really want to sacrifice a store for a quicker timeline,” said Puente. “When a retailer is progressing, moving forward, evolving, they are concerned mostly with making sure the store’s overall concept and ideal is respected and ready for showcasing goods.”

“In some cases, however, because retailers have faced challenges in recent years, the main focus is maximizing return on investment while targeting fewer locations,” says Iacampo.

The Garage store on Sainte-Catherine Street in Montreal is one of the company’s biggest ever projects.

PHOTO: PRISMA CONSTRUCTION

“There were many, many elements of construction that you tend not to see in retail such as red structural steel for instance,” said Iacampo. “Two floors about 6,000 square feet. In terms of scope and complexity the Garage store was by far one of the biggest ones we have done.”

The company just finished building la Vie en Rose’s first corporate store in China in the city of Guangzhou.

“That build-out was an incredible experience,” said Puente.

The retailer’s President and CEO, François Roberge, said: “We were ready to accept the challenge of taking our first steps in China. We are looking at our first two years in the country as a real learning period. It’s very important to understand how the market works in order to build a foundation for our expansion.”

PHOTO: PRISMA CONSTRUCTION

“Over the next two years, we plan on opening several physical locations in Guangzhou and continuing our expansion in China from there,” said Aurélie Daoust-Lalande, Vice-President, Strategy and Development at la Vie en Rose. “We have the ambitious goal of doubling the size and profitability of the company by 2022, and our expansion outside of Canada will definitely play a major role in achieving this objective.”

Puente said la Vie en Rose has been prisma’s in-house client for more than a decade.

Iacampo said prisma is also looking at expanding into the United States in early January to build retail stores there.

prisma construction has two sister companies, ICM Millwork and PMB Metal, that work in concert with each other developing and manufacturing custom fixtures. They also work independently, with both sister companies focusing on their areas of expertise.

“We’re getting into hospitality and we are also expanding pretty heavily on importing goods from China to service our clients,” said Iacampo.

BONLOOK’S CF FAIRVIEW MALL LOCATION PHOTO: PRISMA CONSTRUCTION

prisma describes itself as “retail construction specialists with soul.”

“We are passionate, creative, hard-working and modest. We are experienced, intelligent and determined. We are always accessible to our clients, partners, employees and suppliers. prisma construction is a people business dedicated to deliver outstanding work. We pride ourselves in proposing retail solutions with the upmost craftsmanship which contributes to a client’s success,” it says on their website.

“prisma construction is a leading retail construction specialist. We do development, rollouts management, project management plus, coordination and follow up. We give it our best, every day. That’s prisma construction.”

106: Forever 21, Uniqlo and Sunterra Market

By
Retail Insider
-

This week Craig and Lee talk about Forever 21, Uniqlo and Sunterra Market.

The Weekly podcast by Retail Insider Canada is available on Apple Podcasts, Stitcher, TuneIn, Google Play, or through our dedicated RSS feed for Overcast and other podcast players.

Sponsored by Oberfeld Snowcap: Founded 40 years ago, Oberfeld Snowcap is a full-service real estate and retail advisory firm that focuses on retail tenant representation, strategic planning, property and project leasing, as well as real estate investment sales.

Discussed this episode: 

Other Topics from the News:

  • No Name Ad Campaign in Toronto
  • ASICS apology for offensive video playing on promotional screens

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Upscale Alberta-Based ‘Sunterra Market’ Grocery Concept Looks to Expansion with Newest Store

By
Mario Toneguzzi
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BOWER PLACE IN RED DEER, ALBERTA. RENDERING: QUADREAL

The seeds of Sunterra took root on the family farm over 40 years ago in Acme, Alberta.

And today the Sunterra Market is a popular store with seven locations in Calgary, two in Edmonton and one coming in the near future in Red Deer.

“With superior hogs and industry-leading practices, the farm grew bigger and better. To showcase the top quality meat and provide customers with a unique European-style shopping experience, Sunterra Market launched in downtown Calgary at Bankers Hall in 1990. Since then we have been working tirelessly to exceed customers’ needs in our nine markets across Alberta,” says the company on its website.

Art Price, chairman of Sunterra, said the family-owned and run company’s purpose is to nourish customers with affordable, fresh, wholesome food.

PHOTO: SUNTERRA MARKET VIA FACEBOOK

“Our retail business in Bankers Hall we are now just updating that yet again and that is really 30 years old. So we’ve been in the retail business for 30 years and it was the last arm of the business that we put together,” said Price.

“Now we have farms in Ontario, around Alberta, in Iowa and in South Dakota. The farming business is now quite diversified and spread around but it all started in Acme.”

Price said the Red Deer location is currently in the design/build stage.

The company always has a potential development list but Red Deer is the only one right now that is going forward.

CLICK FOR INTERACTIVE MAP OF RED DEER, AB
SUNTERRA WILL HAVE AN ENTRANCE FROM WITHIN BOWER PLACE, ACCORDING TO RENDERINGS. IMAGE: QUADREAL

“It all starts from the original basics where we focus on high quality fresh and chef prepared as our focus and then we price it at a number that most of our customers would say is like a premium product but for not premium prices,” said Price about why Sunterra has been successful. “It’s all about if you look at it more from the farmer’s genetics quality, fresh, clean, prepared food but in a primarily pickup mode although if you pick Bankers Hall you can both pick it up and eat there. So we have the combination. But we have no pure restaurants. We don’t go into the pure restaurant table-service model with a described menu.

“We were doing that way back 30 years ago when having a chef there or a combination of chefs and a high-end deli, and prepared, wasn’t normal in the mainstream groceries stores if you go back that far. A lot of people said you can’t do it. You can’t staff it. You can’t deliver that way and still price it in at that price. And we’ve basically proved that we can.

“Numerous people now have some level of prepared food and deli which is quite normal. When we started the business it was not normal. And we still have a higher-end selection and higher-end quality than is in the market. So we just stayed with that most fundamental business model where we wanted to be convenient, we wanted to be fast, but we don’t want to trade quality of the eating experience from a food quality point of view.”

Does the company have plans for further expansion?

“It’s a private, family-controlled business and we really don’t have sort of external drivers on scale like you would if you were a public company and you were dealing with public shareholders,” said Price. “So we’re very much quality and expand where the market opportunity is tangible to us and we know we can execute.

“We don’t literally have a grand scale strategy that we’re aspiring to. We have more maintain the customer experience as the primary driver and then what are the opportunities.”

PHOTO: SUNTERRA MARKET VIA FACEBOOK

The company does export off the farms internationally with sales of pork and Japan has been an example of that for many decades. It recently also recently opened its specialty prosciutto plant in Acme which has export credentials.

“At the retail level, our model is very much on the ground delivery to customers and so we’ve looked outside the province. But when we look at the logistics of it and the ability to maintain our service model it gets quite complicated for us. While I wouldn’t say never, I’d just say that each time we’ve looked at it we kind of thought better incremental opportunities in Alberta which is still associated to our farms and our infrastructure than if we let’s say went to Ontario,” said Price.

Sunterra also has a strong community involvement and its ROOTS program partners with several community organizations such as Inn From the Cold and Ronald McDonald House.

Canadian Fashion Retailer ‘ADDITION ELLE’ Shifts Strategy with New In-Store Brands and Sizing

By
Mario Toneguzzi
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ADDITION ELLE’S NEW CARREFOUR LAVAL FLAGSHIP PHOTO: ADDITION ELLE

Canadian retailer ADDITION ELLE has been making its mark on the national fashion industry for years and recently it has launched a new direction by offering more popular brands in store such as Levis, Champion, Birkenstock, Girlfriend Collective, Calvin Klein and Body Glove.

It has also expanded its size offerings starting at a 10 to 32 and it has launched its fall campaign that conveys the message “Fashion can be bigger.”

The retailer’s success is built on making the statement that size inclusivity should be seen across the board from different brands and styles.

“The purpose of the campaign is really to have a voice out there to tell our customers that in fact it’s about diversity and bringing her product so that it is available to her,” said Rosalba Iannuzzi, vice-president of merchandising for ADDITION ELLE. “So basically what we’ve talked about is why could designers do all these crazy things in terms of styling and being out there with styles but really they can’t do a simple thing as plus fiving.

“So to be able to give this customer a choice and to bring brands to her too that’s really the importance of our house brands but brands like Champion, Levis, and so on. To have this choice for her. That’s really the voice of the campaign.”

Iannuzzi said the message resonates with consumers, giving them an opportunity to have a one-stop shop where they have choices available.

“And choice has not been available to the plus customer for a very long time. What we want to be able to say with this campaign is that we are the ones that are allowing fashion to be bigger and to be able to give her all these choices,” she said.

“So the reason why it resonates is that they can come to us and they can find the availability of product done for them. We are a one-stop shop and we can dress her from head to toe. The availability of finding the right undergarments and the right shoes for that total outfit and head to toe is really a first on the market and something that is very dear to us because we want to be able to have this offer for her. That’s really what it is. The diversification of a woman and addressing that. And doing it through brands. Bringing brands to her.

“We’re working with these brands in order to have the right assortment and the right sizing for them. It is also a challenge. We’ve had to work with brands and in some cases we have to convince them and in some cases we work with them for the right specs. So it’s about bringing her that availability that is not offered to her especially not in one place.”

Sarah Anne, a Toronto-based plus size fashion blogger and a body positive activist, is part of supporting the ADDITION ELLE fall campaign.

“I have been a fan of ADDITION ELLE since my teens and in the recent year or so I’ve just fallen in love with them all over again because of what they’re doing with the brand. I’m involved with them not only because I’m a fashion blogger to show my audience what’s available out there for plus size clothing but as a fan who legitimately loves and wears the clothing and it’s super exciting to see what they’re doing,” said Sarah Anne.

“I was lucky enough to be asked to be involved in the campaign and also just as someone who is so excited to be a part of plus fashion that is more like now high-end fashion and to be associated with that is just a huge honour.”

She said ADDITION ELLE is filling a void in the market that needs to be filled these days.

Earlier this year, ADDITION ELLE launched a new re-imagined flagship store at the brand’s Carrefour Laval location in Montreal.

The newly redesigned Carrefour Laval store will be the first of its kind for ADDITION ELLE, which has 80 stores in Canada and the company will be looking at how it will be expanding the concept of the Montreal store to more and more people across the country.

ADDITION ELLE has also invested in its digital flagship with a redesigned ecommerce platform.

Uniqlo Opens 1st Alberta Store at West Edmonton Mall Amid Huge Crowds [Photos]

By
Christopher Lui
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UNIQLO store opening at West Edmonton Mall. Photo by Jason Franson CP Images.

The long awaited arrival of popular Japanese chain Uniqlo at West Edmonton Mall is now over. West Edmonton Mall officially welcomed Uniqlo on September 27, 2019. The store opening was first announced by Retail Insider in June 2019.

The store spans more than 15,000 square feet and is located on the upper level of the mall’s ‘Phase II’ overlooking ‘Mayfield Toyota Ice Palace’, which is the mall’s indoor National Hockey League-sized rink used for recreational skating, figure skating, hockey and special non-ice events.

Uniqlo replaces three retail spaces formerly occupied by Murale, Laura and Browns Shoes. The Uniqlo store has taken over almost the entire footprint of the three stores. The only exception is the upstairs 2,665 square foot mezzanine of the former Murale store which was not repurposed by Uniqlo. The Shoppers Drug Mart-owned beauty chain Murale closed its doors in the mall in Spring 2019. Laura and Browns Shoes have relocated to new spaces on the upper level of Phase II.

UNIQLO store opening at West Edmonton Mall. Photo by Jason Franson CP Images.
  • PHOTO: CHRISTOPHER LUI
  • PHOTO: CHRISTOPHER LUI

Retail Insider was fortunate to tour the West Edmonton Mall Uniqlo store prior to the grand opening. The tour was led by Uniqlo Canada’s Public Relations Team, Sehee Kim, PR Manager and Salina Shairulla PR Assistant Manager. The West Edmonton Mall store carries men’s, women’s, children’s and infant fashion, all designed with the concept of LifeWear. Uniqlo’s LifeWear concept is creating simple, high quality, everyday clothing. The fashions include tops, bottoms, outerwear, accessories, loungewear and socks and underwear.

The store carries its flagship collections including HEATTECH which features a technological innovation involving inner wear that generates heat from one’s own body temperature, Ultra Light Down which is down outerwear that is light weight and super warm and UT Graphic T-Shirt Collection which features short term collaborations with other brands. The store will also carry its signature $99.90 cashmere sweaters in 16 colours in the next few weeks. The fitting rooms are staffed with an attendant and are unisex which allows the rooms to be flexed if there is a high demand.

Uniqlo West Edmonton Mall also offers customer friendly options including an Alteration Service for hemming of bottoms. Depending on the bottom the alteration may be complimentary, or a nominal fee is charged. The alterations are completed instore and can be ready as fast as 60 minutes. The store offers an enhanced checkout process. With the use of RFID tags in the clothing, the cashier folds and places the items to be purchased on a scanning pad. The scanning pad recognizes the item and price with no manual scanning required. With a high volume store this reduces checkout time and ensures accurate supply management on the back end. The store will employ approximately 80 full and part time employees.

Opening day generated significant excitement with the first customers starting to line up at 5:00 am on Friday morning. When the store officially opened its doors at 10:00 am, the line stretched all the way to the Canada Goose store located in Phase III of the mall. Salina Shairulla, PR Assistant Manager estimated that over 800 people were in line to get a first glimpse of the store. To celebrate the grand opening the first 200 people in line received a limited edition tote bag emblazoned with cities from around the world that have Uniqlo’s store locations with Edmonton prominently displayed at the top of the bag.

Lucky shoppers were also able to receive the tote bag with a purchase of $75.00 or more. In addition, with any purchase shoppers could receive a free Women’s or Men’s HEATTECH Crew Neck Long Sleeve T-Shirt. To help promote downloads of the Uniqlo Canada App, shoppers were offered a $5.00 off coupon on their first purchase plus also a chance to win a trip to Tokyo. The prize includes airfare for two, four nights hotel stay and $500 in spending money. Throughout the store there were also numerous promotions with discounts on their popular Ultra-Light Down outerwear collection, flannel shirts and pants.

The selection of West Edmonton as the first Uniqlo location for Alberta is ideal. West Edmonton Mall attracts more than 28 million visitors annually, with nearly 50% being from out-of-town. The mall draws visitors from all over Edmonton and beyond. The visitors are a diverse cross-section of cultures. The mall even has a themed Chinatown section where visitors can experience a taste of Asian culture. Uniqlo fits perfectly into the visitor profile of West Edmonton Mall as they are multicultural and may have previously shopped Uniqlo in Canada or abroad.

  • PHOTO: CHRISTOPHER LUI
  • PHOTO: CHRISTOPHER LUI
PHOTO: CHRISTOPHER LUI

The Edmonton store marks the 12th Uniqlo store in Canada with seven stores in the Greater Toronto Area (CF Markville, CF Toronto Eaton Centre, Oshawa Centre, Square One, Upper Canada Mall, Vaughn Mills and Yorkdale) and four in the Vancouver area (Coquitlam Centre, Guildford Town Centre, Metropolis at Metrotown and CF Richmond Centre) With the line ups to get into the store and the number of shoppers during the grand opening weekend, it appears that the West Edmonton Mall location will be very successful. Uniqlo’s combination of fashion essentials for the entire family along with a competitive price point will appeal to many Canadian shoppers. Uniqlo has said that it could eventually operate as many as 100 stores in Canada however no further store openings have been announced. The Montreal market is said to be next for Uniqlo, with an announcement said to be forthcoming.

Editor’s note: Jeff Berkowitz of brokerage Aurora Realty Consultants is handling Uniqlo’s search for retail space in Canada and negotiated all Canadian lease deals on behalf of the retailer.

Why Forever 21’s Lack of Customer Experience in Canada Led to its Demise: Expert

By
Retail Insider
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Forever 21 (Image: Hans Olav Lien / Wikimedia

By Aleena Mazhar, VP and Partner at FUSE

Retail stores need more than just good product to back up their sales. This is apparent with the announcement of Forever 21 closing all Canadian stores as it looks to restructure and refocus the business in the United States as well as Mexico and Latin America.

Recently, Canadian retail sales have gone down. This can be attributed to various reasons – the increase in consumer debt leading people to spend less, or consumers being more environmentally conscious has resulted in their holding on to clothes longer – but the efforts of retailers cannot go unnoticed. In a study done by Statistics Canada, retail sales are only up 1.8 per cent compared to last year, which is among the lowest gains in a decade. Retailers must look outside the box in non-traditional spaces to attract and retain customers.

Shoppers have a different expectation of retailers and how their spaces inspire brand interaction. This has led to the rise of experiential retail – the convergence of experiential marketing within the retail environment. Shoppers are looking for an experience that brings them closer and connects them to brands in a more immersive way. They are looking to touch, feel, and be educated on brands in a more personal way than is possible in other channels. This has changed how retailers are visualizing the shopper experience within their storefronts from functional to brand experience centres. Forever 21 struggled with this, having no existence of an immersive or differentiated shopper experience present in their stores.

Experiential marketing creates human connection between brands and their consumers in ways that are personal and drive influence. This influence comes from experiencing moments that revolve around things people value. Whether it’s creating a sense of community for shoppers, or building spaces for creativity and innovation, or turning retail stores into education centres – the face of retail is changing. Many retailers are turning this channel into an avenue for their brand experience to come to life in order to deepen their connection with their shoppers and their communities. Ultimately, it creates that trust and loyalty between brands and consumers which has a positive impact on sales.

Massive new Lululemon store in Chicago.

Look at Lululemon. The Canadian brand has become much more than just a place to pick up high-end leggings; its overall experience leaves consumers feeling satisfied. Lululemon’s new 20,000 square foot Chicago megastore is two storeys and provides customers the opportunity to work out like at a traditional gym, while also shopping for product. The retail space boast two exercise rooms, a meditation area, and a smoothie bar – everything to fill up a couple hours in a person’s day.

If visitors forget their own workout gear, they can borrow from the store, with the ultimate goal of a purchase if the customer likes it enough. You can’t do that with online shopping! This store was an experiment and if successful, 10 per cent of stores will follow this new format by 2023.

Roots

Roots, another Canadian brand, is working within the same mindset. Now even a pair of socks you purchase can be personalized. Back in the summer of 2017, Roots launched a sensory store experience at Toronto’s Yorkdale Shopping Centre (featured in Retail Insider) that allows customers to see, touch and live the brand throughout its different seasons. You can personalize and customize different products and this allowed Roots to break into the U.S. market in a memorable way. Roots has since expanded its concept store to other markets both in Canada as well as in the United States.

Brand experiences, done well, have the opportunity to create deep connections and engage communities in a way unlike ever before. While Forever21 looks to refocus its business goals in its remaining markets that will include the United States, Mexico and Latin America, the retailer should maximize the customer experience by finding ways to give shoppers more personal, impactful, one-of-a-kind, and curated experiences to bring them closer to the brand. The divide between retailers who are thinking shopper first and are evolving to an experiential retail model, and those who aren’t, is becoming increasingly clear. The time for retail evolution is now. 

Why it’s a Bad Idea for Le Chateau to Enter the US Market: Expert

By
Mario Toneguzzi
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PHOTO: VIA YELLOWPAGES

If Canadian apparel retailer Le Chateau has any thoughts of expanding into the American market, an international retail expert has some simple advice for the company: Don’t.

Randy Harris, president and owner of Trendex North America, a marketing research and consulting firm, said Le Chateau is really one of the very first apparel chains in Canada.

“It was founded in 1959 and while other companies, retailers, have come and gone, they’ve managed to survive. The problem that they had is they were always viewed as selling disco disposable type of clothing and they recognized that when H&M came into the market, and Zara, that they had to change their model. They just could not compete directly, if you will, with H&M,” said Harris.

“So they did the logical thing and they went upscale. And they improved their merchandise. They launched an ecommerce site and they focused at the same time on increasing their profitability by closing their under-performing stores. Those are the three or four things they have been doing the last couple of years. So they closed a lot of stores – the majority of which have been their outlet stores. And it seems as if the whole process of closing non-profitable stores is pretty much coming to an end. They seem to have pretty much stabilized on their store count.

PHOTO: LE CHATEAU VIA FACEBOOK

“The inherent problem though is they have not been able to increase their profitability. So even though they’ve closed under-performing stores and they’ve upgraded the quality of their merchandise, their comp store sales have not increased for over a five-year period. Nor has their profitability over the last two or three years. The problem that the company has today I believe is that it is under-capitalized in the sense that it has not spent the money on upgrading its stores to match the merchandise.”

Harris said the retailer started out doing that but that process has come to a stop in terms of really doing a significant number of renovations.

“There has become a disconnect between the merchandise in the store which is nice and has been upgraded and the store itself,” he said.

Harris said the company has also not been able to undertake a marketing campaign to really get their message out to consumers that the retailer is something new – that it has improved what it’s doing.

PHOTO: LE CHATEAU VIA FACEBOOK

The one positive, he said, is that Le Chateau’s ecommerce platform has proven to be successful.

In his August newsletter Canadian Apparel Insights, Harris wrote that there are a number of reasons for Le Chateau to forsake thoughts of expansion south of the border including:

  • Le Chateau’s own sales history – In just the period 2014-2018, Le Chateau’s sales fell in large part because it closed 82 stores. But, it should also be noted that only twice during the period did the retailer report an increase in its annual comp store sales;

  • Le Chateau’s financial situation – In 2018 Le Chateau lost C$23.8 million and during the period 2014-2018 the retailer lost C$143.6 million. If Le Chateau has any extra cash it could better be spent improving its position in the Canadian market; and

  • History of Canadian retailers in the U.S. market.

“The historical track record for Canadian apparel retailers and brands has been terrible with the exception of those retailers recently who offer a higher-priced differentiated product. One only has to look at Joe Fresh’s U.S. initiative, including operating its own U.S. stores and opening shop-in-shops in JC Penney as an example of offering a brand that competed with international fast-fashion retailers and had zero awareness in the U.S.market,” wrote Harris in the newsletter.

“The U.S. niche Le Chateau would be targeting, is shrinking. Sales in U.S. department stores have gone down every year this decade. This leaves discount stores and off-price stores as possible target channels for Le Chateau branded products. Both Walmart and Target already have strong private label programs and would certainly not start carrying a brand whose recognition is almost nil in the United States. From this publication’s perspective, Le Chateau is looking to jumpstart its performance by going for a “Hail Mary” and as is the case with similar plays, the odds against its success are somewhere between horrible and bad.

“Instead of targeting the U.S. market, this publication would suggest that Le Chateau take the monies it would have spent on developing a U.S. business and consider: Launching a major advertising campaign similar to its very successful 2015 Le Chateau of Montreal brand refreshing initiative; Upgrading more of its stores to ensure that there does not continue to be a disconnect between the merchandise it sells and the store’s environment; and Re-evaluating its loyalty program to differentiate it in a unique way from its direct competitors (e.g. loyalty points equal concert tickets).

Regardless of Le Chateau’s recent track record, it is still a viable retailer, added Harris. Unfortunately, its niche has been the focus of international fast-fashion retailers including H&M. Undercapitalized, Le Chateau is probably doing the best it can, he said.

Editor’s note: La Presse first ran a French language report in early September about Mr. Harris’ opinions on Le Chateau expanding into the US, and Retail Insider reached out to him for the purposes of this English language article.

Canadian Online Furniture Retailer ‘Article’ Continues to See Explosive Growth

By
Mario Toneguzzi
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PHOTO: ARTICLE

Online furniture brand, Article, which is based in Vancouver, has seen phenomenal growth in recent years and has launched an in-house delivery program in Canada.

It has also expanded its leadership team to enable the company’s next phase of growth.

Recently the company was ranked No. 1 on the  2019 Growth 500 list of Canada’s Fastest-Growing Companies for a second consecutive year.

“Being named Canada’s Fastest-Growing Company for a second year in a row validates the team’s efforts to make it easy for customers to create beautiful spaces,” said Aamir Baig, Article’s CEO. “Our tremendous growth has been fuelled by customer obsession. We seek direct customer input to create a remarkable end-to-end furniture experience, and this approach has led to projects that have made an immediate, positive impact on customers.”

PHOTO: ARTICLE FURNITURE VIA FACEBOOK

The online furniture and home decor brand topped the annual ranking with five-year revenue growth of 24,182 per cent.

“Business has grown a whole lot more wilder than I would have ever dreamed . We’ve had north of 50,000 per cent growth until the year ending 2017 and the 24,000 per cent growth in the year ending 2018. So growth has been brilliant. Been great. It’s really a validation of the underlying proposition and the focus that we brought in delivering an end-to-end customer experience that’s a lot more convenient, a lot more valuable to the end customer. That’s given us a lot of confidence to continue going forward,” said Baig.

“The industry is massive. So I think we’re just the tip of the iceberg here of what the opportunity is. So far we’re certainly proud of the growth we’ve been able to achieve.”

The company started in October 2011 and launched its website in May 2013. There are operations in the United States as well in four different places – Seattle, Los Angeles, New Jersey and Jacksonville.

“We sell you great furniture and make sure you’re going to have an experience that you’re not going to go anywhere else,” said Baig.

PHOTO: ARTICLE FURNITURE VIA FACEBOOK

“We’re a digitally native, vertically integrated online furniture brand. So basically what that means is we design, manufacture, distribute and ship directly to the consumer modern furniture. And we do it all through article.com. There’s only one place where you can buy our furniture. By going direct and eliminating the physical showrooming needs to sell furniture, we’re able to unlock a lot of value that we package back to customers either in the form of better product, better price, faster delivery, more convenience. A combination of it all.”

Baig said 85 per cent of the company’s business comes from the United States. It ships and delivers to hundreds of cities across Canada and the U.S.

“We’re focused on the discerning customer that wants a good product. So higher quality looking for good material, looking for designs that will last,” he said.

“Our mission is to create the easiest way for people to make their space look beautiful. So that includes living rooms, dining rooms, bedrooms, hallways, home office, office spaces. Across the board. And we’re constantly expanding our coverage of those categories.”

PHOTO: ARTICLE FURNITURE VIA FACEBOOK

“Everything that we do is around delivering on a vision of how do we create the easiest way for people to make their space look beautiful. The amount of time people have to go through getting their space looking and functioning like they want at the core Article is about transforming that and making that as simple and as easy as possible,” said Baig.

“With that context, there’s many, many projects and initiatives that we have been working and will continue to work on towards the realization of that vision. The final-mile delivery experience is one of those aspects because the thing about furniture is that you can’t FedEx/UPS this stuff. It’s big products. The product typically needs to be put together. Stuff needs to be moved around in people’s homes and product needs to be put and installed in the right places. So there’s a strong service element to it to getting your place furnished. And what we realized as we went along this journey and studying over thousands of reviews from customers the final-mile delivery is where we were falling short. Most of the time the issues, the reasons, were not of our doing. We were working with third-party carriers. But nevertheless it was still our problem.”

So the company started its own delivery program taking control and ownership of the whole process to make it as smooth, seamless and convenient for customers as possible.

PHOTO: ARTICLE FURNITURE VIA FACEBOOK

“We’re highly encouraged by the program. Our negative complaint ratio in the final-mile delivery reviews is down by 80 per cent in areas we’re doing our own delivery. Our speed to deliver is two days faster. The convenience of scheduling is higher. That program has become quite strategically important for us,” said Baig.

Article also added the company’s first VP of Human Resources and Senior VP of Supply Chain to support growth. Caroline Schein joined Article in the spring with previous roles at Boston Pizza, Best Buy Canada and Vancity, and is responsible for building Article’s people and culture practices across North America. Joining Article from Finning International, Cristian Chavez is Article’s Senior VP of Supply Chain, responsible for developing key supply chain strategies that will directly support the company’s ability to deliver unbeatable value on high-quality furniture and home decor.

The company, which employs more than 350 staff across North America, has been profitable since 2015.

Special Edition 1: ICSC Toronto 2019 Experiences, Insights and Gossip

By
Retail Insider
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exc-5d92af7290f7d444c2cbd8b1

An off-schedule podcast focusing on Craig’s attendance and related news coming out of the ICSC Toronto that happened on September 23-25, 2019.

The Weekly podcast by Retail Insider Canada is available on Apple Podcasts, Stitcher, TuneIn, Google Play, or through our dedicated RSS feed for Overcast and other podcast players.

More about ICSC (International Council of Shopping Centers): ICSC serves the global retail real estate industry providing its 70,000+ member network in over 100 countries with invaluable resources, connections and industry insights and actively work together to shape public policy. For more information about ICSC visit ICSC.com.

Subscribe, Rate, and Review our Retail Insider Podcast!

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