Craig and Lee discuss the fierce rivalry unfolding between Toronto’s Bloor-Yorkville and Yorkdale Shopping Centre in the realm of luxury retail. Delving into the nuances of this competition, they highlight the contrasting strategies and advantages each entitiy brings to the table. While Yorkdale’s dominance owes much to the streamlined approach offered by its single landlord, Oxford Properties, and its climate-controlled environment that appeals to shoppers during harsh Canadian winters, Bloor-Yorkville’s allure rests on its unique offerings and potential for a personalized shopping experience. Craig and Lee also draw parallels to similar trends in the United States, where luxury shopping has transitioned from vibrant downtowns to suburban malls due to shifts in consumer preferences and city landscapes.
Moving beyond Toronto’s borders, the hosts elaborate on luxury retail expansion in cities such as Vancouver and Montreal. They spotlight upcoming developments like the Oakridge Park in Vancouver and Royalmount in Montreal, both poised to reshape luxury shopping landscapes in their respective regions. The conversation shifts to the challenges posed by fragmented property ownership in Bloor-Yorkville, contrasting with the more cohesive approach of shopping centres like Yorkdale. As Lee aptly points out, navigating through individual building owners and their unique personalities can complicate retailer placement and leasing negotiations, underscoring the distinct advantages of mall environments for luxury retail expansion.
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Transcript
Announcer 0:00
This is a Retail Insider Podcast. You’re listening to “The Weekly”.
Lee Rivett 0:08
Welcome to this week’s episode of “The Weekly” by Retail Insider. I’m Lee Rivett and I’m joined with the owner and publisher of Retail Insider Media, Craig Patterson, to discuss this week’s most read articles on retail-insider.com. So thanks for joining me, Craig.
Craig Patterson 0:22
Hello, everyone.
Lee Rivett 0:23
Now in our last article on Yorkdale getting a luxury expansion. We didn’t touch upon the Yorkville impact where traditionally a lot of the luxury retailers would be showing up there. So and again, not to confuse the Toronto “Yorkdale Shopping Center” with the “Yorkville shopping neighborhood” that’s outside. But Craig, where would you like to start?
Craig Patterson 0:43
One thing in the article that I didn’t address was Bloor-Yorkville, these updates to Yorkdale are exciting. This is really interesting in terms of what’s happening with luxury retail but I think to a degree this is also a little bit at the expensive of the Yorkville area and Bloor Street because the shoppers that are going up to Yorkdale to buy these expensive things at these new stores (especially the ones that are coming). If Yorkdale wasn’t there, they’d all be going to Bloor Street basically and Yorkville Avenue. That’s where all the fancy stores would be. Yorkdale certainly dominating. There’s a lot of stores up there that are not in Bloor Street. I have been told that a good number of the stores that may have opened first at Yorkdale will eventually make their way down to Yorkville and that Toronto was a “two store town”, I guess you can call it that but nevertheless, I think the Bloor-Yorkville area, I mean if you’re seeing an amplification of VIP programs and of the valet parking and have this experience at Yorkdale – I think Yorkville needs something like that as well.
Craig Patterson 1:40
But it’s it’s harder because Yorkville has independent landlords, it’s you know, a neighborhood with all kinds of different buildings, it’s not connected, it doesn’t have one landlord like Oxford Properties. So Yorkdale definitely has that advantage. And so you know, it’s gonna be interesting again to see how this plays out with Yorkville versus Yorkdale
Lee Rivett 1:58
And do you think this is unique to the Toronto area?
Craig Patterson 2:01
That’s happening in Toronto this is going to happen in Vancouver and Montreal next year and into 2025. I’ve talked about this before but Vancouver’s getting the Oakridge Park which is the overhaul of the Oakridge shopping center. It’s going to have lots of like two luxury stores. I think also about 100,000 square feet I think in total – so Yorkdale will have more in terms of square footage. I think Chanel and a few others are coming to Oakridge Park so this is exciting. And then in Montreal I’ve talked about this quite a bit but Royalmount is going to have also I think somewhere 100 or 150,000 square feet of luxury retail. They’ve named a few of the tenants – Louis Vuitton, Saint Laurent, Gucci, Tiffany and I think a few more like Jimmy Choo and Versace – there you know there’s a few others that I saw on the floor plan. I think Prada. I shouldn’t be naming these but there’s gonna be more expensive stores coming to Royalmount. So again, we’re gonna see the split or even perhaps the suburban dominance in the shopping center. And in Retail Insider the magazine. I wrote a very in depth article on this. So we’ll be posting this in Retail Insider.
Lee Rivett 2:59
And it’s the same thing unfolding in the United States?
Craig Patterson 3:03
The United States is a little bit different because in Canada, we still have these vibrant downtown’s, at least in Toronto, Montreal and Vancouver, in United States doesn’t have many cities left the vibrant downtown’s that support luxury retail I think there’s like five American cities and those would be San Francisco, Chicago, Boston, obviously Manhattan, Washington DC, – there isn’t much else out there. You know you with the downtown in an American city. So really, the luxury shopping in American cities is now in the in shopping centers. And usually in the suburbs. That’s where the fancy stores are. So in Canada, having Toronto, Montreal and Vancouver getting these luxury shopping centers in the suburbs, or having an addition of more luxury to existing shopping centers is really Americanizing these cities. And I just hope it doesn’t result in our downtown’s getting killed, or at least suffering significantly. That’s been, I think, a benefit to Canada as having these vibrant downtown’s. I mean, we’re definitely compared to United States doing better in terms of having vibrant downtown cores in major cities. Mainly again, Toronto, Montreal and Vancouver.
Lee Rivett 4:11
Looking at the American versions of Yorkdale Are there any that come to mind that we just want to highlight before we get into the wrap up?
Craig Patterson 4:18
Yorkdale isn’t certainly in a silo in terms of what it’s doing. We’re seeing some American shopping centers also adding more luxury retail so this is you know, Toronto is not the only city in the world where this is happening. I was recently reading (I want to do a little bit more reading and then I want to visit when it happens) is the Scottsdale Fashion Square in suburban Phoenix is taking the wing where Nordstrom is and turning it into a luxury wing with an even bigger Hermes store. I can’t wait to see this when it’s done because it’s it sounds like it’s gonna be another really innovative project that’s going to repurpose a whole bunch of retail space. We’ve seen this in different cities in California with Westfield Topanga center, a University Town Center in San Diego. Westfield Valley Fair in Silicon Valley, or Santa Clara added a whole bunch of luxury stores of the Bloomingdale’s. It wasn’t super recent, but it’s been the last within the last few years that we saw that progression happening. So it’s happening around the United States as well with with shopping centers.
Lee Rivett 5:16
Let’s just focus our last two questions here on just Yorkville and Yorkdale in Toronto. And firstly, like, imagine a normal winter in Toronto. It’s minus 30 degrees, it’s snowbanks everywhere, its blowing snow and you have this luxury shopper that’s potentially going to the Yorkville shopping street, and then having to go from one store, trudge through the elements to be able to schlep into the next door to the next door in the harshness of the Canadian winter. So that is a hard sell versus let’s say, just rolling up in a covered parking lot in Yorkdale Shopping Mall, you valet park your car and then be able to go from store to store in a covered heated comfortable environment. So the question for you, Craig is how is that going to be overcome by Yorkville – when its a shopping area/street that is in the elements of the Canadian winter?
Craig Patterson 6:10
I don’t even think I have to answer this question. I think we know the answer. I live in Yorkville, the downtown area where you know, I have to deal with the elements. I mean, no, you’ve hit it bang on – Yorkdale Shopping Center has valet parking. You drop your keys off and go into the mall. Honestly, because I don’t I don’t drive a car in the city. I take the subway up to Yorkdale. But I know there was valet in a great parking area under Nordstrom. So Nordstrom is closed, of course. But I so I don’t know what’s happening down there. But nevertheless, that opportunity is there if it’s not being utilized. I just haven’t looked to be honest, because it’s not relevant to me. Wintertime at Yorkdale. I mean, it’s climate controlled. It’s always a certain temperature in there and that temperatures comfortable for almost everybody. I’m sure. That’s the way it’s designed. It’s minus 20 in Toronto, and you’re walking down Bloor Street, it’s not fun. Yes, they clean the sidewalks of snow but it’s chilly. And it’s again it’s unpleasant. This is Canada. Let’s let’s face it. This is we don’t have great weather here. This is a huge advantage for Yorkdale. And then when do people do a lot of their shopping? It’s before Christmas. And yeah, that’s typically not the best weather in Canada. I mean, Toronto is not as chilly as Edmonton and Calgary, Winnipeg and at that time of year, but it’s still not the most hospitable weather.
Craig Patterson 7:31
Yorkdale definitely has some advantages, other advantages that Yorkdale has, as well as I mean, among other things, a lack of vagrancy I mean, I know there’s been the odd shooting and there’s been you know, a few issues here and there at Yorkdale. But Bloor-Yorkville has respite centers, you’ve got the mentally ill that walk around doing things (screaming), you’ve got vandalism, there is sometimes a little bit of at least a perception of a lack of safety. And yeah, there’s incidents that happen. I live in the neighborhood, I can tell you exactly what happens here. It’s not always pretty. And again, this is another reason why I think Yorkdale has an advantage over Yorkville is among many other things is the fact that they can control who comes in and out of that property. And because of the laws of Canada, people can freely come in and out of Bloor-Yorkville as they want. And that can be any type of person that you want. And there’s a lot of panhandling and there’s a lot of drug use (I shouldn’t say a lot but there it does happen and it happens openly).
Craig Patterson 8:28
You brought up a good point here, be it whether it be it just even personal safety or just the environment generally. Another thing again with Bloor Yorkville is – it’s great that Toronto is a boom town. It really is. It’s one of the world’s leading boom towns in North America. I think it’s the fastest growing city, but that means there’s a lot of construction. I mean, Bloor Yorkville is just basically a construction zone right now. And that’s not the most pleasant thing to be and I granted Of course, Yorkdale has a lot of construction, with its new stores coming but it’s not this obnoxious condominium construction, you know, the sidewalks on Bloor Street and other parts of the neighborhood in Yorkville are, you know, hard to pass through because there’s so many stores being built right now and it’s really, really exciting stuff. You know, new Lululemon, new Arc’teryx, new Brown Shoes, it’s just endless – Van Cleef and Arpels, Rolex – there’s all these stores under construction literally right now – but you just got to navigate those sidewalks. So all together the experience is not quite as nice as Yorkdale – I guess you would say. At the same time, I encourage people to come to Bloor-Yorkville and shop because there’s stuff down here you can’t get at Yorkdale. There’s a Hermes store for example. And also I believe that Van Cleef and Arpels is going to be carrying the high jewelry line that you won’t be getting at Yorkdale so I you know, the product might be a little different and maybe a little more expensive than Bloor-Yorkville so I think that the stores downtown are counting on rich people in places like Rosedale and Forest Hill and some tourists (high spending ones) coming in and shopping So, and hopefully that continues again because I don’t want to see Bloor-Yorkville fail – and also I don’t want to see Yorkdale fail and it won’t. Together this creates a double node situation for luxury retail in Toronto.
Lee Rivett 8:28
And just to wrap up the podcast, what’s your final thoughts on having a single landlord like Oxford Properties for Yorkdale versus having individual building owners for every single like building on Yorkville Avenue in Bloor Yorkville?
Craig Patterson 10:29
Yeah, I mean, having one individual landlord at Yorkdale is certainly an advantage because and I can use the new luxury wing, the center run, as a great example because what Oxford Properties is able to do is basically just take out all the demising walls – all the little individual stores that had been there before – they can just clear the walls in between and basically start afresh. Or they can take a spot they where Club Monaco was and say, “Okay, Club Monaco, you go up here, we’re putting Ralph Lauren here”. That’s what happened. That’s the new tenant for the former Club Monaco space at Yorkdale. And so Oxford Properties has the ability to control that space to give a brand what space it wants, say in this new luxury wing or to move brands around. It’s got all that flexibility. On Bloor-Yorkville, you’re at the discretion of all kinds of different landowners and building owners and some of them have different personalities and some of them are more interested and some are disinterested, and may leave a building sitting empty, they may want a certain rent. I mean, it’s much more complicated for brokers to do deals and put tenants into buildings in Bloor-Yorkville, because you’re dealing with existing buildings, of certain sizes on certain pieces of land, with different owners. Some of the buildings might be older, some literally like where Dolce Gabbana recently was closed was a house or two houses, it’s kind of hard to tell, because it’s been modified so much, but literally was a residential building 100 years ago probably. And so dealing with all of that is really quite complicated. And it works. I mean, you see big cities in Europe, and of course, it works there. Take a Strauss in Frankfurt, or Oxford Street in London. They’re all individual landlords for the most part, maybe there’s a landlord owning a few buildings, but they’re putting tenants in there, that’s much harder to do than a shopping center, where it’s almost like “fill in the lines and do what you want” type of situations. So if I had a choice of being a mall landlord and having to do a bunch of deals on a street in a city – Dear God, of course, you’re going to go with the shopping center, because it’s just got so much more flexibility, it’s just easier.
Craig Patterson 12:45
It’s it’s all around just gonna be a simpler process. Overall, to put retailers in a place like Yorkdale Shopping Center (or any shopping center) versus trying to navigate the ownership and landlords in a major urban center where you got all kinds of different buildings. So, again, I mean, this is a score-one for Oxford Properties, they’ve got an advantage here, I think, and that’s why I think Yorkdale has really taken off is the Oxford Properties has been able to create this mass clustering of brands and has been able to do it both with the flexibility of having that opportunity to do what it wants with that space. And also having all of the sales numbers from the stores that it’s able to show other brands and say “You should come here too, because Cartier does really well and Gucci does really high sales”. So that’s why we’re seeing even West Edmonton Mall succeeding. Downtown Edmonton has essentially died. No more luxury shopping downtown Edmonton essentially – other than a few stores that might be have some high end brands and who knows for how long. Triple Five, the owner and landlord of West Edmonton Mall, can say our Louis Vuitton or Gucci and Saint Laurent are doing very well. Tiffany’s a top producer. They’ve got these sales numbers and they can take space, they can move retailers around and say “Hey, come in here and move in here”. So, we’ll be reporting on Montclair opening a store at West Edmonton Mall and a couple of others that I won’t name yet. But it was much easier to do this than say if this was a bunch of buildings on a street.
Lee Rivett 14:17
Fair enough. And thanks for going through and talking about Yorkville versus Yorkdale. And as well as even going into a little bit further into the United States and such. And I’m looking forward to chatting more about all the different various things and otherwise, we’ll see you next week. Craig.
Craig Patterson 14:31
Thank you so much, everyone for listening. Take care and bye for now.
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