Ogilvy & Holt Renfrew merger in Montreal: a winning strategy?

Date:

Share post:

By Mounia Ayoub 

Montreal’s Ogilvy and Holt Renfrew stores will merge, forming one of the largest department stores in North America, slated for completion in late 2017. The Holt Renfrew store on Sherbrooke Street will close and the Ogilvy store located on the trendy Sainte-Catherine Street West will be revamped and expanded northward on the site of the former Hotel de La Montagne. It is the only Ogilvy/Holt Renfrew-merged store planned so far in Canada.

Ogilvy and Holt Renfrew are heritage brands founded in Quebec: Ogilvy in 1866 in Montreal, and Holt Renfrew in 1837 in Quebec City. Both now belong to Selfridges Group Ltd., owned by the Weston family of Toronto which also controls Selfridges in the United Kingdom, Brown Thomas in Ireland and 

de Bijenkorf in the Netherlands (and grocer Loblaw Companies Ltd. in Canada). The new department store will take the (long) name in French of Ogilvy, membre de la collection Holt Renfrew & Co.

The purpose of this merger is to boost sales in Montreal by combining and developing the strengths of both stores. As the Vice-President of Holt Renfrew, Joanne Nemeroff, pointed out in an interview with La Presse Affaires, the decision to merge both stores was made after a market study (confidential sources) showed that the Holt Renfrew customers wanted a larger range of products with a new assortment of brands while the Ogilvy customers were asking for a new dynamism. Moreover, according to Mark Derbyshire, President of Holt Renfrew, the strategy of targeting the customers of both stores the same way remains consistent since these customers have a lot in common. “We think we can offer them something bigger in one place instead of two,” as M. Derbyshire stated in his interview with La Presse Affaires.

Current Holt Renfrew store on Sherbrooke St. W

Holt Renfrew opened its store in Montreal on Sherbrooke Street in 1937; historically it has been the go-to place for fashion addicts in search of unique contemporary designer clothing and modern luxury accessories. On the other hand, Ogilvy has the reputation of offering a range of much more classic brands. We will see in the future if the regular Holt Renfrew customers will accept to change their shopping habits and leave the luxury Sherbrooke Street district to make their purchases on the less fashionable Sainte-Catherine Street.

What is more, this merger of the two stores in Montreal should allow the group to arm itself for the coming luxury battle with the arrival of its next big competitor, the New York-based luxury department store Saks Fifth Avenue. Saks was acquired by the Hudson’s Bay Co. (HBC) last November and 7 or 8 Saks Fifth Avenue stores are likely to open in Toronto, Montreal, Vancouver and possibly Calgary in the next few years. Two Saks Fifth Avenue stores should open in Montreal, one free-standing downtown store and one suburban store, possibly at Le Carrefour Laval.

Saks will be the main competitor of Holt Renfrew in Canada as it has the same luxury positioning, carrying the same prestigious brands, from Chanel to Prada to Gucci, including the same trendy designer labels such as Christian LouboutinManolo BlahnikJimmy Choo

 etc. Differentiation will therefore be difficult for both companies in Canada. We have reason to believe this Ogilvy/Holt Renfrew merger in Montreal is likely to facilitate the differentiation process as this new luxury megastore will add the classic, respected and well-established image of Ogilvy to the avant-garde spirit of Holt Renfrew.

Fortunately for the Selfridges Group, Seattle-based Nordstrom does not plan to open any high-end department store in Montreal so far. 

It will open only in Vancouver, Calgary, Ottawa and Torontotaking over the mall’s Sears stores about to close in Canada (the first Nordstrom store in Canada should be opened in Calgary in 2014).

Besides the Saks issue, the other question raised with this Ogilvy/Holt Renfrew merger in Montreal is whether or not the market can support such a luxury megastore given Quebec’s market. With 220,000 square feet, the new Ogilvy/Holt Renfrew department store will be the largest luxury department store in Canada. Yet, according to EnvironicsAnalytics, only 4.1% of the population in Montreal had an income of $200,000 or more, compared to more than the double in Toronto, with 8.4%, and 5.6% in Vancouver in 2013. Moreover, 16.8% of the households earning more than $200,000 a year in Canada were living in Montreal against 44.8% in Toronto and 13.3% in Vancouver in 2013. Therefore one can wonder whether or not there is enough demand for luxury products in the area to warrant such a huge department store in Montreal.

The point is many Montrealers are used to shopping outside the city, whether it be in Toronto, the rest of Canada, or the United States. According to Alecsandra Hancas, Fashion Industry Analyst at the NPD Group, cross-border shopping is a serious issue in Canada overall since it represented an estimated $1-billion loss for Canadian retailers in the year to May 2013

1. Thus Ogilvy and Holt Renfrew’s executives expect that upscaling the luxury offering in Montreal will dissuade these customers from doing cross-border shopping and encourage them to make their purchases in this new Ogilvy/Holt Renfrew megastore instead.

In conclusion, this new Ogilvy/Holt Renfrew megastore will definitely change the luxury landscape in Montreal, and will probably contribute to the retention of the local customers who used to shop outside Montreal. The arrival of Saks in the next years will also upscale the retail market in the biggest city of the province of Quebec. In the meantime, this increasingly fierce competition in the luxury market will affect not only the department stores and their customers but also the suppliers, which will have to figure out how to distribute their collections without compromising past allegiances with Holt Renfrew or Ogilvy and without cannibalizing their current sales.

Mounia Ayoub is a luxury retail, fashion lover and a contributing editor for Retail Insider. Born in Paris and raised in Marseille, in the South of France, she is strongly attached to her Mediterranean roots. With a business background, she has worked for Marc Jacobs in Paris and contributed to consulting services at the French Trade Commission in Toronto for French luxury and cosmetic companies expanding their activities in North America. After living in Japan, New York City, Toronto and Paris, she has found in the multicultural city of Toronto the perfect pied-à-terre for now. 

2 COMMENTS

LEAVE A REPLY

Please enter your comment!
Please enter your name here

More From Retail Insider

Iconic Flo’s Diner in Toronto’s Yorkville Forced to Close After 33 Years Amid Landlord Dispute 

Retail Insider interviewed Flo’s co-owner who discusses the “heart wrenching” situation where he is being forced to close his business that began on Bellair Street in 1991.

Anatomy of a Leader: Teresa Spinelli, Owner of Alberta-Based Italian Centre Shop Ltd.

Spinelli discusses her leadership of the popular retailer which has expanded over the years, describing how she struggled to run the company at first and grew to love it.

Upscale Canadian Fashion Brand SMYTHE Expands with New Standalone Calgary Store [Interview/Photos]

It's the second store location for the Toronto-based brand, which is seeing success with its exclusive womenswear collections.

Toronto’s CF Sherway Gardens Hits Sales Milestone with Exciting Retail Growth and Future Plans [Interview]

The shopping centre is adding new retailers as sales per square foot hit an all-time high, with plans to re-tenant Nordstorm as foot traffic grows following Eataly's opening in the mall a few months ago.

ECS Coffee Opens Canada’s Largest Coffee and Espresso Equipment Gear Showroom and Retail Space in Toronto [Interview]

The new Etobicoke location is unique to Canada if not North America, according to its founder, with coffee roasting, equipment showroom, over 500 varieties of coffee, Youtube studio and various in-store experiences. He has plans to expand the concept nationally.

New Loblaws City Market Opens in Vancouver’s ‘The Post’ Building, Adding Grocery Competition to the Downtown Core [Podcast]

Craig and Lee discuss the opening of a new Loblaws City Market in downtown Vancouver's renovated Post building, and they explore its potential impact on local grocery shopping.

Loblaw Announces $2 Billion Investment in Canada for 2024 with Dozens of New Stores and 7,500 New Jobs [Expert Comment]

The retail behemoth will be growing substantially this year, following backlash over profits as inflation continues to impact Canadians.

Dubai-Based Asian Street Food Concept ‘Wok Boyz’ Expands into Canada with Plans for Multiple Locations [Interview]

The company's founder says the popular concept, with personalized meals, has an opportunity to grow substantially with its high-quality ingredients and theatrical flare, complete with fiery customer-facing woks.

Calgary Surge Basketball Team Launches Innovative Pop-Up at CF Chinook Centre to Boost Community Engagement [Interview]

The retail activation, which opened this month, is resulting in heavier foot traffic in a quieter part of the mall.

Upscale Pusateri’s Fine Foods to Close Yorkville Grocery Store in Toronto After 20 Years

The 5,500 square foot store opened to much fanfare in 2003, with valet parking, private chefs and pricey goods. 

Loblaw and Walmart Could be Forced to Adhere to Grocery Code of Conduct with Legislation [Op-Ed]

Sylvain Charlebois says that it's rare for all of Canada's political parties to agree, signalling a shift that could force grocers to comply amid record inflation.

Factory Direct to Shut All 14 Stores Amid Bankruptcy, Liquidation to Begin Saturday

The company, founded in 1995, is one of Canada’s largest privately owned discount retailers which struggled with declining sales and increasing costs following the pandemic.

What to Expect for the Canadian Retail and Hospitality Sectors in 2024 [Video Interview]

Michael Kehoe provides an expansive overview of what's expected for Canada's retail industry in 2024, and how the commercial real estate industry is becoming more dynamic than ever.

Anatomy of a Leader: David Lui, CEO of Kit and Ace and Co-Founder of Unity Brands

Lui has an extensive background in retail with over 30 years of experience and is known for his award-winning brand transformations, e-commerce and digital knowledge along with his passion for scaling businesses.

Robotic Retail Gaining Traction in Canada, But Some Consumers are Being Left Behind [Op-Ed]

Automated retailers without in-store staff are opening across Canada, such as Aisle 24, RC Coffee and PizzaForno -- but consumers without smart phones, credit cards, or with vision issues may not be able to access these retailers says a researcher.

Oakridge Park Announces 1st Luxury Retailers, Attracting Top Brands to Vancouver [Podcast]

Craig and Lee discuss the latest Oakridge Park announcement, highlighting the addition of luxury and upper contemporary brands to Vancouver's retail landscape and how it will impact downtown.

Interview on What it Takes: Lee Valley Tools Named Top Retailer in Ontario for Customer Service

The company's COO Jason Tasse discusses the retailer's secret sauce for having an engaged workforce, while also discussing plans to expand with more stores and retail concepts.

Survey Data Shows Canadians will Prioritize Romance Over Budget Cuts This Valentine’s Day [Interviews]

David Litwin of Moneris notes that Valentine's is an interesting bellwether for what businesses might expect from consumers for the rest of the year.

Anine Bing to Open 2nd Canadian Storefront at the Four Seasons Hotel in Toronto 

The US-based women’s fashion brand recently opened its first Canadian store at Yorkdale, and will open its second location in a downtown luxury hotel. 

Retail Burnout Crisis in Canada: The Call for Empathetic Leadership and Proactive Solutions Amid Operational Strains [Feature]

It's never been more difficult to work in retail, with store managers burning out amid lower staffing numbers, increased task and store robberies. Two industry experts discuss the situation.

RECENT RETAIL INSIDER VIDEOS

Advertisment

Subscribe to the Newsletter

Subscribe

* indicates required

RECENT articles

Iconic Flo’s Diner in Toronto’s Yorkville Forced to Close After 33 Years Amid Landlord Dispute 

Retail Insider interviewed Flo’s co-owner who discusses the “heart wrenching” situation where he is being forced to close his business that began on Bellair Street in 1991.

Anatomy of a Leader: Teresa Spinelli, Owner of Alberta-Based Italian Centre Shop Ltd.

Spinelli discusses her leadership of the popular retailer which has expanded over the years, describing how she struggled to run the company at first and grew to love it.

Upscale Canadian Fashion Brand SMYTHE Expands with New Standalone Calgary Store [Interview/Photos]

It's the second store location for the Toronto-based brand, which is seeing success with its exclusive womenswear collections.

Toronto’s CF Sherway Gardens Hits Sales Milestone with Exciting Retail Growth and Future Plans [Interview]

The shopping centre is adding new retailers as sales per square foot hit an all-time high, with plans to re-tenant Nordstorm as foot traffic grows following Eataly's opening in the mall a few months ago.

ECS Coffee Opens Canada’s Largest Coffee and Espresso Equipment Gear Showroom and Retail Space in Toronto [Interview]

The new Etobicoke location is unique to Canada if not North America, according to its founder, with coffee roasting, equipment showroom, over 500 varieties of coffee, Youtube studio and various in-store experiences. He has plans to expand the concept nationally.

New Loblaws City Market Opens in Vancouver’s ‘The Post’ Building, Adding Grocery Competition to the Downtown Core [Podcast]

Craig and Lee discuss the opening of a new Loblaws City Market in downtown Vancouver's renovated Post building, and they explore its potential impact on local grocery shopping.

Loblaw Announces $2 Billion Investment in Canada for 2024 with Dozens of New Stores and 7,500 New Jobs [Expert Comment]

The retail behemoth will be growing substantially this year, following backlash over profits as inflation continues to impact Canadians.

Dubai-Based Asian Street Food Concept ‘Wok Boyz’ Expands into Canada with Plans for Multiple Locations [Interview]

The company's founder says the popular concept, with personalized meals, has an opportunity to grow substantially with its high-quality ingredients and theatrical flare, complete with fiery customer-facing woks.

Calgary Surge Basketball Team Launches Innovative Pop-Up at CF Chinook Centre to Boost Community Engagement [Interview]

The retail activation, which opened this month, is resulting in heavier foot traffic in a quieter part of the mall.

Upscale Pusateri’s Fine Foods to Close Yorkville Grocery Store in Toronto After 20 Years

The 5,500 square foot store opened to much fanfare in 2003, with valet parking, private chefs and pricey goods. 

Loblaw and Walmart Could be Forced to Adhere to Grocery Code of Conduct with Legislation [Op-Ed]

Sylvain Charlebois says that it's rare for all of Canada's political parties to agree, signalling a shift that could force grocers to comply amid record inflation.

Factory Direct to Shut All 14 Stores Amid Bankruptcy, Liquidation to Begin Saturday

The company, founded in 1995, is one of Canada’s largest privately owned discount retailers which struggled with declining sales and increasing costs following the pandemic.

What to Expect for the Canadian Retail and Hospitality Sectors in 2024 [Video Interview]

Michael Kehoe provides an expansive overview of what's expected for Canada's retail industry in 2024, and how the commercial real estate industry is becoming more dynamic than ever.

Anatomy of a Leader: David Lui, CEO of Kit and Ace and Co-Founder of Unity Brands

Lui has an extensive background in retail with over 30 years of experience and is known for his award-winning brand transformations, e-commerce and digital knowledge along with his passion for scaling businesses.

Robotic Retail Gaining Traction in Canada, But Some Consumers are Being Left Behind [Op-Ed]

Automated retailers without in-store staff are opening across Canada, such as Aisle 24, RC Coffee and PizzaForno -- but consumers without smart phones, credit cards, or with vision issues may not be able to access these retailers says a researcher.

Oakridge Park Announces 1st Luxury Retailers, Attracting Top Brands to Vancouver [Podcast]

Craig and Lee discuss the latest Oakridge Park announcement, highlighting the addition of luxury and upper contemporary brands to Vancouver's retail landscape and how it will impact downtown.

Interview on What it Takes: Lee Valley Tools Named Top Retailer in Ontario for Customer Service

The company's COO Jason Tasse discusses the retailer's secret sauce for having an engaged workforce, while also discussing plans to expand with more stores and retail concepts.

Survey Data Shows Canadians will Prioritize Romance Over Budget Cuts This Valentine’s Day [Interviews]

David Litwin of Moneris notes that Valentine's is an interesting bellwether for what businesses might expect from consumers for the rest of the year.

Anine Bing to Open 2nd Canadian Storefront at the Four Seasons Hotel in Toronto 

The US-based women’s fashion brand recently opened its first Canadian store at Yorkdale, and will open its second location in a downtown luxury hotel. 

Retail Burnout Crisis in Canada: The Call for Empathetic Leadership and Proactive Solutions Amid Operational Strains [Feature]

It's never been more difficult to work in retail, with store managers burning out amid lower staffing numbers, increased task and store robberies. Two industry experts discuss the situation.