Saks Canada Secures Flagship Brands Despite Holt Renfrew’s Luxury Dominance

Saks Fifth Avenue‘s Canadian flagship brand mix is almost set and according to company president Marc Metrick, it will feature “a designer assortment worthy of Saks at its best”. Mr. Metrick also revealed that Saks’ Toronto flagship will be 20,000 square feet larger than originally anticipated, though still smaller than Holt Renfrew‘s Canadian flagship. We spoke with HRC Advisory president Farla Efros to get her opinion on the luxury label wars in Canada, including why Holt Renfrew will particularly be affected by Saks’ successes.  

Saks’ Canadian flagship is scheduled to open in early 2016 at Toronto Eaton Centre, occupying four floors at the eastern end of the mall’s Hudson’s Bay building. We recently did an in-depth article describing the store floor-by-floor, including its basement-level food hall to be operated by Pusateri’s Fine Foods. 

Mr. Metrick recently told Women’s Wear Daily: “I feel really good about the brand lineup that we are going to have at the Queen Street store. It’s pretty much set. Our designer ready-to-wear lineup is flagship level, as is leather goods. It represents what Saks stands for.” Mr. Metrick expressed that it is premature to disclose the labels, though he indicated that Saks’ success in securing brands was at odds with Holt Renfrew, which continues to make efforts to fortify its luxury dominance in Canada.  

Mr. Metrick also revealed that Saks’ Toronto flagship will measure an impressive 170,000 square feet, with sales volumes anticipated to be similar to the company’s Bal Harbour (Florida), Boston, Beverly Hills and Chicago locations. If accurate, Saks’ Canadian flagship could see sales in excess of $100 million annually which would be remarkable, considering that about five years ago the massive Queen Street Hudson’s Bay saw annual sales of about $140 million. 

Holt Renfrew’s 50 Bloor Street West flagship measures just under 180,000 square feet in size, according to landlord Morguard. Holt’s Bloor Street overall presence is larger, however, taking into account 3,800 square feet occupied on the ground floor of the adjacent 60 Bloor Street West building, Holt’s personal shopping suites upstairs in the 60 Bloor tower, and the recently opened free-standing 16,500 square foot Holt Renfrew Men’s store at 100 Bloor Street West. In total, Holt’s occupies an estimated 205,000 square feet along Bloor Street West, and it has plans to expand its current flagship over the next several years. 

Not long after Hudson’s Bay Company purchased Saks, buzz had it that Saks would become ‘more luxurious’, including higher pricepoints on a variety of designer products. Mr. Metrick presented a somewhat different point of view to Women’s Wear Daily, saying: “Elevating product doesn’t mean going back to the old nine-box grid, and doesn’t mean focusing on the top of the pyramid. It means delivering fashion. It means delivering quality. It means delivering the product people want”. 

In early 2016, Saks will open a second Canadian location at Toronto’s Sherway Gardens. Saks is expected to eventually operate seven Canadian locations in Toronto, Montreal, Vancouver and possibly Calgary. As well, the company intends to operate approximately 25 of its off-price Saks OFF 5TH outlets in Canada, with eight locations expected to open next year. 

Farla Efros, expert and President of leading retail consultancy HRC Advisory, explained how Saks’ strong, long-term relationships with brands in the U.S. likely helped secure top labels for its Canadian stores. She said that Saks will look to carry similar brands in its Canadian and American stores, so as to not potentially alienate Canadian shoppers who are familiar with Saks in the United States. Ms. Efros also said that that although Holt Renfrew is updating its stores and related operations, the size of Holt’s overall business isn’t large enough to maintain exclusive distribution of some of its top designers — unless Holt’s commits to certain dollar volumes for these brands, which is challenging. As a result, Ms. Efros indicated that it’s no surprise that Saks was successful in its endeavours to secure top brands in Toronto.  

In light of the new competition, Ms. Efros painted a particularly challenging picture for Holt’s. She explained how for decades, Holt Renfrew has been the ‘only game in town’, outside of luxury brands’ free-standing stores. She discussed how brand exclusivity has been paramount to its success and now that Nordstrom and Saks Fifth Avenue are expanding into Canada, Holt’s will need to differentiate itself with better customer service and an enhanced online presence. Holt Renfrew’s ecommerce operations are minimal, though it plans to launch an enhanced website in the coming months. Holt’s will have to evolve its operations across all channels, according to Ms. Efros, as both Saks and Nordstrom will be aggressive in targeting the high-end Canadian consumer — Holt Renfrew’s core shopper.