Canadian Cities Could Soon Have More Luxury Department Stores than in U.S.

Photo: Holt Renfrew/Janson Goldstein/ICSC/Barneys New YorkPhoto: Holt Renfrew/Janson Goldstein/ICSC/Barneys New York

Photo: Holt Renfrew/Janson Goldstein/ICSC/Barneys New York

With Holt Renfrew‘s expansion and Saks Fifth Avenue’s arrival in February, Canadian cities could soon boast a higher concentration of luxury department stores per capita than most American cities. We spoke with a luxury retail expert to determine if Canada will, as a result, become oversaturated with luxury department stores.

For the purpose of this study, North American luxury department stores included Neiman Marcus, Saks Fifth Avenue, Barneys New York and Holt Renfrew. Bloomingdale’s and Nordstrom were excluded due to their broader focus.

City Metro Population (2014 est.) Luxury Department Stores Number of Luxury Department Stores
Toronto 6.056 million Holt Renfrew (Bloor Street, Yorkdale, Sherway, Square One), Saks Fifth Avenue (Eaton Centre, Sherway, possible 3rd Saks location TBD) up to 7
Montreal 4.027 million Ogilvy/Holt’s, up to 2 Saks Fifth Avenue locations up to 3
Vancouver 2.470 million Holt Renfrew (Pacific Centre, suburban mall), up to 2 Saks Fifth Avenue locations up to 4
Calgary 1.407 million Holt Renfrew (The CORE), possible Saks Fifth Avenue (Chinook Centre) up to 2

After Saks Fifth Avenue opens its first two Toronto stores (in February of 2016) and Holt Renfrew opens its Mississauga Square One location next spring, the Toronto area will boast seven luxury department stores in a region with a population of just over 6 million. Vancouver, with a metro population of about 2.5 million, could eventually see as many as four luxury department stores — Saks Fifth Avenue could open as many as two locations in the area, and Holt Renfrew is said to be speaking with landlords about possibly opening a suburban Vancouver-area location. Montreal (metro population 4 million) could see as many as two Saks locations as well, adding to an already expanding Ogilvy/Holt’s — giving Montreal up to three luxury department stores. And Calgary, with a metro population in excess of 1.4 million, could see two luxury department stores if Saks Fifth Avenue joins Holt Renfrew in Alberta’s largest city.

City Metro Population (2014 est.) Luxury Department Stores Number of Luxury Department Stores
Chicago 9.555 million Neiman Marcus (Michigan Avenue, Northbrook, Oakbrook), Saks Fifth Avenue (Michigan Avenue), Barneys New York (Oak Street) 5
Dallas-Ft. Worth 6.954 million Neiman Marcus (Downtown Dallas, Northpark, Plano, Ft. Worth) 4
Houston 6.49 million Neiman Marcus (Houston Galleria), Saks Fifth Avenue (Houston Galleria) 2
Philadelphia 6.051 million Neiman Marcus (King of Prussia), Saks Fifth Avenue (Bala Cynwyd), Small Barneys New York, downtown 2.5
Washington DC 6.034 million Neiman Marcus (Mazza Galerie, Tyson’s Galleria), Saks Fifth Avenue (Tyson’s Galleria, Chevy Chase) 4
Miami 5.93 million Neiman Marcus (Bal Harbour, Ft. Lauderdale, Palm Beach, Boca Raton, Coral Gables), Saks Fifth Avenue (Bal Harbour, Boca Raton, Dadeland, Palm Beach, Palm Beach Gardens) 10
Atlanta 5.614 million Neiman Marcus (Lenox Square), Saks Fifth Avenue (Phipps Plaza) 2
Boston 4.732 million Neiman Marcus (Copley Place, Natick Mall), Saks Fifth Avenue (Prudential Centre), Barneys New York (Copley Place) 4
San Francisco/Oakland 4.594 million Neiman Marcus (Union Square, Palo Alto, Walnut Creek), Saks Fifth Avenue (Union Square), Barneys New York (Union Square) 5
Phoenix 4.489 million Neiman Marcus (Scottsdale Fashion Square), Saks Fifth Avenue (Biltmore Fashion Park), Barneys New York (Scottsdale Fashion Square) 3
Detroit 4.297 million Neiman Marcus (Somerset Collection), Saks Fifth Avenue (Somerset Collection) 2
Seattle 3.671 million Neiman Marcus (Bellevue), Barneys (small, downtown Seattle) 1.5
San Diego 3.263 million Neiman Marcus (Fashion Valley) 1
St. Louis 2.806 million Neiman Marcus (Plaza Frontenac), Saks Fifth Avenue (Plaza Frontenac) 2
Denver 2.754 million Neiman Marcs (Cherry Creek) 1
Charlotte NC 2.38 million Neiman Marcus (SouthPark Centre) 1
Las Vegas 2.069 million Neiman Marcus (Fashion Valley), Saks Fifth Avenue (Fashion Valley), Barneys New York (Palazzo) 3

For comparison, we analysed American metropolitan areas housing Saks Fifth Avenue, Neiman Marcus and Barneys New York stores. Remarkably, most large U.S. regions have fewer luxury department stores, per capita, than the Canadian cities listed above. Miami is an outlier, featuring an unusually high number of Neiman Marcus and Saks Fifth Avenue locations. Boston and San Francisco also rank highly per capita, though only Miami surpasses Vancouver’s potential density of luxury department stores versus population. A number of U.S. cities larger than Calgary feature only one location for either Saks Fifth Avenue and Neiman Marcus, while Minneapolis (3.495 million), Baltimore (2.786 million), Pittsburg (2.356 million), Portland OR (2.348 million), Sacramento (2.244 million), Nashville (1.793 million), Providence RI (1.609 million) and Milwaukee (1.572 million) have no luxury department stores within their metropolitan regions.

The New York City and Los Angeles regions were deemed outliers and excluded from this study, due to their vast populations and sprawl. 

To gain insight into our findings, we consulted with luxury retail expert Farla Efros, President of leading retail consultancy HRC Advisory. She thinks there will be fallout as retailers fight for market share, with upscale independent retailers first to be hurt due to their small scale. She explained how Americans generally have more discretionary income than Canadians, including higher incomes and lower taxes and as a result, Canada could become oversaturated as Saks Fifth Avenue expands into Holt Renfrew’s domain. Ms. Efros noted that Canada’s population is growing slowly and that our employment rate is volatile, though the low Canadian dollar is keeping Canadians shopping locally in the shorter-term. Increased tourism may help, though China’s economic challenges could ultimately affect the way Mainlanders travel and shop abroad. Ultimately, it will come down to who serves the customer best and who carries the most desirable brands, likely signalling label wars between Holt’s and Saks in Canada in the coming years. 

Canadian Retail News From Around The Web: October 21, 2015

Article Author

Craig Patterson
Craig Patterson
Now located in Toronto, Craig is a retail analyst and consultant at the Retail Council of Canada. He's also the Director of Applied Research at the University of Alberta School of Retailing in Edmonton. He has studied the Canadian retail landscape for the past 25 years and he holds Bachelor of Commerce and Bachelor of Laws Degrees. He is also President & CEO of Vancouver-based Retail Insider Media Ltd.

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  1. I live in Seattle, and I can only comment about Seattle versus Vancouver. Seattle is a much more casual city than Vancouver is. Vancouver is a much more international city that has been open to immigration longer than Seattle has, and everyone there seems to dress up. Here in Seattle, people tend to dress down, and even recent immigrants fit in with their dress after a few years. It’s all quite strange the different dynamics two cities so close to each other have, and each has their charms. But one city having ‘more’ luxury retail may not necessarily make it’s shopping ‘better.’ The vast majority of people will never be able to afford a $5,000 article of clothing, or if they can afford it, may not want to spend that amount. I have several wealthy friends here who could easily shop at Neiman Marcus in Bellevue, but the only money they’ve ever spent there is on lunch. Friends of mine who live in Vancouver,who make far less money, on the other hand, will buy the sales at Holt Renfrew.

    • Thank you for the question, El Jefe. Luxury retail and department stores reflect the expertise and interest of Retail Insider’s Editor-in-Chief, though Retail Insider has reported on various retailers — even Dollarama. We’ll be broadening our coverage in the coming months, though luxury brands are undeniably our passion. For balanced reporting on the industry, we also offer "Canadian Retail News From Around The Web" daily, which provides links to retail news from various sources.

  2. For years I’ve read about rumours about Bloomingdales expanding into Canada. I know this article excludes the retailer but nonetheless Bloomingdales does offer luxury. Any updates or developments on the rumour?

    • Excellent question. Bloomingdale’s appears to have gone ‘quiet’ over the last while, and we haven’t heard much recently about its plans to expand into Canada. It’s our opinion that the market will be saturated and given the luxury offerings in Nordstrom’s Vancouver and, next September, Toronto, Bloomingdale’s would find Canada a difficult market to compete as well as secure top brands.

  3. It really will be interesting to see how the over saturation of the market plays out….on the menswear side, better independent retailers need to shift their buys away from the usual mass market brands (boss, zegna etc)….they need to work with brands that are more exclusive to their stores or they will be eaten alive by these major players entering our markets…any independent retailer still hanging their hat on the Hugo Boss’s of the world will be in for a major wake up call come Fall 16….personally I am glad to see this happen, it forces the independent to become merchants again, rather than lazy sheep who follow the buying patterns of Rosen et al.

  4. There is no doubt that we could potentially see a big issue with over retailed cities here in Canada.

    Sadly, the retailers themselves only see sales numbers, and don’t seem to realize that the high sales numbers in Canadian cities come from a more controlled development than you see in the USA. If we keep up with the uncontrolled development we are seeing right now in the Canadian retail sector, then no doubt we are going to have the troubles you see in the USA, from lower sales per sq foot, to potentially dead malls, and struggling downtown retail areas.

    It still amazes me that luxury stores, in particular, feel they need more than one store in a city.
    Not only does it takes away from the brand cache, but they are just spreading the same amount of sales across more stores.

    Go to any of the big world cities, like London, Paris, etc. They have one grand store for each of the big big name stores. There is only one Harrods, one Liberty, one Pritemps.
    And the one store in each city is grand, large, and offers great selection. They are grand destinations.
    This is what stores here should be trying to attain. Not opening these tiny bland cookie cutter branch stores everywhere. It just brings down the cache of the store.
    Especially Holt Renfrew opening in Square One. That just brought down their luxury cache. They are becoming too common.

    • I tend to disagree with you. If you have been to Singapore, you will see at least 10 department stores lining a shopping single street, set in huge shopping malls with numerous retail outlets. Each of the stores is unique in its own way, ranging from local chains, to Japanese staples, to well-known European ones like Printemps. Orchard Road, located just outside the city’s CBD, has been a very successful shopping mecca since the 70s, and continue to be so, attracting tourists from all around the world to shop and dine there. Vancouver can accommodate quite a few more department stores too, and the only setback is the mentality of planners who think roo small.


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