Holt Renfrew president Mario Grauso told WWD in an interview that the decision to shutter hr2 was made so that the company could focus on its “core luxury business”, which consists of seven full-line stores in Vancouver, Calgary, Edmonton, Toronto, Mississauga and Montreal.
Hr2’s first location, measuring about 25,000 square feet, opened in March of 2013 at the Quartier Dix30 retail centre in suburban Montreal. A second location, spanning just over 28,100 square feet, opened in May of 2013 at Vaughan Mills in suburban Toronto.
Both hr2 stores carry an assortment of brands for women and men that are generally at a lower price point than at Holt Renfrew’s main stores. Brands are purchased specifically for hr2 as part of the separate division, though there is also a small selection of clearance product from pricier Holt Renfrew locations. Holt Renfrew operated a clearance centre at Vaughan Mills for a number of years called ‘Holt Renfrew Last Call’, which was replaced by hr2 in the same retail space in 2013.
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Sources say that hr2 was profitable, but that it was out of line with Holt Renfrew’s strategy to be the country’s premium multi-brand large format luxury retailer. Holt’s has recently seen considerable competition from the likes of Saks Fifth Avenue, Nordstrom, and Harry Rosen. Saks opened two full-line stores in Toronto in the spring of 2016, and sources say that the New York City-based retailer has taken some market share from Holt’s. Seattle-based Nordstrom, which entered Canada in the fall of 2014 with a store in Calgary, now operates five stores — including flagships in downtown Vancouver and Toronto, as well as a luxury-heavy store at Toronto’s Yorkdale Shopping Centre. In an earnings call last week, Nordstrom said that its Canadian business in 2016 saw sales of about US$300 million, projecting $1 billion in eventual sales from six full-line stores as well as its soon-to-launch Canadian Rack division. Upscale menswear retailer Harry Rosen continues to renovate stores and expand its designer offerings, while boasting a loyal clientele.
Holt Renfrew’s Mr. Grauso, who became president in September of 2016 after running Joe Fresh, told WWD that there are no immediate plans to develop an alternative lower-price strategy, nor are there plans to open any new full-line Holt Renfrew stores in the foreseeable future.
Hudson’s Bay Company’s off-price concept Saks OFF 5TH plans to operate about 25 Canadian stores by the end of 2018, and it recently announced five more locations set to open this spring. Nordstrom’s off-price Nordstrom Rack will open its first Canadian stores early next year, with plans for between 10 and 15 locations. TJX-owned Winners and Marshalls continue to open stores at an aggressive pace in Canada as well, with no end in sight for their respective expansions.