Hudson’s Bay Company-owned Saks Fifth Avenue is marking its first year of operations in Canada. So far, the luxury retailer has opened two full-priced stores, as well as nine off-price Saks OFF 5TH locations under the separately-run HBC division. There are plans for more locations under both banners in Canada over the next several years. Sources say that some of Saks’ market share is at the expense of homegrown luxury retailer Holt Renfrew, while Seattle-based Nordstrom competes with both with an unusually high amount of luxury offerings in its larger Canadian locations.
Saks Fifth Avenue’s Canadian flagship was originally supposed to have opened on the site of the Hudson’s Bay store at the northeast corner of Yonge Street and Bloor Street, at Brookfield’s Hudson’s Bay Centre. The massive Saks would have surpassed 300,000 square feet, making it second in size to the retailer’s Manhattan flagship. Plans were scrapped after Cadillac Fairview offered to buy the flagship Hudson’s Bay building (at Yonge Street and Queen Street) and adjacent office tower for $650 million, with part of the deal involving Saks Fifth Avenue taking four levels of the Hudson’s Bay retail building’s east side. The Hudson’s Bay buildings became part of the massive CF Toronto Eaton Centre complex as a result.
Saks Fifth Avenue opened its new Queen and Yonge flagship on February 18 of 2016, with a sizeable gala held in the store two days prior. The roughly 170,000 square foot Saks Fifth Avenue store boasted luxury offerings comparable to that of Holt Renfrew, located two kilometres north on fashionable Bloor Street West. Saks brought a number of ‘firsts’ to its new Toronto store, including boutiques for luxury brands such as Piaget, De Grisogono, Boucheron, and others — with prices often into the thousands.
A 143,200 square foot Saks opened a week later (February 25, 2016) at Toronto’s CF Sherway Gardens. The store featured some of the most luxurious offerings in a suburban Canadian department store, including shop-in-store boutiques for Nancy Gonzalez, Dolce & Gabbana and Brunello Cucinelli. In-store restaurant Beaumont Kitchen, operated by Oliver & Bonaccini, opened in the store. Foodies were excited when on March 7 of 2016, Pusateri’s Fine Foods opened in the store’s Saks Food Hall, the first of its kind in the world. The beautiful 18,500 square foot space on Saks’ lower level (adjacent to the store’s men’s department) was actually supposed to be the second Saks Food Hall, but construction complications caused delays with the downtown Toronto flagship.
Saks’ downtown Toronto flagship wasn’t totally finished when it originally opened — three luxury brand boutique concessions, a three-level restaurant, food hall and beauty salon had yet to open. In May of 2016, both Prada and Christian Dior opened accessories concessions on Saks’ ground floor. Dior subsequently opened a women’s ready-to-wear boutique on the store’s third floor in September. Oliver & Bonacini restaurant concept Leña opened with 11,000 square feet over three levels in August of 2016, featuring heritage elements, a unique menu, and private dining rooms as part of its offerings. Pusateri’s Fine Foods opened its 24,000 square foot downtown Saks Food Hall in November of 2016, on the store’s concourse level that sees about 55,000 pedestrians pass through on a weekday. The second-floor beauty salon still hasn’t opened. A John Barrett salon was originally supposed to open in the space, but Barrett pulled the plug on a Saks expansion last year amid controversy and litigation.
Hudson’s Bay Company’s off-price division Saks OFF 5TH has been very active in Canada over the past 12 months. In March of 2016, OFF 5TH’s first four Canadian stores opened in Ontario, followed by announcements for several more stores. Saks plans to operate about 25 Saks OFF 5TH stores in Canada by the end of next year. To date, there are nine Saks OFF 5TH stores opened in this country, with another nine locations confirmed to be opening over the next several months.
Saks Fifth Avenue will continue to expand its full-priced stores into Canada in 2018, with two confirmed locations as well as plans for others. In early 2018, Saks will open a 115,000 square foot store at Calgary’s CF Chinook Centre — one of Canada’s most productive malls, which also saw the opening of Canada’s first Nordstrom store in September of 2014. Saks also recently announced that it would open a 200,000 square foot downtown Montreal flagship at the back end of its 655,000 square foot Hudson’s Bay flagship in early 2018, featuring an 80,000 square foot ‘Quebec-themed’ food hall as well as luxury fashions for men and women.
A full-priced Vancouver Saks store is almost guaranteed, according to sources in the company, though a search for real estate is proving to be a challenge. Saks would ideally like to be in downtown Vancouver, though it requires between 100,000 and 200,000 square feet of appropriate retail space. If that can’t be found in a timely manner, Saks could end up occupying part of the city’s 637,000 square foot downtown Hudson’s Bay, though that’s not a first choice, according to sources.
While parent company Hudson’s Bay Company won’t provide sales numbers for its Canadian Saks Fifth Avenue operations, sources confirm that its downtown Toronto flagship is seeing increasing sales numbers, both from in-store shoppers as well as private shopping and in-home visits. The store may be taking market share, as Toronto’s luxury retail sees unprecedented competition.
In the fall of 2016, Nordstrom opened two Toronto stores — a 220,000 square foot CF Toronto Eaton Centre flagship, as well as a 200,000 square foot Yorkdale Shopping Centre store. Both locations are remarkably luxury-heavy in their offerings, particularly in designer leather goods and women’s ready-to-wear. Sources say that Saks and Nordstrom are likely responsible for reduced sales numbers at homegrown competitor Holt Renfrew, which operates three stores in the Greater Toronto Area. Saks could open a third Toronto store according to sources at Hudson’s Bay Company, and Nordstrom will open its third Toronto store in September of this year, creating intense competition in a market with a population of about 6-million.
Saks’ disruption will continue, as mentioned above, with new stores in Calgary, Montreal and, at some point, Vancouver. All three markets feature Holt Renfrew flagships, and all three markets will see increasingly fierce competition for regional luxury dollars in the years to come.