Calgary’s economy may have taken a beating in the past few years since oil prices collapsed in the latter half of 2014 but its luxury retail market has survived and even made some modest gains.
“In the bubble that is luxury retailing in the Calgary market, the city shines with a cluster of luxe brands in the downtown Holt Renfrew store and an emerging high-end pocket of sizzle at the CF Chinook Centre,” said Michael Kehoe, an Alberta-based retail specialist with Fairfield Commercial Real Estate in Calgary.
“Despite the economic downturn across Alberta, fuelled by lower oil prices and empty downtown office towers in Calgary, luxury retail in the energy capital of Canada is thriving. Regardless of the level of sophistication, there is significant wealth here with a need to show it. Not that we are seeing a luxeplosion the likes of that are rocking markets across Asia but Calgary is witnessing a modest growth in the luxury retailing segment.”
Kehoe said there is a growing cadre of aspirational luxury shoppers across the greater Calgary regional district that include female executives toting their Louis Vuitton or Burberry bags and sporting Rolex watches.
“The market has moved beyond just handbags, designer shoes and jewelry. Calgary luxury retail is catering to all four segments of the luxe market: start of money, show off, fit in, way of life and the super elite shopper who strives for differentiation from the mass luxe consumer. Many super-elite shoppers in Calgary prefer to travel to shop or buy online,” he said.
“CF Chinook Centre peruses luxe with an emerging higher-end tenant cluster led by a new Louis Vuitton store set to open in 2018. The international brands enjoy the synergistic traffic benefits of being nestled in by Nordstrom and Saks Fifth Avenue as the retailing stars align with the Chinook landlord’s vision, patience and deep pockets. Some of the basic elements are in place at Chinook with the city’s only Canada Goose and Tiffany & Co. stores among others. The Chinook Nordstrom store focuses for the most part on their house brands with a mix of designer labels and a Saks Fifth Avenue that is still finding its way.”
Kehoe added that Chinook could double down on luxe and land standalone boutiques like Givenchy, Celine, Gucci, Prada, Moncler, Valentino or the House of Prada’s Miu Miu. Most of these brands are represented at Nordstrom and/or Saks but featuring these brands at CF Chinook would significantly differentiate the Centre from the downtown Holt Renfrew.
“And that is how the luxury shopping battle will be won,” said Kehoe, who is a commercial real estate professional with more than 40 years of experience in the retail real estate field.
Kehoe worked for many years as a mall manager, marketing director and retail leasing executive. He is an Ambassador for the New York-based International Council of Shopping Centres where he has been a member since 1982.
“But that’s starting to change in the last six to 10 months. So we’re starting to get more traction. There was a great global focus on Asia and high tourist areas that that Asian population would frequent from the luxury brands. And now that they’ve kind of filled in that element of their network they’re starting to broaden their reach and look at other markets they feel a need to have a presence in. And Calgary is finally on that radar screen again,” said Schmidt.
“We still have some of the highest average household incomes in the country. Some of the highest disposable incomes in the country. And we’ve seen good success from Nordstrom and some solid initial success from Saks. And that kind of puts it back on everybody’s radar screen in terms of a market that they need a presence in or need to round out.”
Besides Louis Vuitton, Schmidt said a deal has been done with fashion retailer Mackage for CF Chinook Centre.
“We’ve got some other groups but it’s a little too premature (to announce). We’re negotiating with them right now. If you get a critical mass of luxury, it begets more luxury. They like to cluster together. There are true synergies in having flagship stores side by side. It creates a better shopping experience for the customers and the retailers benefit from that,” added Schmidt.