A previously announced overhaul to downtown Montreal’s Hudson’s Bay building, which would have included adding Canada’s largest Saks Fifth Avenue store to the property, has been put on ice. That’s according to an exclusive french language report in TVA Nouvelles, which quoted sources familiar with the situation.
The Hudson’s Bay Company announced in the fall of 2016 that downtown Montreal’s 675,000 square foot Hudson’s Bay building at 585 Sainte Catherine Street West would see an overhaul that would include renovations to the existing store, as well as the addition of a 200,000 square foot Saks Fifth Avenue flagship at the back end of the property, facing Boulevard de Maisonneuve. Saks would have opened in the fall of 2018.
About 80,000 square feet of Saks Fifth Avenue’s 200,000 square foot space would have been dedicated to a ‘Quebec-themed food hall’ — Saks’ other two Canadian stores, both in Toronto, include adjacent food halls operated by local vendor Pusateri’s Fine Foods. Montreal’s Saks would have also featured women’s designer ready-to-wear, handbags, accessories, beauty, men’s, Fifth Avenue Club with private suites/personal shopping consultants and the women’s 10022-SHOE floor, according to a press release.
Montreal was a target for Saks Fifth Avenue from the moment that Saks announced that it was coming to Canada — former HBC head Bonnie Brooks had said that Montreal could see one, if not two Saks stores open in the area. Some speculated that a second full-line Saks store could open at CF Carrefour Laval.
Some are speculating that the downtown Montreal announcement could be because Hudson’s Bay is looking to sell the Montreal Hudson’s Bay building. That’s incorrect says Tiffany Bourré, Director of Corporate Communications at the Hudson’s Bay Company. “HBC does not currently have plans to sell its downtown Montreal building,” said Ms. Bourré in an email response to a request from Retail Insider for comment.
A situation that may have contributed to delaying the downtown Montreal renovation/Saks store is the planned multi-year overhaul of Sainte-Catherine Street West, which will include new sidewalks, furniture and other aesthetic improvements. Many area businesses are concerned that the overhaul will be disruptive to the area for years, negatively impacting retail sales at businesses that are struggling as it is. Luxury brands, in particular, have failed to do the same sales volumes in Montreal as they do in cities such as Toronto and Vancouver, which have seen clusterings of luxury branded stores.
Despite low numbers for luxury brand sales in Montreal, Holt Renfrew has embarked on an ambitious project to merge its Holt Renfrew and Ogilvy stores in downtown Montreal. Located about 800 metres/2,600 feet to the west of the Hudson’s Bay building is the future-branded ‘Holt Renfrew Ogilvy’ that will include about 250,000 square feet of retail space, housing confirmed concessions for luxury brands such as Chanel, Hermes, Prada, Dior, and Louis Vuitton. The merger will result in a smaller existing Holt Renfrew store on Sherbrooke Street West, which has operated on the site since 1937, to close permanently.
There have been delays at the Holt’s/Ogilvy end, as well — the merged superstore was supposed to be unveiled last year, but it’s now been postponed until the year 2020. A Four Seasons Hotel and Private Residences will occupy the north end of the site, with units priced between $4 million and $20 million, averaging $1,500/square foot.
Saks Fifth Avenue entered the Canadian market two years ago when it opened two stores in Toronto. In February of 2016, Saks opened a 170,000 square foot downtown Toronto flagship that occupies part of the Hudson’s Bay Queen Street building that is now part of the CF Toronto Eaton Centre complex. A week later, Saks opened a standalone 143,000 square foot store at Toronto’s suburban CF Sherway Gardens, located near the border of Mississauga. The Montreal Saks would have been in a similar configuration to the downtown Toronto Saks, which operates as a ‘large shop-in-store’ with connections to Hudson’s Bay on all of its four floors.
Saks Fifth Avenue will open its third Canadian store on February 22 of this year at Calgary’s CF Chinook Centre. The 115,000 square foot store will include a restaurant that will open later this spring, though it won’t have a food hall like the two existing Toronto locations.
Saks Fifth Avenue has also said that it wants to open at least one store in Vancouver, though sources say that a search for space is proving to be a challenge. One option would have been to insert Saks into downtown Vancouver’s existing 650,000 square foot Hudson’s Bay building, in a ‘shop-in-store’ configuration similar to that in downtown Toronto, and proposed for Montreal. Late last year, however, HBC struck a deal with co-working company WeWork to occupy the top two levels of downtown Vancouver’s Hudson’s Bay — sources say that it’s now unlikely that Saks could be an option for inclusion, given the building’s new configuration. As well, there are recent reports that HBC could sell the Vancouver store, which some are saying could fetch close to $1 billion.
The Hudson’s Bay Company also operates an off-price division called Saks OFF 5TH, which some might mistake with Saks Fifth Avenue, given the name/logo font. These divisions run separately and the off-price Saks OFF 5TH is confirmed to be opening its largest Canadian location, which will measure close to 45,000 square feet, at a renovated/expanded Montreal Eaton Centre located about a block from Montreal’s Hudson’s Bay store. Saks OFF 5TH already has a Montreal store at the suburban CF Galeries d’Anjou, and more are on the way as the off-price division plans to operate 25 Canadian stores by the end of this year.
I could see Saks Fifth Avenue possibly opening a store in Vancouver at the Oakridge redevelopment that is posed to transform over the next several years. The renderings and scope of the project are magnificent and Oakridge is already the second most productive mall in Canada. Brentwood will also contain a luxury component. Nordstrom and Holts do really well in Vancouver so I believe there is definitely room in luxury market for another player. It’s a shame that Vancouver has to wait so long. I’m hoping for an announcement sooner than later from HBC.
I think this points to the way too fast and over expansion of luxury retail in Canada.
A smaller metropolitan region like Montreal, with not as high incomes as seen in other Canadian cities, just cannot support so much luxury retail. And with the Ogilvy store, Montreal will be well positioned for luxury retail.
Given the poor performance of Saks, Hudson’s Bay would do well to just sell off Saks and focus on the Hudson’s Bay brand, which seems to be doing well.
I hear the downtown Toronto Saks is not doing well at all, except for the food hall.