He spoke to Retail Insider recently about his career and the state of the retail industry in Canada.
Retail Insider: Can you tell us a little bit about your career?
Bedos: “I started work in the luxury goods industry in 1988 and at the time I was studying business and law and I needed to pay for my student accommodation in Paris. So I started a student internship at the Cartier international head office in Paris. And this became something much more. From graduation I was very privileged that in June 1988 Cartier offered me a job and I’ve been in the industry ever since.”
Retail Insider: Over the years, what has been the reason you’ve enjoyed the retail industry?
Bedos: “I started from a jewelry company and watches. I was working in the watch division and gradually I moved into marketing and merchandising and actually Cartier International after four years sent me to London in the UK and this is where I started retail because the Cartier London company was managing a network of stores, obviously Cartier stores, but also a wholesale division where we were selling Cartier watches to jewellers in the UK. This is where I discovered the nitty gritty of the retail industry.”
RI: Pre-COVID 2019, what was business like for Birks?
Bedos: “Pre-COVID, we had a very good year. We got hit by COVID at the time when we were finishing our fiscal year. Our financial year ends on the 30th of March . . . We were finishing a very strong year that was essentially due to the fact that we had spent many years renovating our retail network, working very hard on positioning the Birks brand on the Canadian market and investing in store renovations. We had and still have an optimistic view on the market for hard luxury, hard luxury being jewelry and watches. We invested a lot in our renovations throughout Canada.”
RI: As we come out of COVID, what is your outlook for the industry?
Bedos: “We have worked on finding 10 major trends in the industry moving forward - not just short-term coming out of COVID but also long-term. There is obviously an increase in digital and we see our internet sales, our e-commerce sales, how much business has increased on the digital side. I don’t think this is going to reverse back. People have learned to change their shopping habits whether it’s young generations or older generations . . . Less technology savvy people have now discovered e-commerce and the convenience of it. E-commerce will keep increasing in our view.
“There is also another trend which is clear and impacts our luxury goods industry which is a decrease in international travel. For quite some time, we’ll have lower inbound visitors in Canada. The flip side of that coin is that the Canadian people who used to travel a lot internationally and probably shopped for luxury outside of Canada will probably discover luxury retail in Canada and come to Birks. They used to probably shop elsewhere . . . We see great potential in actually increasing our penetration in this domestic market in Canada through this population of affluent consumers who will travel less outside of Canada.”
RI: How many stores are there in Canada? Any plans of expansion in terms of the number of stores?
Bedos: “We currently have directly-operated stores 28 stores from East to West. We don’t have plans for expansion. Not at the moment because what’s on top of our expansion program is actually to increase the penetration of our wholesale distribution in Canada and outside of Canada. With the Birks jewelry brand we have a significant program to develop a network of independent jewellers throughout Canada and our strategy so far has been to open independent jewellers where we used to have a store in the past where Birks used to cover the entire Canada and was present in almost every community in Canada.
“I’m talking here about 20, 30 years back when Birks had probably close to 100 stores in Canada. It’s no longer the case. We are focusing our investments very much in urban areas, around the big urban centres like Vancouver, Calgary, Toronto, Montreal. And outside of those areas we have very successfully actually opened those with jewellers who are very happy to have the Birks brand within a multi-brand environment and we are very successful.”
RI: On a personal note, when we have a crisis like we’ve seen currently and a few years ago with the financial crisis, how do you as an executive deal with things like that in making decisions?
Bedos: “I have a very close team. I am very privileged because we meet every day over webinars obviously. Video conferencing has kept us very close as a management team. We address every aspect of our business. The question for us was very much during the last three months to allow investment in e-commerce. Very important. Having to find trends as I mentioned before and trying to keep a vision above and beyond the pressure of the super short-term where we have to manage the crisis is like being in the trenches and trying to cope with the everyday challenges.
“We need to keep a long-term vision with direction because if we don’t have a direction we don’t know where we are going. That’s why we’ve been keeping an eye on industry trends. One of those trends actually is because of the COVID what is called experiential luxury, ie. travel as I mentioned but also restaurants, hotels, spas, luxury experiences, all of these have decreased dramatically and we believe there is a very strong opportunity for jewelry to replace experiential luxury because people need to consume. They need to please themselves. They need to please someone. They need to gift. They need to show their love, their appreciation.”
RI: Any final thoughts?
Bedos: “I personally find it challenging how difficult it has been to obtain support for the retail industry in Canada especially. We’ve been looking at initiatives from governments all over the world and Canada’s been proving to be a difficult place for retail because so far we haven’t seen a significant subsidy program from the government and the landlords are very powerful in Canada, especially the mall owners, shopping centre owners. I wish there would be more collaboration within the industry between retailers and landlords in order to find a common solution. I truly believe if we don’t collaborate between Canadian landlords and Canadian retailers what we are going to see is a high risk of bankruptcies and retailers going under protection and that is not good for Canadian retail because we’re doing the work and preparing the ground for foreign retailers and especially very big e-commerce retailers to take over from Canadian symbols.
“The risk is the loss of Canadian identity within our malls because if too many retailers go down due to the lack of support and help from landlords or from the government we will have a lot of vacancy, the commercial value of malls is going to decrease. Who is going to replace the vacancy? Is it international very powerful retailers? Is it no one? And therefore creating a landscape and an ecosystem in Canada where the Canadian retailers will be very few and will have to fight against very strong retailers from the U.S., from Europe and from Asia and fighting big players whether Amazon or Alibaba.
“I don’t want this to be a lost battle. I think the Canadian retail industry should really act together - both retailers and landlords together with the federal government - to actually support the future of the Canadian retail industry. Strangely and surprisingly I have found it striking because it seems to be very difficult to reach an agreement. It’s simple. It’s not rent relief. It’s about supporting retailers who don’t have enough cash sometimes to survive more than two or three months.”