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Luxury Retail to See Growth in Canada in 2021

Luxury retailers continue to target the Canadian market despite the COVID-19 pandemic. Several are confirmed to be opening stores in Canada this year, while at the same time multi-brand retailers add brands in selected markets. Online channels for luxury brands are also expanding in Canada as ecommerce grows amid lockdowns in parts of the country.

It’s somewhat of a surprising trend given the challenges that the pandemic has created. International tourism has plummeted in Canada and many luxury stores were reliant on a brand-conscious Asian shoppers in years past. It appears that some brands have managed to secure local shoppers that may have gone elsewhere or spent money on other things and as a result, some brands are seeing higher sales during the pandemic than in 2019.

The expansion includes new luxury brand stores that will be opening this year. The Toronto market is leading the trend with several store opening announcements — the Greater Toronto Area is home to more than six million people, some high earners and others very wealthy. This spring, Italian luxury brand Isaia will open at 77 Yorkville Avenue in Toronto and nearby, Miami-based The Webster will open a multi-brand store on Scollard Street. They will join recently-opened luxury stores at Toronto’s Yorkdale Shopping Centre that include New York City-based Thom Browne and Italian brand Golden Goose. The Toronto market continues to see interest from luxury brands with more announcements to come this year, including a first-to-Canada retailer from New York City on Toronto’s famed Mink Mile.

In Vancouver, Thom Browne will open its second Canadian store in a retail space to be vacated by Versace. The Vancouver market, which is heavily reliant on international visitors and cruise ship traffic, is taking a hit as international travel is limited and cruise ships are not permitted to dock in Canada until February 2022. The local market includes thousands of wealthy households that have settled in the city from other parts of the globe, which means there are still opportunities for luxury brands to make money from local residents. Luxury brands have embraced the 1000 block of Alberni Street and adjacent environs, and Holt Renfrew at CF Pacific Centre is home to almost 100 concessions, many luxury brands. The brands contained within Holt Renfrew are said to continue to see strong sales from locals. The storefront of Austrian luxury accessory brand Frey Wille, located a block north of Holt Renfrew on Howe Street, recently shuttered and we also reported last year on the closure of iconic luxury fashion retailer Leone.

The Montreal market saw the addition of Holt Renfrew Ogilvy in the spring of 2019, with the build-out of the 250,000-square-foot luxury store completed in the summer of 2020. The concession-based store acts as a central luxury node for the Montreal area, which otherwise lacks substantial luxury retail streets found in cities such as Vancouver and Toronto. This week, a women’s Prada boutique was unveiled on the third floor of Holt Renfrew Ogilvy which had been shut since December 25 due to provincial lockdowns. Off-White fashions were also added to the store, while at the same time it appears that The Row fashion line for men was dropped by the store according to Retail Insider’s Montreal correspondent, Maxime Frechette, who also noted that the Brioni shop-in-store on the men’s floor will also be closing. A planned Miu Miu women’s fashion boutique on Holt Renfrew Ogilvy’s third floor has been cancelled according to the brand, though Holt Renfrew Ogilvy still remains one of the most beautiful stores in North America, housing an expansive assortment of luxury labels.

Industry talk has it that Italian luxury brand Moncler could open a standalone store in downtown Montreal this year, though we have yet to learn the exact location. At one time, Sherbrooke Street West was Montreal’s luxury address though in recent years it has lost much of its lustre from a retail perspective. A smaller Holt Renfrew store shut on Sherbrooke Street over the summer to coincide with the opening of the new Holt Renfrew Ogilvy, leaving Tiffany & Co. at the Ritz and an Escada store on Sherbrooke Street as the only remaining luxury brands on the street. Rue de la Montagne, extending south from Sherbrooke Street towards Holt Renfrew Ogilvy, features several luxury brand stores including Montblanc and Pavillon Christofle. Last year, Toronto-based multi-brand retailer CNTRBND opened nearby on Crescent Street, carrying pricey brands with an emphasis on streetwear. The Montreal market is home to some very wealthy households — some say that the market spends less on luxury fashions as many embrace style, quality, and value over mere brand names.

The Edmonton market, which lost its Holt Renfrew store in January of 2020, is seeing luxury brands move onto the second level of the ‘main run’ at West Edmonton Mall. A Saint Laurent boutique opened in December and this spring, a 5,000-square-foot Gucci store will join it. Both follow Louis Vuitton which opened in the mall in the summer of 2019, and Tiffany & Co. which was a trailblazer when it opened at West Edmonton Mall in 2013. While not a luxury brand per se, upscale jeweller APM Monaco is confirmed to be opening at the mall, and several luxury brands are said to be in talks to open near the luxury clustering focused around Louis Vuitton. With the shuttering of its downtown Holt Renfrew store, Edmonton is now seeing some of Holt’s more successful brands opening standalone stores at West Edmonton Mall.

While the Calgary market is home to many wealthy households, there will likely be a slowdown in terms of luxury brands entering the market. An array of luxury stores have developed at CF Chinook Centre, including a Louis Vuitton store that opened there in 2019, joining Burberry and several others. In downtown Calgary, the Holt Renfrew store acts as a magnet for those seeking luxury brands with Chanel having opened an impressive street-level storefront at Holts last year.

Nordstrom, for its part, is expected to introduce more luxury brand concessions into the Canadian market. Last week during an earnings call, Nordstrom President, Jamie Nordstrom, said that the retailer is looking to grow its partner and shared revenue from 5% of business to 30%, which means that Nordstrom stores will be seeing more leased brand spaces than in years past. Most of these concession spaces are expected to be for luxury brands, which have seen success in Nordstorm stores particularly in the US and Vancouver markets. Current concessions at Nordstrom in Canada include Christian Louboutin footwear at Nordstrom in Vancouver, Delvaux at the Toronto Yorkdale Nordstrom store, and Gucci at Nordstrom at CF Toronto Eaton Centre — given the closure of the main floor wholesale vendor shops at the CF Toronto Eaton Centre Nordstrom for Loewe, Stella McCartney, and Miu Miu, new high-end concessions are rumoured to be replacing them. Prior to last week’s earnings call, Nordstrom was already beginning to expand its concession offerings when it partnered with SuitSupply in late 2019 to open three shop-in-stores at Nordstrom in Vancouver and Toronto.

The battle of the brands in Canada is ongoing after Nordstrom and Saks entered the Canadian markets several years ago. Holt Renfrew, which for decades was the leading luxury retailer in Canada, went on the offensive and secured LVMH-owned Spanish luxury brand Loewe, in a big way, coinciding with the brand’s reduction at Nordstrom. When Saks Fifth Avenue opened in Toronto in early 2016, it included a Boucheron jewellery boutique which closed last year — the closure coincided with Holt Renfrew opening Boucheron boutiques at the retailer’s Vancouver and Yorkdale stores, both of which are said to be seeing strong sales. The battle of the brands will continue into 2021 as Holt Renfrew looks to maintain its dominance in the market, which means it needs to hold onto its core concession vendors that include Louis Vuitton, Dior, Fendi, Saint Laurent, Bottega Veneta, Chanel, Hermes, and many others.

Several luxury brands that Retail Insider interviewed for this article said that sales were surprisingly strong despite the pandemic. In places where stores remained open, many consumers still stayed away from physical stores. Brands with consumer contacts were able to sell goods through mobile devices via text messaging as well as apps such as WhatsApp and WeChat. Some sales were being shipped overseas according to some sources in stores, as a luxury brand store operating in Canada will most certainly not be selling counterfeits as is a concern in some parts of the world.

Some are predicting a reduction in luxury retail sales in Canada, including a Trendex report covered by Retail Insider in October. That report focused more on luxury apparel, which in some segments will continue to struggle — that particularly includes evening gowns and men’s formalwear, which are less relevant given the lack of social gatherings at this time. Accessories and footwear appear to be another story however, with some brands seeing a spike in sales and some styles selling out entirely. Interestingly, several luxury brands selling t-shirts told Retail Insider last year that they saw a sales spike from young consumers whenever CERB cheques were issued.

Lockdowns could put a further damper on luxury retail sales in parts of Canada if a ‘third wave’ comes to fruition as some are predicting. Mutations of the virus are resulting in concerns that new variants could be more contagious and deadly, which could result in some consumers avoiding stores in months to come — that is, if governments don’t again shut stores altogether. In places where stores are open, the shopping experience is, in some respects, less comfortable given a mandate that face masks be worn and other precautions be taken. Traditionally, high-involvement luxury purchases have been done in store as part of an elevated experience, and now it appears that some of these luxury buyers are willing to buy pricey items online or through an app, at least for now. The future of luxury retail in Canada could end up being a hybrid in-store and online experience, and given the luxury brands that are still interested in entering the Canadian market, we are likely to continue to see new store openings into 2021 and beyond.

Article Author

Craig Patterson
Craig Patterson
Now located in Toronto, Craig is a retail analyst and consultant at the Retail Council of Canada. He's also the Director of Applied Research at the University of Alberta School of Retailing in Edmonton. He has studied the Canadian retail landscape for the past 25 years and he holds Bachelor of Commerce and Bachelor of Laws Degrees. He is also President & CEO of Vancouver-based Retail Insider Media Ltd.

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