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Hudson’s Bay Reveals Store Design Shift with Montreal Flagship Redevelopment Announcement

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The Hudson’s Bay Company has provided some initial insights into the future of its physical department stores in Canada. On Monday in a joint statement, HBC and RioCan formally announced the redevelopment of the downtown Montreal flagship Hudson’s Bay store which will see an overhaul to become a ‘store of the future’ as consumers increasingly shift spending online.

“We are reimagining the Hudson’s Bay retail experience in Downtown Montreal, creating a digitally-connected store with elevated service and a curated assortment to showcase the best of what Hudson’s Bay has to offer,” said Iain Nairn, President and CEO of Hudson’s Bay.

“This project presents an opportunity to establish a multi-functional store that continues to offer the brands and services that Canadians trust us to deliver, while developing new uses for space — such as showrooms or concierge services — that reflect the modern lifestyles of our customers and the vibrancy of Downtown Montreal.”

Iain Nairn

The shift addresses a rapid consumer movement online at a time when Hudson’s Bay is also enhancing its overall digital operations. TheBay.com is launching a new Marketplace with more than 500 vendors as the retailer continues to shift its operations amid the COVID-19 pandemic.

The Hudson’s Bay Company is already capitalizing on its ecommerce assets, including spinning off Saks Fifth Avenue’s Saks.com website into its own business. No similar announcements have been made for the Canadian website which is one of the most visited in Canada in terms of overall web traffic.

The Oakridge Centre Hudson’s Bay store in Vancouver, which shut early this year and is set to reopen in 2024 after the shopping centre overhaul is completed, will also feature the ‘store of the future’ fit out, with digital technology being used to enhance the overall customer experience. This will include a showroom concept that connects to HBC’s extended aisle and marketplace offerings with enhanced pick-up and return options to create a more seamless consumer experience. Given the significant investment required to update its stores, analysts are saying that it’s unlikely that Hudson’s Bay will continue to operate all 87 of its current stores. Locations in downtown Winnipeg and Jardins Dorval in Montreal shuttered recently and a downtown Edmonton location is set to close next month according to staff.

Prior to the pandemic, sources confirmed that Hudson’s Bay was in talks to launch concession departments within its stores, including bringing in outside operators to manage jewellery and footwear departments. It is unclear if the private company will continue on that path given the pandemic and some of the financial challenges that the company has faced amid declining sales at its stores that were shut due to lockdowns.

Hudson’s Bay is taking advantage of its vast real estate with plans to capitalize on the value through redevelopment and other means. “As consumers continue to evolve the way they live, work, and shop, we are committed to capitalizing on these shifts, while unleashing the full potential of our prime properties throughout North America and reinvigorating the urban districts in which they are situated,” said Ian Putnam, President and CEO, HBC Properties and Investments. “HBCPI is excited to lead the way to unlock the value and potential of our joint venture portfolio for our most significant flagship properties throughout Canada.”

The Montreal store redevelopment, which Retail Insider reported on in February, will see an overhaul of The Bay store that will include a reduction in size to about 295,000 square feet. The retail building currently spans 655,000 square feet and was built in phases between 1891 and 1960 for retail tenant, Henry Morgan, which operated there until 1972 after being acquired by the Hudson’s Bay Company.

The Hudson’s Bay Company and RioCan own or control 10 properties comprising more than three million square feet in Canada, including the downtown Montreal Hudson’s Bay store. Costs for redevelopment will be shared on a proportionate basis with Hudson’s Bay owning 79.8% of the partnership and RioCan having the remaining 20.2%.

Jonathan Gitlin, President and CEO, RioCan, said, “RioCan is looking forward to the transformation of this iconic property to meet evolving consumer and office user expectations. This highly-attractive, transit-oriented site in the heart of Downtown Montreal will be revitalized and expanded with resilient uses and offer forward-thinking amenities driving value creation for the long-term.”

The Downtown Montreal mixed-use redevelopment project will include the construction of a 25-storey office tower of approximately one million square feet as well as the transformation of Hudson’s Bay’s existing retail space. HBC says that it is working closely with the City of Montreal and other stakeholders to finalize details.

The heritage building’s original architecture will be protected, including restoration of the facades, the reopening of windows, and the return of display window showcases to their original state. Four tiered terraces will be created on the four green roofs of the office tower. The main entrance and tallest part of the tower will be on the de Maisonneuve Boulevard side of the complex which had been intended for a 200,000-square-foot Saks Fifth Avenue store that never came to fruition after being announced in 2016.

A public consultation process is now underway for the downtown Montreal Bay redevelopment. The project is expected to be underway by 2023 with completion targeted for 2027. The Hudson’s Bay flagship store on Sainte-Catherine Street will continue to operate throughout the construction process according to the company.

The office tower, which will be clad in a glass curtain, will be “among the most avant-garde in Montreal and will represent the future of the workplace”, according to HBC in a statement.  “The Partners will focus on employee well-being and concern for the environment, while respecting the heritage of the flagship building.”

The new tower will satisfy LEED standards and will feature large, flexible floor plates of up to 60,000 square feet as well as high ceilings and a biophilic design that will allow for maximum natural light exposure.

“The Hudson’s Bay redevelopment project represents the next chapter in HBC’s retail history and its continued commitment to Montreal,” said Richard Hamori, COO, Streetworks Development, the real estate development arm of HBC Properties and Investments. “We intend to honour the heritage of our flagship building, as well as that of historic Sainte-Catherine Street, while expressing our confidence in the future of Montreal’s downtown. This project is another step towards our goal of maximizing the value of our portfolio of downtown properties throughout North America, while diversifying our holdings to a mix of retail, residential and office space.”

The Montreal redevelopment is part of a larger revitalization of the area surrounding Philips Square which itself is seeing significant improvements. Sainte-Catherine Street is undergoing a multi-year overhaul as are Ivanhoé Cambridge properties such as Montreal Eaton Centre and Place Ville Marie.

Article Author

Craig Patterson
Located in Toronto, Craig is the Editor-in-Chief of Retail Insider and President/CEO of Retail Insider Media Ltd. He is also a retail analyst and consultant, Director of Applied Research at the University of Alberta School of Retailing in Edmonton, and consultant to the Retail Council of Canada. He has studied the Canadian retail landscape for over 25 years and he holds Bachelor of Commerce and Bachelor of Laws Degrees.

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1 COMMENT

  1. Excellent news! I can’t think of a better location for HBC to invest its money. If the result resembles the renderings, this will enhance not only the store but the surrounding area, especially with the ongoing work on Sainte Catherine Street and Phillips Square. Perhaps, the project will take some design cues from the Holt Renfrew Ogilvy renovation down the street, especially by uncovering some windows and removing that ugly canopy. Along with on-line enhancements, a general refreshing is called for across the chain in its physical manifestation too, and it is satisfying to see HBC recognize this.

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