UK-based beauty apothecary concept Space NK is launching an initial three physical shop-in-stores in Hudson’s Bay flagships this fall with an online presence beginning immediately. The long-term strategic partnership could be the beginning of other national brand partnerships with Hudson’s Bay stores.
The first three physical Space NK wholesale shop-in-stores will be at Hudson’s Bay stores in Toronto, Montreal and Vancouver in October. In Toronto, Space NK will occupy about 1,100 square feet in the main floor beauty hall of the Yorkdale Shopping Centre Hudson’s Bay store. In the downtown Montreal Hudson’s Bay flagship, Space NK will occupy 755 square feet on street level while in Vancouver, the brand will have a 569 square foot main floor shop-in-store at the downtown Hudson’s Bay flagship. More Space NK locations within Hudson’s Bay are expected as the wholesale partnership expands including the Queen Street flagship store in downtown Toronto.
Hudson’s Bay’s newly rebranded website ‘The Bay’, along with its app, officially began carrying Space NK products on Friday. And this fall, 25 Hudson’s Bay stores will carry a select line of hair care products from brands such as R+co, Virtue, Christophe Robin and Philip B in branded display ‘towers’.
An initial 17 brands are being carried at The Bay with with the Space NK partnership, including a range of premium, independent and niche brands never before carried in Bay stores or online in categories including skincare, haircare, and makeup. Brands such as Sunday Riley, Aesop, Tata Harper, Chantecaille and Boy Smells are now available online at thebay.com and more brands will be added in the coming months.
“This is a beauty game-changer for the Canadian consumer. With a digital-first approach, Space NK brings innovative and sought-after brands to The Bay. Customers will discover an array of skincare, makeup, haircare and lifestyle products,” said Jo Osborne, Senior Vice President of Beauty at The Bay. “This transformative partnership reflects how we are innovating and expanding our beauty experience, for every Canadian, at every stage in their beauty journey.”
Noah Rosenblatt, President of Space NK’s North American operations, said, “Our ability to act as the ‘curator’ of some of the world’s most desired beauty brands uniquely places us to support the beauty businesses of our retail partners. The Bay’s customer profile and presence in the market make them the perfect partner to expand our department store business in Canada.”
Space NK was founded in London in 1991 with a storefront in the city’s Covent Garden which opened in 1993. The company now has over 70 standalone stores across the UK and Ireland. Until last year, Space NK also had eight standalone stores in the United States and the company recently shut them to focus on a wholesale model for the North American market.
Similar to Hudson’s Bay, Space NK also has partnered with department store retailers in the United States. In 2008, Space NK partnered with Bloomingdale’s to open concessions in several store locations and these are now being converted to a wholesale model as per Space NK’s new strategy. Space NK shop-in-stores are also found in several American Nordstrom store locations.
Other retailers in North America are also launching beauty shop-in-stores. US-based Kohl’s began rolling out Sephora shop-in-stores earlier this month with plans for at least 850 locations by 2023. At the same time, Sephora is terminating its partnership with JC Penney (which began in 2006) with those Sephora shop-in-stores to shut by next year.
The Space NK partnership marks a new chapter for Hudson’s Bay which is seeing a transformation after a recent announcement that its physical store business and online businesses would be separated into two different divisions. As part of the shift, the physical stores retained the banner Hudson’s Bay while the online division recently took the official name of The Bay. A Hudson’s Bay representative told Retail Insider this week that the retailer will be launching an updated store concept with the opening of an entirely new space at the Oakridge Centre in Vancouver in 2024 as well as in a renovated and downsized downtown Montreal flagship store. The store design will be attractive and the offerings will be innovative according to the retailer.
Other Hudson’s Bay department stores in Canada have seen recent updates including a partial renovation to the Londonderry Mall store in Edmonton which now features showroom spaces for baby items and home goods. The two-level store features central checkouts on each level, mirroring recent changes to Hudson’s Bay stores at Centrepoint Mall in Toronto and at the Centre Laval near Montreal.
More partnerships are expected for Hudson’s Bay in the coming months as the retailer continues to transition its business model and bring in new brands. Hudson’s Bay is competing with the likes of Nordstrom which entered Canada in 2014 as well as a range of retailers and standalone brands that are selling both in-store and online. The department store model has seen a downward trend in North America in recent years as brands increasingly sell direct-to-consumer while pressure also mounts from discounters, off-price and online retailers. Prior to the pandemic, Hudson’s Bay was said to be looking at converting various departments to a concession model where outsourced third parties would operate such departments as footwear and jewellery, with UK-based Kurt Geiger rumoured to have been in discussions to run Hudson’s Bay’s footwear departments in Canada while Australia-based Michael Hill was said to be in negotiations to take over the jewellery operations.
Hudson’s Bay may still look to a concession model as brands increasingly demand autonomy in terms of selling directly to consumers. Toronto-based Holt Renfrew, currently part of London-based Selfridges Group, shifted its business model in recent years to include a significant amount of leased floor space dedicated to brands operating their own stores such as Gucci, Prada, Louis Vuitton, Fendi, Saint Laurent and others. The concession model is also being adopted by Seattle-based Nordstrom which said several months ago that it planned to expand concession-based sales from 5% to 30% in its stores.