The McEwan grocery store at the corner of Yonge & Bloor Streets in Toronto is set to close after chef Mark McEwan’s business empire filed for bankruptcy protection at the end of last month. The McEwan grocery store opened in January 2019 and was featured in Retail Insider with photos.
The 17,000+ square foot McEwan store is located on the concourse level of the First Capital REIT-owned 1 Bloor East complex with the grocer occupying the basement level. McEwan has a street-level entrance on Yonge Street between a Nordstrom Rack store and Chick-fil-A restaurant, and across the street is an under-construction tower project by developer Sam Mizrahi called The ONE.
The McEwan store features a mix of grocery items as well as grab-and-go and sit-down dining options — the latter has been disrupted significantly by the pandemic. It was noted in the 2019 Retail Insider article that McEwan’s presence in Bloor-Yorkville was part of the densest clustering of grocery retailers in Canada.
The Yonge and Bloor McEwan grocery store was the second large-format grocery location for McEwan following the opening of a 21,740 square foot location in 2009 at the CF Shops at Don Mills in Toronto — and a smaller 5,500 square foot McEwan grocery location also operates at the TD Centre in the Financial District.
Those two grocery stores will remain open while the Yonge & Bloor location will close — in court filings last month, McEwan noted that its 1 Bloor E. grocery store has struggled financially since it opened. As part of the filing, McEwan is seeking court approval to transfer the business to a new company held by the same owners, excluding leases for the Fabrica restaurant at CF Shops at Don Mills and the McEwan Yonge & Bloor grocery store. A subsidiary of Fairfax Financial Holdings owns 55% of McEwan with Mr. McEwan’s holding company McEwan Holdco Inc. owning the remaining 45%.
McEwan Enterprises had $10.25 million in liabilities as of August 31. That includes a $2.3 million loan to Fairfax, $2.3 million owed to suppliers, about $2.2-million owed to Royal Bank of Canada, about $540,000 in overdue/deferred rent to landlords, and $488,000 in customer gift cards that are outstanding.
In court filings, McEwan noted challenges with the Yonge and Bloor grocery store. “This location has created significant strain on the Company’s liquidity,” said the Application Record of McEwan Enterprises Inc. “With an extensive footprint and significant lease and operational costs, combined with disappointing sales results, McEwan Yonge & Bloor has had the most detrimental impact on the Company’s overall financial performance. With the benefit of hindsight, the Company would not have entered into operations at this location based on the existing lease terms. McEwan Yonge & Bloor has been a significant challenge since its opening and currently remains a material issue for the Company.”
The filings state that issues persisted even before the pandemic, noting that McEwan Group was facing financial challenges and a need to improve its financial performance and liquidity position.
A closing date has not yet been made public for the Yonge & Bloor McEWan grocery store which is operational as of Monday afternoon.
Toronto’s Bloor-Yorkville continues to boast a high density of grocery retailers. That includes Italian concept Eataly that opened nearby at the Manulife Centre in November of 2019, joining a Loblaw City Market grocery store in the basement, Whole Foods at Yorkville Village, Pusateri’s on Bay Street, Longo’s at the Hudson’s Bay Centre, and three Rabba stores nearby. Shoppers Drug Mart has also expanded grocery offerings at its two-level storefront at Yonge and Charles Streets.
This was doomed from the get go.
First Cap completely overpaid for the entire retail portion. McEwan figured they could rely mainly on the residential traffic, but that was a pipe dream given the pricing and location. The wealthy customer shops in Yorkville, this is not that.