The McEwan grocery store near the corner of Yonge & Bloor Streets in downtown Toronto has closed after chef Mark McEwan’s business empire filed for bankruptcy protection at the end of September. Landlord First Capital REIT had reportedly contested the store’s closure.
The 17,000 square foot store opened in January of 2019 on the concourse level of 1 Bloor East complex. It included a mix of grocery items as well as grab-and-go and sit-down dining options.
The store was one of several in the area which has the highest concentration of grocery retailers in Canada. Prices at McEwan were generally higher than most of the competitors nearby and its location on busy Yonge Street was removed from many of the wealthier households who live West of Bay Street in the Yorkville area.
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.”
After we announced in October that the grocery store would be closing, the Globe & Mail reported that landlord First Capital REIT was contesting McEwan’s application under the Companies’ Creditors Arrangement Act (CCAA) to restructure its operations by transferring most of the business to a new company held by the same owners. A subsidiary of Fairfax Financial Holdings Ltd. owned 55 per cent of McEwan Enterprises, and the rest was owned by Mr. McEwan’s holding company, McEwan Holdco Inc.
First Capital argued that McEwan Enterprises should be required to test the market by undergoing a sale process for the business and in a factum from October, the landlord’s lawyer argued that the the proposed transaction would be an “abuse” of the CCAA process.
McEwan Enterprises had been losing money even before the COVID-19 pandemic according to court filings. That includes several restaurants as well as another large-format grocery store at CF Shops at Don Mills in Toronto as well as a smaller grocery concept store in Toronto’s Financial District.
It remains to be seen what tenant will occupy the basement space that McEwan has vacated in downtown Toronto. It includes an entrance foyer at the street level facing Yonge Street which is flanked by a Chick-fil-A restaurant to the south and a Nordstrom Rack store to the north.
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.