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News on retail chains (was: New Mall Retail)

Calvin Klein is opening its largest NA store in Vaughan Mills. Interesting...

http://www.vaughanmills.com/Mall-Directory/Calvin-Klein.aspx

The largest MEGASTORE to open in North America!

Calvin Klein is one of the most recognizable brands in fashion, whose philosophy of modern, sophisticated, and often minimal designs has remained a staple of fashion for over four decades. The clean lines of the brand's designs extend to women's and men's sportswear, suits, dresses, jeans, underwear, fragrance and accessories.
 
The Kitchen Stuff Plus that opened north of Dundas on Yonge is closing. Must have just been a temporary summer store? Sucks! I was liking it being so close, even if the selection was crappy because it was so small.
 
American Retailers Face Challenges in Expanding to Canada

The New York Times
By IAN AUSTEN and STEPHANIE CLIFFORD
Published: September 14, 2012

TORONTO — Nordstrom and Target are about to open stores in Canada, J. Crew and Tory Burch just did so, and Ann Taylor and Kate Spade are scouting locations.

American retailers extending their reach northward seems like the most obvious of moves. But until recently, the Canadian market was hard to crack for many companies. The Canadian dollar was weak, costs were higher, and with limited real estate development, it was difficult to find space.

“You can’t just say that we are close in proximity or we both speak English, so it should be the same,” said Blake Nordstrom, president of the Seattle-based Nordstrom chain. “We recognize there are differences. That’s probably why we’ve probably been slow in coming to Canada.”

Now, the door to Canada is opening wider thanks to a stronger Canadian dollar, a relatively robust economy and a loosening of the commercial real estate market, in part because of the downsizing of some longtime retailers like Sears Canada. Nordstrom said this week that it would open four stores in Canada in 2014, three of them in former Sears Canada locations.

For American retailers, Canada’s allure is basic: Sales per square foot at Canadian malls were almost 50 percent higher in 2011 than sales per square foot at American malls, according to Colliers International Consulting, a real estate research firm.

“Major Canadian markets are at historic lows for vacancy rates, and have been for four to five years now,” said James Smerdon, director of retail consulting at Colliers. “We have a much more conservative development financing and development industry in Canada. There’s not as many lenders for retail and large-scale shopping center development, so finding access to capital is trickier.”

Here in Toronto, the Yorkdale mall is adding 145,000 square feet, in part to accommodate American newcomers like Kate Spade New York, Tesla Motors and Ann Taylor. The high-end mall has been a first stop for other American brands, including J. Crew, Crate & Barrel and Apple.

Anthony Casalanguida, Yorkdale’s general manager, said the transition to Canada was not always easy for American companies. To help avoid problems, he and some of his staff members school the companies in the ways of Canadian retail.

The first lesson is to set realistic expectations about location.

The most desirable retail space is generally controlled by a handful of large property companies. These are, in turn, mostly owned by large pension or government investment funds, which are not interested in taking risks on untested retailers. The company that runs Yorkdale, for instance, is owned by the Ontario Municipal Employees Retirement Service.

As a result, many of the new American arrivals are moving into existing spaces or expanding through acquisitions.

Target acquired up to 220 leases formerly held by Zellers, a discount store, for $1.8 billion in 2011, and has announced plans to open at least 125 stores in 2013. It is remodeling the sites at a cost of $10 million a store, a spokeswoman, Lisa Gibson, said. Lowe’s, the home improvement store, has placed a hostile bid for Rona, a Quebec-based chain, which would greatly expand its Canadian presence.

Mr. Casalanguida also warns American newcomers to watch their pricing and to load up on inventory.

Costs tend to be higher in Canada because it has a population of about one-tenth that of the United States’s, spread over a larger area. But Canadians are familiar with many American retailers and their prices, and they don’t want to be gouged on their home turf.

Shortly after opening its Yorkdale store last year, J. Crew found itself apologizing to angry customers for having raised prices in Canada above those in the United States.

The upside of the cross-border familiarity is pent-up demand. American retailers risk botching their Canadian debuts if they do not bring a healthy inventory to cover that demand.

Sears came to Canada in 1953 through a joint venture, and Costco came in 1986, Home Depot in 1992 and Wal-Mart in 1994 through acquisitions. All have learned another secret to the Canadian market: customization.

Walmart Canada carries just 20 percent of the merchandise available in the retailer’s American stores, with items like wine gums and mini-pepperoni popular in Canada, a spokeswoman, Susan Schutta, said in an e-mail. Louise Wendling, Costco’s country manager for Canada, said that stores here carried children’s snowsuits beginning in July, and that items like skiwear and snowshoes sold well, along with ice augers for ice fishing.

Then there is the language issue. All product packaging must be in both French and English throughout Canada, and large retailers operating in Quebec are required to conduct business in French and to ensure that French predominates on signs.

Target and Nordstrom have not given specifics regarding prices and merchandise strategies. Mr. Nordstrom said his company would have to contend with different distribution arrangements for brands it now carries, along with immigration laws that will prevent it from filling its new stores with experienced employees from the United States.

Ms. Gibson of Target said the goal was to largely mimic American stores, with some small changes.

“We’ve heard loud and clear from our guests that shop across the border that they want the true Target when it comes to Canada,” she said.

Some Canadian retailers and early American transplants are preparing for a wave of new competition.

Holt Renfrew, a high-end Canadian department store, is doubling its space at Yorkdale. Hudson’s Bay, Canada’s largest department store chain, is renovating many of its stores. Sears Canada plans to refurbish its remaining stores and change its merchandise.

At the lower end of the market, Walmart Canada has added many prices from $1 to $3 to emphasize its low-cost approach. And Canadian Tire — which, despite its name, sells a wide range of home improvement merchandise, sporting goods and household products — is also readjusting its product lines and marketing campaigns.

Allan MacDonald, senior vice president for marketing and automotive at Canadian Tire, said he welcomed the competition.

“It’s very interesting that since several new competitors, including Walmart, have entered into Canadian Tire’s market since the ’80s, we’ve grown and become a better company,” he said.

Consumers seemed interested in the new arrivals. Amy Rathburn, carrying a bag from the Canadian sportswear retailer Lululemon Athletica while walking through Yorkdale this week, said she drove to Buffalo about four times a year to shop at Target and eagerly awaited its arrival in Canada. Nordstrom, however, drew a blank.

“I don’t even know what they sell,” she said.

But the face of Judy Kates, another Yorkdale shopper, lit up when she heard the Nordstrom news. “I really, really like that store,” she said, adding that she shopped at Nordstrom during a recent trip to Arizona.

Ian Austen reported from Toronto and Stephanie Clifford from New York.
 
Louise Wendling, Costco’s country manager for Canada, said that stores here carried children’s snowsuits beginning in July, and that items like skiwear and snowshoes sold well, along with ice augers for ice fishing.

This will do nothing to help American perceptions of Canada.
 
The Kitchen Stuff Plus that opened north of Dundas on Yonge is closing. Must have just been a temporary summer store? Sucks! I was liking it being so close, even if the selection was crappy because it was so small.

My understanding was that this was a month-to-month lease anyway and that was indeed somewhat temporary. I've heard that PUMA will be taking over the space as they are beginning an expansion back into the GTA. They never really should have been on Bloor in the first place so this location would seem to make a lot more sense. They are also eyeing Queen West as a possible second location.
 
Henri Bendel will open its first Canadian location at Sherway Gardens: http://www.retail-insider.com/2012/09/henri-bendel-coming-to-canada-first.html

"NYC-based Henri Bendel will open a 3212 square foot store at Toronto's Sherway Gardens shopping centre. Several other Canadian locations in the works. The store will be located in a new north-end mall expansion that will include a new Holt Renfrew store, Sporting Life, Harry Rosen, and a new French luxury goods retailer that we'll announce tomorrow."

I'm going to follow this Retail Insider website daily. It seems to have interesting retail articles not posted elsewhere.
 
Henri Bendel will open its first Canadian location at Sherway Gardens: http://www.retail-insider.com/2012/09/henri-bendel-coming-to-canada-first.html

"NYC-based Henri Bendel will open a 3212 square foot store at Toronto's Sherway Gardens shopping centre. Several other Canadian locations in the works. The store will be located in a new north-end mall expansion that will include a new Holt Renfrew store, Sporting Life, Harry Rosen, and a new French luxury goods retailer that we'll announce tomorrow."

I'm going to follow this Retail Insider website daily. It seems to have interesting retail articles not posted elsewhere.

Doh, you beat me to it. Good for Sherway. I'm guessing Longchamp for the French luxury goods retailer. It's true Retail Insider has been a wealth of information lately.
 
Doh, you beat me to it. Good for Sherway. I'm guessing Longchamp for the French luxury goods retailer. It's true Retail Insider has been a wealth of information lately.

It's interesting that these new retail chains are deciding to introduce themselves into the Canadian market by way of the malls (Sherway and Yorkdale). Perhaps it's a symptom of a lack of good retail space left in the city (in the core retail areas at least) but this is definitely an about-face of how things used to be done when it was considered prestigious and high-profile to pave the way downtown first.
 
My understanding was that this was a month-to-month lease anyway and that was indeed somewhat temporary. I've heard that PUMA will be taking over the space as they are beginning an expansion back into the GTA. They never really should have been on Bloor in the first place so this location would seem to make a lot more sense. They are also eyeing Queen West as a possible second location.

Good news about Puma. I've always liked their stuff. Glad they are coming back. I agree that being right on Bloor was not the best location for them. Queen street is the ideal place, IMO. Yonge and Dundas is not bad either. Adidas is in that area as well (though I don't know how well they are doing).
 
It's interesting that these new retail chains are deciding to introduce themselves into the Canadian market by way of the malls (Sherway and Yorkdale). Perhaps it's a symptom of a lack of good retail space left in the city (in the core retail areas at least) but this is definitely an about-face of how things used to be done when it was considered prestigious and high-profile to pave the way downtown first.

I think it has gotten to the point where new areas downtown will need to be redone to accommodate new retailers or existing areas will need to be expanded. For instance, the Bloor strip can be expanded east and west past its current boundaries, and the Yonge strip north of the Eaton Centre should continue more northward.
 
I would guess so, and Brooks Brothers Flatiron is sort of leading the way... but I'm not sure why so many others aren't. Look at the effort CB2 went to. I wish we were seeing more of this. One Bloor may just be the turning point.
 
I would guess so, and Brooks Brothers Flatiron is sort of leading the way... but I'm not sure why so many others aren't. Look at the effort CB2 went to. I wish we were seeing more of this. One Bloor may just be the turning point.

If these new stores like Brooks Brothers Flatiron prove to be successful it may entice other retailers to move into the new stretch. Sometimes it takes one store to blaze a trail before others will follow.

Agreed about one Bloor. It will give that stretch a shot in the arm. One thing I would really like to see is the Bay do a massive reno of their front facade and make it more street friendly, maybe even to the point where they can lease street level space to third party retailers. That would be huge for Bloor IMO.

Edit, and I'll just add that CB2 looks great. This is a retailer that get's it, researched the city, and positioned this new format store in the right area.
 

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