Canadian Retail Thread

[ue]

This will probably go nowhere fast, but what the hell...

Mike, I get what you're saying but I don't think the situation is as dire as you make it out to be.

Cities as large as Toronto are simply cannot function efficiently if everything is located in one area (the downtown core or elsewhere in the region). It just congests everything and Downtown Toronto is already seeing that, which is why the GTA is starting to develop more secondary nodes for employment. Not everyone wants to live in Downtown Toronto and they shouldn't have to suffer the consequences with a hellish commute. Some people like North York and shouldn't have to deal with a lack of amenities because some holier-than-thou wants everything downtown - end of story.

Downtown Toronto can still be the key destination, and I think it still is overall, but it is unrealistic to have it remain the only important commercial node in the GTA. Even New York doesn't have everything located in Manhattan nor Chicago in the Loop nor London in the City or Westminster. Downtown will likely remain the key destination because it has the cool chain stores that Yorkdale and Sherway Gardens and Square One may also have, but it also has the bulk of the cool non-chains in places like Trinity-Bellwoods, the Mirvish Village, Cabbagetown, Greektown, and the Beaches. People go to Toronto for the urban experience downtown, not for more suburbia.

Keep in mind, in spite of Nordstrom opening in Square One or Holt Renfrew opening in Sherway Gardens, Downtown Toronto has never been so alive and is still currently where so many want to be, hence the enormous construction boom. There is more to Downtown Toronto than upscale chain clothing stores.

How has Downtown Calgary lost out to Chinook? The Core is a marvelous downtown mall, far nicer than the Eaton Centre or Rideau Centre. Chinook still gets the international chains first (except for big box stores), but this is nothing new in Western Canada. Downtown Calgary hasn't been the primary retail destination in the city since probably the '60s. Likewise for Edmonton and Winnipeg. It's just how things are here. Malls are lucrative and our downtown malls were never as successful as the big Ontarian ones (except for the Core, and only since the recent reno).

I highly doubt many successful chains would've stuck to Downtown Toronto or Ottawa without those malls, as it was what was de rigueur in 1973. Only over the past 15 or so years have chains started opening again on streetfronts in urban locations. Toronto had a huge helping hand due to a larger critical mass of people compared to Calgary, as well as a successful downtown mall that could easily spill out onto the street. The retail cores of the Prairie cities have undergone great transformations over the past decade, but they aren't riddled with chains like Yonge St or St Catherine Street, for the most part. I'm fine with that, as well as the fact that our downtowns will likely never be the main retail destination of our cities. We're competing with the West Edmonton Malls of the world, after all. Jasper Ave in Downtown Edmonton may have a Lululemon, American Apparel, Le Chateau, and Forever 21 in a decade, but West Ed and Southgate will still be the key retail destinations, in addition to Whyte Ave (for an urban environment) and South Common (for the big boxes).

[MustangJay]

Originally Posted by losername

I wouldn't call bedazzled jeans fashion forward, and they seem to be very popular with the men of Montreal.

Montreal may have more "fashionable" residents but in terms of income and taxes, their isn't a huge propensity for spending on luxury. For a city as big as Montreal, their offerings of upscale store is pitiful compared to other similar-sized or smaller cities. For example, Toronto has free standing stores for Chanel, Hermes, Dolce & Gabana, Gucci, Prada, Escada, Porsche Design, Tiffany's (x3), Mulberry (x2), Cartier (x2), Hugo Boss (x2), Louis Vuitton (x2), and Burberry (x2). Vancouver also has many of these same stores which Montreal doesn't have. Toronto and Vancouver are also on the short list for Nordstrom's which has completely bypassed Quebec, although Saks may wind up opening somewhere there. Without belabouring the disaster that was Les Ailes de la Mode, suffice it to say that affordable fashion retailers like Simons tend to do better in Quebec.

[Acajack]

Originally Posted by MustangJay

Montreal may have more "fashionable" residents but in terms of income and taxes, their isn't a huge propensity for spending on luxury. For a city as big as Montreal, their offerings of upscale store is pitiful compared to other similar-sized or smaller cities. For example, Toronto has free standing stores for Chanel, Hermes, Dolce & Gabana, Gucci, Prada, Escada, Porsche Design, Tiffany's (x3), Mulberry (x2), Cartier (x2), Hugo Boss (x2), Louis Vuitton (x2), and Burberry (x2). Vancouver also has many of these same stores which Montreal doesn't have. Toronto and Vancouver are also on the short list for Nordstrom's which has completely bypassed Quebec, although Saks may wind up opening somewhere there. Without belabouring the disaster that was Les Ailes de la Mode, suffice it to say that affordable fashion retailers like Simons tend to do better in Quebec.

I sort of addressed this point hee:

Originally Posted by Acajack

Your post about Simons in-house brands reminded me of how people in Quebec are not as big on brand names as people in the rest of Canada or the States. People in Quebec are much more about what a garment looks like than whether it is brand X, Y or Z.

In many cases this does lead them to buy cheap stuff that doesn't last long but they don't seem to care.

Whether or not this is because of necessity or simply making different choices or having different priorities, is a whole other discussion.

People in Quebec also tend to buy smaller cars, and even suburban houses here tend to be smaller on average as well.

My observation seems to be that people in Quebec have a larger ''experiential'' angle (as opposed to ''material'' bent) in their spending habits when compared to other Canadians.

[miketoronto]

Originally Posted by MolsonExport

I don't adhere to the false dichotomy that you seem to be proposing. Anyone that has familiarity with my postings knows full well that I am not at all in favor of endless sprawl. But neither am I in favor of draconian legislation severely constraining retail to the core, which I believe would be counterproductive. Let's not forget that it wasn't zoning that built the great city centres of yesteryear; it was market forces. Strangely, you seem to be opposed to the explosion of condominiums in the core of Toronto, which would seem to be the catalyst for retail expansion downtown.

I did not propose draconian legislation. I have never said we can't have retail outside downtown.
What I have said is that we have to watch how much expansion we have, and they yes downtown should still be the focus for destination retail.

Part of the reason our cities have healthy downtown retail is because we took steps in the past to ensure we were kept retail healthy while also allowing some suburban expansion.
Ottawa for example had strict suburban mall expansion legislation in place. This is why Rideau Centre became the main mall for the region.

Legislation aside. All I am stating is that we are seeing an over expansion of high end stores, that in most cities do not have more than one location. And if Canada does not watch out, we are going to face issues that US cities have with an over supply of retail that just can't be supported.
Talk all you want, but I am in the USA right now for work, and I am seeing first hand what over building retail has done to both downtowns and suburban malls.
I just drove by a mall that was as large or larger than Yorkdale when it was built, and just as much the place to be. Today it is totally vacant and growing weeds from the roof.
Why? Because retail was allowed to be expanded way beyond what the region could support.

So it is all fine and good to have retail growth in our cities. But let's not become complacent here.

Also when it comes to high end stores, European cities do not have tons of branches for the most part. In London the big fancy department stores like Holt Renfrew only have on location and that is the city centre. Same goes for Paris and other cities like Rome, Milan, etc.

Seriously, why would a truly high end store open in Square One. As far as I am concerned that will just damage Holt Renfrew's brand as being exclusive.

This is also the first retail expansion where downtown Toronto has been left out of so many of the new openings. Instead them all going to Yorkdale.
This is not good news for the downtown retail core, no matter what you guys try to say.

Our regions are going to have to make a decision if we are going to continue to keep our legacy of having vibrant city centers, or if we are going to let uncontrolled suburban expansion eat away at our cores. We were so good at keeping vibrant downtowns through the first suburban wave. It would be sad to see our cities lose out now.

I would also like to add that the continued suburbanization of our retail just makes our retail offerings mediocre. It was such a pleasure when I was in Europe, walking into grand stores that really know how to put on a show. But why are these stores so nice? Because for the most part they only have one location in each city, usually in the city centre. These stores are huge, have selections we could only dream of in North America, and they put care into making the shopping experience great.
But in North America we are happy with crappy little suburban branch stores which try to fit everything on offer in the size of one department in a grand store you will see in Europe, or in the few grand stores we have left in some Canadian and American downtowns.

[someone123]

I think a lot of luxury fashion goods have more to do with conspicuous consumption than they do with fashion as such. In a similar vein, there are great restaurants with dishes at just about any price and then there are places that exist so you can show your friends that you're willing to spend money on piles of caviar and foie gras or whatever. I suppose that going to these places indicates that you're at least more conscious of your food choices than if you went to McDonald's, but they aren't necessarily a sign of sophistication.

[eternallyme]

I'm expecting a lot of dead malls in the next few years in Canada anyway. Most would be the lower-level regional malls after Sears departs for good with no obvious anchor to take its place. In smaller to mid-sized cities, they would either have to downsize to community malls or would be left without an indoor mall at all.

One possibility there is that, if higher-end retail wants to get into smaller cities, they would be downtown by default, since there would be no mall to locate into.

[SpongeG]

i don't know if i read it here or somewhere else but apparently hermes does very well in canada, second only to their best market which is germany

[miketoronto]

As you can see, my comments about the malls and downtown are not weird like some of you think, and in fact industry professionals have the same views.

From
http://www.theglobeandmail.com/repor...board/follows/
---------
Despite all this activity, there was a time not so long ago when Mr. Vorst might have wondered whether he did the right thing when he bought the building on Bloor.

unlike European markets, Toronto’s high street has at times faced some stiff competition from shopping malls when it comes to attracting tenants.

After the financial crisis struck in 2008, a number of American and European retailers looked to Canada, which was relatively unscathed, as a safe haven to open locations and grow revenues.

“Bloor Street was an obvious one for large retailers, but when you had the announcement of Yorkdale Shopping Centre adding 140,000 square feet, retailers who had the opportunity of doing Bloor Street or Yorkdale elected to do Yorkdale,” says Mr. Crombie, listing off names like Ferragamo, Ted Baker and AllSaints. “So there was a bit of a pause for Bloor Street for that 2011 and 2012 period.”

This spring Yorkdale announced that it will be expanding again, by a further 298,000 square feet including a 188,000-square-foot Nordstrom store. But construction of that new space doesn’t begin until next year, and the retailers won’t be opening shop until late 2016.

“This is a chance for Bloor Street to take advantage of that,” Mr. Crombie says.

“We believe in downtown retail,” he says. “Long, long, long term, high-street retail will always be there.”
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[miketoronto]

Just a fun little view to show how we overbuild our retail in North America.

The following is just a few high end store names, and their locations in Toronto and Milan.


Louis Vuitton

Milan
City center locations only

Toronto
City centre and suburban mall locations


High End Department Store

Milan
City centre location. Only location in the entire metropolitan area.

Toronto
Downtown flagship, plus two suburban mall branches, and a third on the way.

Cartier

Milan
City centre locations only

Toronto
City centre and suburban mall locations.

Salvatore Ferrgamo

Milan
City centre locations only

Toronto
Suburban mall location only

Gucci

Milan
City centre locations only

Toronto
City centre and suburban mall locations

[Gerrard]

Mike all those suburban Toronto locations of high end retail are shops within department stores or just various locations to obtain the product not actual freestanding retail locations for the brands -which in Toronto are all located downtown with the exception of Holt Renfrew.

Not to mention the employment opportunities they generate outside the core... and the fact that Milan is several times smaller than Toronto. Also North American suburbs tend to be wealthier and thus follow a different retail model.

[miketoronto]

Originally Posted by Gerrard

Mike all those suburban Toronto locations of high end retail are shops within department stores or just various locations to obtain the product not actual freestanding retail locations for the brands -which in Toronto are all located downtown with the exception of Holt Renfrew.

Not to mention the employment opportunities they generate outside the core... and the fact that Milan is several times smaller than Toronto. Also North American suburbs tend to be wealthier and thus follow a different retail model.

The locations are freestanding stores located in Yorkdale. Greater Milano has over 4 million people, and in almost any European city you will not find high end stores located outside the central shopping areas. London is huge and the high end stores for the most part do not have branches in the suburbs.

[Gerrard]

Originally Posted by miketoronto

The locations are freestanding stores located in Yorkdale. Greater Milano has over 4 million people, and in almost any European city you will not find high end stores located outside the central shopping areas. London is huge and the high end stores for the most part do not have branches in the suburbs.

They are all inside Holt Renfrew as leased departments at Yorkdale. And again, suburban development in North America is different than Europe. European suburbs tend to be less wealthy, either lower or middle class. Not bastions of wealth. Why even compare European urban development to North American urban development when you know they are completely different?

And again, they are there because the population supports them. They generate employment. Why be a fascist about supportable and organic development. Do all suburbanites have to shop at Wal-Mart?

[miketoronto]

Originally Posted by Gerrard

They are all inside Holt Renfrew as leased departments at Yorkdale. And again, suburban development in North America is different than Europe. European suburbs tend to be less wealthy, either lower or middle class. Not bastions of wealth. Why even compare European urban development to North American urban development when you know they are completely different?

And again, they are there because the population supports them. They generate employment. Why be a fascist about supportable and organic development. Do all suburbanites have to shop at Wal-Mart?

All European suburbs are not as poor as you are making them sound.

The post was more to show how we are likely overbuilding high end retail in Toronto. Why do we need four Holt Renfrew stores mere minutes from each other? If it is truly an exclusive store then it should have one good impressive and large store, like you see in European cities. Instead of multiple small suburban branch stores with crappy selections.

We seriously have to stop celebrating this mediocre expansion of retail in Canada. Taking Holt Renfrew as an example again. Instead of them building all these small branch stores with poor selection. They should be putting the focus into building a true flagship on Bloor Street. And I mean a real flagship. Lets see a ladies store with a separate mens store across the street. Lets see that mens store have 6 floors of mens clothing. Lets see floors of restaurants, etc . That would put us up there with Printemps in Paris. That is the kind of retail expansion we should see. Not the crap we get.
The continued spreading out of retail in North America just totally diminishes the selection of retail we have. We just don't get the selection anymore that European cities have, because we keep diluting the retail cores in North America.

I took this photo on my European trip.

The Printemps ladies store you can see in the distance. The building to the right under construction tarps is the men's store.

[ue]

Mike, did you read my post on the last page? It sort of addresses this and I really don't think that the situation is as dire as you're making it out to be. Toronto is a big city; it is simply unrealistic for everything to be downtown and only downtown. For out-of-towners, Downtown is still the destination because it has most things in a short distance, including unique independents, as well as offering a different environment that you won't get in Kitchener or Thunder Bay or Fergus. People from outside Ontario still to this day do not visit Toronto just to see Mississauga or Brampton or even North York; they come for the Downtown Toronto experience. I don't see that changing in the foreseeable future. In fact, I only see it getting better as the core of Toronto has never been busier and keeps getting busier with each new condo or infill or office or loft.

Also as Gerrard mentions, Europe and North America have different retail models. That doesn't stop cities like New York, Boston, Montreal, Toronto, Chicago, and San Francisco from having strong retail cores, but it also doesn't negate other strong retail corridors. Even in Europe, IKEA is in the 'burbs.

You have to realize that not everybody wants to have to trudge all the way downtown for high end (or whatever) goods. If you live in Newmarket, I'm sure a Holts in Yorkdale comes in handy for those times you don't want to or can't go all the way to downtown Toronto. And that's fine. North America is a culture of convenience, through and through. Wishing otherwise will just leave you disappointed. The European model isn't the only viable model. Neiman Marcus has suburban stores and its brand isn't cheapened any more than Holt Renfrew is with locations in the god-forsaken 905.

[MolsonExport]

Mike goes to Europe and has an epiphany about retail, while neglecting to consider the historical reasons for the differences in the development of the core. I have been to Europe many, many times, and I think if Mike were to venture out into the suburbs of many European cities, he would find that they have quite a few similarities with North American cities, because--yup, you guessed it--these were developed at a similar time with the automobile in mind. I am not saying this is an ideal situation (far from it; very few would prefer the urban fabric of downtown Jacksonville to Vienna), but like it or not, it is the product of market forces. If the luxury brand retailers like Louis Vuitton, etc. (out of the reach of most regular folk) choose to have a single location in a central European city, it is only because they have deemed this to be the best option. The same chain makes a different decision in North America, because the market dynamics demand a modified marketing strategy to reflect the flow of dollars and people. You can't legislate this away.

[eemy]

The Salvatore Ferragamo, John Varvatos and Burberry stores in Yorkdale are free-standing and completely separate from Holt Renfrew (ie. not a store in store) off the top of my head.

That said, these are businesses and I'm sure they did plenty of market research before expanding outside the core. I do have to wonder at Holt Renfrew's expansion plans though; they seem awfully aggressive.

[SpongeG]

without the suburban stores the flagships would be hurting

[eternallyme]

Also, in many cities, downtown is not even viable due to high crime and low demand in the area. Downtown malls have failed in several cities despite extensive efforts to develop such, such as Winnipeg and London to name two.

[YOWflier]

Originally Posted by MustangJay

Montreal may have more "fashionable" residents but in terms of income and taxes, their isn't a huge propensity for spending on luxury.

During my time in Montreal I've seen nothing to substantiate the claim often heard/read that its residents are more "fashionable" than any other major city.

Unless, by "fashionable" people are referring to the dude in my office who wears a scarf, indoors, all day.

[miketoronto]

Originally Posted by eternallyme

Also, in many cities, downtown is not even viable due to high crime and low demand in the area. Downtown malls have failed in several cities despite extensive efforts to develop such, such as Winnipeg and London to name two.

Those two downtowns only failed because the cities did not control unneeded suburban retail expansion.
London actually now has legislation mandating all major office development be downtown. Do you guys consider that bad to?

Winnipeg has a super regional mall only a 5 minute drive from the heart of downtown. Why was that mall required? Clearly it was not filling a retail void but rather just taking business from downtown.
In fact, all major malls in Winnipeg are only about a 10 minute drive from downtown.
Same goes for London.
Plain and simple, these two cities just do not have the populations that even require any sort of major out of downtown shopping areas.

That is why Ottawa also had bans on massive suburban retail expansion for a period. Because the population just could not support that much retail without just eating business away from already established malls and downtown.

Canadian cities made great strides in retaining vibrant downtowns in many cities, and also reducing the amount if any of the dead malls that you see in many other suburban areas in the USA.
But if keep acting all smug and think uncontrolled massive retail expansion is all of a sudden good, without any real plan to see how this effects our already established areas. Then we could be in for some tough planning times with having to deal with dead malls and weak downtown cores.

It is great Canada is doing so well. But no matter what you guys say, Holt Renfrew and other stores are just not stores people go to everyday. And I think we are setting ourselves up for some over building in the high end retail market. The Holt Renfrew expansion at Square One just screams too much expansion.

It should also be noted that Saks has closed some stores in the USA, because they had too many stores in one metropolitan area for such a high end store. That is one reason SF only has one Saks, the main one downtown.
Louis Vuitton is also facing some issues with exclusive brand status. Because they have so many stores in some cities, they are starting to not be seen as high-end anymore, and just becoming common. This actually is a big issue in China, where the residents there are not as into Louis Vuitton anymore, and Louis Vuitton is slowing their expansion of new stores partly due to this.