Retail’s next wave
The recent demise of Target, Smart Set, Sony, Radio Shack, Future Shop and Mexx, along with Sears’ ongoing struggles, put bricks-and-mortar retail on “death watch” in the press. But the industry is alive, well and ushering in the next chapter in retail.
“Many of the stores that are leaving the scene are sort of old guard; they’ve been around for a long time,” says Ed Strapagiel, a Toronto-based retail consultant. “Part of this is just simply the natural evolution in retail… the new displacing the old.”
The new guard is largely composed of international high-end and luxury brands moving into Canada. In the Greater Toronto Area, three shopping centres are getting multimillion-dollar makeovers to accommodate them.
“Many of these malls are looking for opportunities to expand and they’re catering to the higher-end,” says Strapagiel. “But there’s this herd mentality at that end of the market. Luxury and upper-end retailers tend to like to locate near each other.”
In Etobicoke, Sherway Gardens is embarking on a multi-phased $550-million redevelopment. “Affordable luxury” brand Tory Burch opened this month, and May will see the arrival of watch and jewelry retailer Thomas Sabo, Canadian fashion label Rudsak and designer shoe company Vince Camuto.
The shopping centre’s north expansion is set to launch in September and will include a new flagship Harry Rosen, as well as a new food court. Posh department stores Saks Fifth Avenue and Nordstrom are set to open in 2016 and 2017, respectively. The renovations will add 50 new retailers and an additional 210,000 sq. ft. of space to the mall, bringing its total size to 1.3 million sq. ft.
The ritzy makeover is part of Sherway Gardens’ new “fashion-first strategy,” as well as a focus on improving the overall shopping experience. “We’ve always been positioned in the Toronto market as a moderate to better-priced shopping centre,” said Andy Traynor, general manager at Sherway Gardens, which is owned by Cadillac Fairview. (Cadillac Fairview’s Toronto Eaton Centre will also be home to a Saks Fifth Avenue and Nordstrom.)
“[Our new strategy] is taking a fashion-forward position with stores that are more high fashion than before and more important and relevant to our shoppers… There is tremendous demand for the luxe brands.”
That said, the ‘better price’ and cheap chic brands still play an active role, added Traynor. “H&M is coming to Sherway and we have a Forever 21, so they balance each other out beautifully.”
Mississauga’s Square One is also in the race to deliver a more premium shopping experience. Last November, it opened a newly expanded $60 million north wing, including a 35,000 sq. ft. Forever 21, the largest in Ontario, as well as a 16,000 sq. ft. Shoppers Drug Mart Beauty Boutique concept and fashion label Brandy Melville.
Next spring, new Simons and Holt Renfrew stores are scheduled to open, bringing Square One’s total investment since 2013 to $480 million.
“Today, we’re essentially a one-stop destination for every category in our market except for higher-end aspirational and luxury,” said Greg Taylor, general manager, Square One, Oxford Properties Group, which jointly owns Square One with Alberta Investment Management. “We feel that for the future of our shopping centre, that’s an important component for the overall shopping experience for our customers.”
At Yorkdale Shopping Centre, construction on a new 300,000 sq. ft. east-side expansion began early last year. Once complete, it will house a Nordstrom and 30 additional boutiques, including Japanese casual-wear retailer Uniqlo. On the mall’s west side, the former Sears store is being renovated and divvied up to create flagship locations for a number of retailers, including Restoration Hardware.
While recent store closures might serve as a cautionary tale for brands looking to expand here, high-end retailers will likely avoid its fate. “The designer concepts seem to go internationally with fairly great ease,” says Wendy Evans, president of Evans and Company Consultants, a Toronto-based retail consultancy. “There is a good high-end market here and while we don’t have as big a market as the U.S. or parts of Europe, proportionately it’s still pretty high… [Canada] is high on the list of good markets to enter from an economic perspective, a political perspective and a tax perspective.”
This story can be found at: http://marketingmag.ca/consumer/retails-next-wave-144622.
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