Luxury brands tend to move like sheep, and the herd is headed to Canada. Many of the world's top luxury brands are looking to build free-standing stores in this country, and several have already secured retail space. According to one top broker, at no time in his 22-year career has he seen this much interest in the Canadian market from luxury retailers. As we head into 2015, we can expect a number of first-to-Canada announcements from a number of premium brands, looking to get a foothold into the burgeoning Canadian luxury market.
Although a number of Canadian cities are on luxury brands' radar, Toronto and Vancouver are often first choices when entering the Canadian market. Both cities include residents with a propensity towards spending vast sums on branded goods, regardless of affluence, and both cities also boast a substantial number of wealthy households. Additionally, both cities are seeing increasing numbers of high-end tourists, many seeking to buy 'the best' while on holiday. Despite concerns that lower oil prices could precipitate a correction or even a recession in Canada this year, luxury brands are still keen on expanding into Canada's top two luxury shopping cities.
Luxury brands are currently looking at only a handful of Canadian retail locations. Toronto's Yorkdale Shopping Centre, for example, saw several first-to-Canada luxury brands open in 2014 such as Bulgari, Jimmy Choo, and Moncler, joining Versace, Ferragamo, David Yurman and others in the mall's new luxury wing. In 2015, Yorkdale will see the opening of Canada's first Longchamp boutique, and several more luxury brands will open alongside Nordstrom in the mall's newest expansion when it opens in 2016. We've been asked not to reveal which luxury brands have secured space in the new wing just yet, and we'll discuss them when permitted.
Toronto's 'Mink Mile' on Bloor Street West, between Yonge Street and Avenue Road, seems to be on every luxury brand's radar. Until recently, very little retail space was available on Canada's most prestigious shopping street. That changed last year when Pottery Barn and Williams Sonoma announced that they were vacating 42,000 square feet of prime retail space at 100 Bloor Street West, providing options for new luxury brands. More retail space will eventually become available as neighbouring properties are redeveloped, including the retail component of Manulife Centre at 55 Bloor Street West. Flagship opportunities are available at the former 13,000 square foot Tiffany & Co. space at 85 Bloor Street West, as well as at 77 Bloor Street West, boasting the possibility of a newly-built 10,000 square foot space. The 100,000 square foot retail component of 1 Bloor Street East could see the addition of several premium brands, including a rumoured Apple Store flagship. Sources tell us that Apple recently walked away from a deal at 153 Bloor Street West at Avenue Road, possibly preferring the prominent corner at Yonge and Bloor.
Toronto's Yorkville area could see new luxury retailers as well, especially as First Capital Realty looks to buy real estate in the area. First Capital is redeveloping Yorkville's Hazelton Lanes as it integrates the mall into the surrounding area, rebranding it as Yorkville Village. First Capital is also looking to buy much of the retail space on adjacent Cumberland Street and Yorkville Avenue, creating a world-class retail, dining and entertainment destination. Adding to this are a number of developments in the immediate area, including an expanded retail podium at the base of the former Four Seasons Hotel on Avenue Road.
Toronto Eaton Centre could be next for several premium brands. With Saks Fifth Avenue and Nordstrom opening in the mall in 2016, we're told that a number of luxury retailers want to join the downtown mall's tenant mix. Hugo Boss and Ted Baker are some newer upscale entrants, with Kate Spade and others expected to announce stores in the coming months.
According to top Vancouver Broker, Mario Negris, luxury brands are lining up to find exceptional retail space in his city. The area around the Fairmont Hotel Vancouver, especially on Alberni Street between Burrard and Thurlow Streets, will see a number of high-profile luxury brands open in 2015 and beyond. Although he declined to provide the names of the luxury brands he's working with, Mr. Negris says that a number of luxury brands want to open stores in the are now dubbed as Vancouver's 'Luxury Zone'.
Sources say that a downfall of Vancouver's Luxury Zone is its lack of available retail space. Although some new space is under development in the area, much of it is already spoken for. Most of the retail space at luxury shopping complex The Carlyle, for example, has either been leased or is under negotiation. The retail component of the neighbouring 745 Thurlow Street office tower also has room for luxury retail, and a source at Avison Young says that two spaces are already spoken for. The Alberni Street plaza of 1040 West Georgia Street is slated for a redevelopment of two two-level flagship retail spaces, with one currently under negotiation for a prominent luxury brand. As luxury brands continue to seek space in Vancouver's Luxury Zone, its boundaries may eventually expand westward. As a result, upscale retailers could eventually replace restaurants on Alberni Street's 1100 block, across from the upscale Urban Fare grocery store and Shangri-La Hotel.
Furthermore, as more brands seek space in Vancouver's Luxury Zone, West Georgia Street could see luxury brands move onto its 1000 block. This spring, the 900 block of West Georgia Street, anchored by the Fairmont Hotel Vancouver, will see a Christian Dior flagship join Gucci, Omega, St. John Knits, and Louis Vuitton. As Pacific Centre eventually redevelops its 700 block of West Georgia Street, more luxury space could become available, effectively joining Vancouver's Luxury Zone to the popular downtown mall. Pacific Centre, itself, has a number of luxury retailers including Max Mara, Pomellato, Roberto Coin and Ermenegildo Zegna, not to mention anchors Holt Renfrew, Nordstrom (opening in September) and possibly Saks Fifth Avenue.
Toronto and Vancouver won't be the only destinations for luxury brands in the coming years, however. In oil rich Alberta, Calgary and Edmonton are being considered by a number of luxury brands looking to cater to 'Canada's Texas'. Calgary's Chinook Centre, especially, has seen interest from a number of premium brands, looking to join Burberry, Tiffany & Co., Hugo Boss, and Canada's first Nordstrom location. Max Mara, for example, will open in the mall in October of this year. West Edmonton Mall, as well, is in talks with a number of premium brands, joining upscale new retailers such as Tiffany & Co., Michael Kors and Kate Spade. Rumour has it that the Edmonton mall could also eventually see Nordstrom as an anchor, as well as an unnamed premium department store.
As we move into 2015, Retail Insider will reveal which luxury brands will be opening in Canada. It will be an exciting year ahead as we watch landlords build and improve properties to house premium retailers, as Canada takes its place on the world stage in the eyes of top luxury brands.