Holt Renfrew has revealed that it will close its smallest location this year, as it prepares to open a massive replacement flagship several kilometres away. The news reflects Holt's strategy to operate stores in excess of 120,000 square feet, bringing the future of its Edmonton store into question, according to one expert.
Holt Renfrew's 33,670 square foot CF Sherway Gardens store became part of the mall's expansion wing when landlord Cadillac Fairview expanded the mall in the fall of 2015. Last year, inside sources confirmed that Holt Renfrew was to close the Sherway store as part of a deal to open a 130,000+ square foot replacement location at Mississauga's Square One Shopping Centre. Saks Fifth Avenue will open a 132,000 square foot store at CF Sherway Gardens on Thursday, February 25.
Last year, Holt Renfrew closed two of its smallest stores -- a 33,000 square foot unit at Quebec City's Place Ste-Foy, and a 36,000 square foot store at 240 Sparks Street in Ottawa. Prior to that, Holt Renfrew announced that it was in the process of spending over $300 million to update its fleet of stores, adopting a new 120,000+ square foot footprint similar to American Neiman Marcus locations. Holt's Toronto Yorkdale Shopping Centre store was expanded to about 120,000 square feet in early 2014, with the company subsequently announcing expansions of its Vancouver, Calgary and Toronto Bloor Street flagships. Holt's 84,000 square foot Montreal store will close late next year as a 220,000 square foot combined Ogilvy/Holt Renfrew store opens nearby.
Holt Renfrew's recent efforts to overhaul its stores and enhance its online presence has been costly, said HRC Advisory president Farla Efros. Competitors Saks Fifth Avenue and Nordstrom are expanding into Canada and in order for Holt's to remain competitive, it needs to "focus resources into ensuring they can keep their customers loyal and enhance their overall customer experience". Ms. Efros went on to say that it might be best for Holt's to shutter underperforming stores in order to concentrate on larger stores that "can deliver growth and differentiate themselves against its new lineup of competitors". Doing so would require eliminating stores which she referred to as "distractions", which include Holt's Sherway and Edmonton stores.
After the closure of Sherway Gardens, Holt Renfrew will be left with seven locations, including the new 130,000 square foot Mississauga Square One store. Once the Montreal location closes, each Holt Renfrew location, except for its Edmonton store ,will measure in excess of 120,000 square feet.
Holt's Edmonton store, which measures about 37,000 square feet over two floors, is located within the downtown Manulife Place retail podium. The store opened in 1983 and at the time, was one of Holt's largest. Last year, Holt Renfrew president Mark Derbyshire said that the company is committed to the Edmonton market, though it's now clear that given Holt's strategy to operate stores in excess of 120,000 square feet, something is going to happen to the small, dated Edmonton store.
If the Edmonton store were to remain open in its current form, it would be the 'ugly duckling' of the chain -- not only is it too small for Holt's new retail positioning, it has only seen minor updates over the years, and features few of the luxury brands available in Holt's larger stores. If Holt Renfrew were to remain in downtown Edmonton, it would require new retail space to expand. Some speculate that Holt's could end up occupying much of the retail podium of Manulife Place, as sources say retailers Zenari's and Maison Birks will be leaving, with some questioning the future of other retailers occupying both retail levels of Manulife Place.
West Edmonton Mall president David Ghermezian recently told news publication Metro that Holt Renfrew had been negotiating to open a large store in a suburban Edmonton mall. It is unclear, however, if negotiations are ongoing or if a potential deal is off the table. What is clear is that something has to happen to Holt Renfrew in Edmonton, be it a new downtown store, an expanded existing location, a new suburban unit, or the possibility that Holt Renfrew will decide to abandon the Edmonton market altogether.
If Holt's were to exit Edmonton, it would be a blow to the city's retail scene, particularly when compared to what's available in Calgary. West Edmonton Mall president David Ghermezian recently confirmed that plans to put Nordstrom in his mall had stalled, as the Seattle-based retailer slows down its Canadian expansion "so that they don’t make the same mistakes as other major retailers made coming into Canada". For those keeping score, Calgary has a 147,000 square foot downtown Holt Renfrew, a 140,000 square foot Nordstrom at CF Chinook Centre, and there's the possibility that Saks Fifth Avenue will also move into Calgary's Chinook Centre.