Montreal-based landlord Ivanhoé Cambridge has secured seven of Saks Fifth Avenue's 14 announced Canadian Saks OFF 5TH locations. It's a remarkable accomplishment and according to Ivanhoé Cambridge Executive Vice President and Chief Operating Officer of Retail, Roman Drohomirecki, it involved lengthy negotiations and a company-wide collaborative effort.
In March of this year, Saks OFF 5TH opened at two Ivanhoé Cambridge properties -- at Vaughan Mills (north of Toronto) and the Outlet Collection at Niagara. This September, OFF 5TH will open at Ivahnoé Cambridge's CrossIron Mills north of Calgary, and in October at Tsawwassen Mills south of Vancouver. In the spring of 2017 Saks OFF 5TH will open at Quebec City's Place Ste-Foy and at the Outlet Collection at Winnipeg and in the fall of 2018 a downtown location will open at Montreal Eaton Centre which, according to Mr. Drohomirecki, will see heavy traffic from both tourists and locals.
Mr. Drohomirecki explained how Ivanhoé Cambridge's existing relationship with Saks' parent Hudson's Bay Company assisted with negotiations, as Ivanhoé Cambridge looked to differentiate several of its properties by adding Saks OFF 5TH to the mix. Negotiations went well into the evenings on some days, he said, as parties agreed to favourable terms that would see a number of leading Ivanhoé Cambridge properties secure OFF 5TH units. Mr. Drohomirecki wanted it to be known that Ivanhoé Cambridge's success with Saks OFF 5TH was a collaborative effort on the part of the Ivanhoé Cambridge team, and that the outstanding teamwork among departments involved in various stages of negotiations was a crucial factor in successfully securing the retailer. Ivanhoé Cambridge is a Canadian leader in operating outlet and hybrid-outlet centres (the latter are called 'Mills'), and OFF 5TH is an added bonus that will increasingly drive traffic to already busy centres.
Saks wanted premium locations within Ivanhoé Cambridge properties, explained Mr. Drohomirecki, which became a challenge given that the landlord's centres were almost already completely leased. Parties therefore had to get creative in order to find the 30,000+ square foot spaces that Saks OFF 5TH required. The Hudson's Bay Company was serious about rolling out its Saks OFF 5TH concept throughout Canada relatively quickly and given Ivahnoé Cambridge's dominance in both outlet and hybrid-outlet centres, parties saw deals as being strategic for all seven locations. In some instances, existing Hudson's Bay Company real estate was utilized (the Vaughan Mills OFF 5TH was formerly an HBC-owned Home Outfitters location) while its Place Ste-Foy location was formerly occupied by a smaller location for Holt Renfrew.
Bruce Moore, Senor Vice President of Hudson's Bay Company real estate, spoke at Toronto's International Council of Shopping Centres 'Next Gen Spring Program' on Wednesday, June 22. Mr. Moore said that Saks OFF 5TH is on track to open about 25 Canadian stores over the next several years, including about eight in the Greater Toronto Area. Saks OFF 5TH seeks markets having ideally in excess of 500,000 residents, with host centres ideally having strong co-tenants (such as Nike and Polo Ralph Lauren, he said), as well as favourable lease rates/terms for Saks OFF 5TH. Mr. Moore also discussed other Saks OFF 5TH locations, including some that haven't yet been revealed publicly, and we'll report on this next week in a separate feature article.
*Top photo is of Saks OFF 5TH Vaughan Mills. Photos provided by Hudson's Bay Company.