At no time in Canadian history has there been more luxury-inclusive department stores operating in Canada. For decades, Holt Renfrew & Co. had a virtual monopoly in this country, particularly in womenswear, footwear and accessories (Harry Rosen dominated in menswear). Over the past three years, however, things have changed substantially — Nordstrom opened its first Canadian store in Calgary in the fall of 2014 and now has five (and soon, six) locations, and Saks Fifth Avenue debuted its first Canadian flagship at Toronto’s CF Toronto Eaton Centre in February of 2016. More Canadian stores are confirmed to be on the way for both American retailers.
It’s not a surprise to see so much luxury in Canada, according to luxury retail consultant Brian Winston (referred to as a ‘Guru of Luxury' by the hosts of ‘What She Says’). He referred to what he’s witnessing as a ‘department store wars’ in Canada, and he has come up with a ranking of what he considers to be the country’s top luxury-carrying department stores, based on a number of metrics.
In summary, Mr. Winston ranks five large-format Canadian retailers as follows, in terms of luxury offerings:
In a conversation with Mr. Winston, he went through and described each of these stores, including their strong points as well as some challenges. The following is a breakdown of each of the five stores.
Saks Fifth Avenue
Mr. Winston ranked Saks Fifth Avenue as being the top luxury department store in the country, based on several factors. He noted Saks’ breadth and depth of designer product offerings, as well as how its stores buy many collections in multiple product categorizations for some brands that include ready-to-wear, handbags and accessories, and footwear. A number of the world’s top luxury brands are carried at Saks’ downtown Toronto flagship that feature hard-shops for their collections, including Dior, Saint Laurent, Givenchy, Celine, Valentino, and even pricey Azzedine Alaia.
Being able to buy a label head-to-toe is key to Saks’ value proposition, he noted, and Saks stocks a wide variety of sizes from various designers. Holt Renfrew, in comparison, has split size ranges across the country and in some instances, smaller sizes will end up in the Vancouver Holt’s because of the city’s affluent Asian population, he noted. This presents issues when the sizes are not present and customers have to prepay to get their size sent from another city.
Saks is the strongest store in Canada in terms of jewellery offerings, explained Mr. Winston. Boutiques for Chopard, Piaget, De Grisogono, Boucheron and others are present at the downtown Toronto Saks store — competitors such as Holt Renfrew and Nordstrom don’t even come close, he said. Women’s shoes are also a strong point, he noted, with a number of premium brands being carried at both of Saks’ Canadian stores. He thinks Holt Renfrew’s shoe offerings/ availabilities are a step above Saks, however, given the vast boutique-lined shoe halls at Holt’s Vancouver and Yorkdale locations.
Given Saks’ large business in the United States, Mr. Winston figures that a number of top luxury brands carried exclusively in retailers such as Holt Renfrew will eventually transfer allegiance to Saks, if they haven’t already. Saks can control more because it has “a bigger pencil” according to Mr. Winston and ultimately controls larger orders and power.
Saks currently operates two Canadian stores — in downtown Toronto, as well as at CF Sherway Gardens. Two more locations are confirmed to be opening, including a spring 2018 Calgary store at CF Chinook Centre, and an expected fall 2018 opening at the back end of Hudson’s Bay in downtown Montreal. A Vancouver location is also expected to be announced shortly.
Mr. Winston notes that Holt Renfrew has an extensive history in Canada, having operated since 1837. “They’ve owned the market for a long time, and they are first-in-mind for luxury for many consumers,” he noted, though he thinks that competitors will change that. Mr. Winston has been involved in Canadian retail since the late 1970’s and he described historically how Holt Renfrew went more upscale after the closure of luxury women’s department store Creed’s at Toronto’s Manulife Centre in 1990 and where it has moved over the time since then.
Holt Renfrew carries some of the world’s top brands, says Mr. Winston, though he explained that the retailer has only seven stores (compared to Saks’ 38 in the United States). Because of its smaller size, he thinks that Holt Renfrew lacks the volume to determine the exclusives that its wants. As a result, a number of brands may choose to jump ship, and a few already have — Tom Ford women's clothing, The Kooples and Zadig & Voltaire are no longer carried at Holt Renfrew, and luxury Italian brand Giorgio Armani’s womens concessions are no longer open in the Bloor Street, Montreal and Vancouver flagships (a Brunello Cucinelli women's concession is currently under construction in Armani's former space at the Bloor St. Holt's).
One of Mr. Winston’s concerns about Holt Renfrew is its limited stock and styles — he described how Holt’s will buy a few styles each year, and the lack of availability can be aggravating both for customers and sales staff. As a result, stock at some stores appears to be minimal. Additionally there has been an “attitude issue” from both floor and buying staff over the years which has permeated the industry, he said.
Mr. Winston pointed to Holt Renfrew’s “inconsistency” over time, which he attributes to the retailer's management turnover over the past several years. He did note that a considerable percentage of store space is devoted to leased departments (aka concessions), which guarantee a certain return on square footage regardless of results.
Holt Renfrew is making some changes, however — some brands are being dropped, and new ones are being added. As well, the company continues to renovate and expand its existing stores. The top-selling Vancouver flagship is seeing a substantial expansion/renovation that will make it even more world-class (including the recent unveiling of a new lower-level beauty hall). The Montreal store will eventually merge with sister retailer Ogilvy, resulting in the closure of the existing Holt Renfrew on Sherbrooke Street West. Toronto will also see some changes to its Yorkdale and Bloor Street stores, to be discussed at a later date.
Mr. Winston noted that the Hudson’s Bay Company has an extensive history in Canada, and that it has carried luxury offerings at its flagship stores for some time. ‘The Room’ women’s luxury department at the downtown Toronto and Vancouver flagships carry a variety of top luxury brands. He described how Margery Steele was instrumental in curating ‘The St. Regis Room’ as it once was at Simpson’s (Hudson’s Bay discontinued Simpson’s in 1991 and converted Simpson’s downtown Toronto flagship into a Bay store), and when Ms. Steele passed, her replacement “wasn’t the same. Ms. Steele had an intimate equity relationship with her clients and they trusted her sense of style and taste," he noted.
Mr. Winston went on to discuss Nicholas Mellamphy, who was brought in by Bonnie Brooks to overhaul Hudson’s Bay’s luxury offerings. Mr. Winston described how after Mr. Mellamphy's boutique ‘Hazel’ went bankrupt and shuttered, Mellamphy worked to pull strings to get brands to go into The Room, despite Hudson’s Bay lacking the customer breadth and depth to support the collections. Mr. Winston also described many of The Room’s brands as being somewhat obscure and requiring large stock commitments. “They would bring in 12 to 14 pieces from Mary Katrantzou,” said Mr. Winston, “and you need 12 to 14 customers who don’t know each other to buy those pieces at full price. There are not that many customers in the two markets.”
Despite its challenges, Brian Winston ranked Hudson’s Bay above Nordstrom in terms of luxury designer offerings, given Hudson’s Bay’s daring assortment of fashions that are among the boldest in the country. Mr. Winston also described The Room’s designer shoes as “being limited and with a lot of newness to the market”. (In Toronto, ’The Room’ shoes are mostly in the women’s footwear department on another floor).
Regarding menswear, Mr. Winston noted that Hudson’s Bay has amplified its luxury offerings, particularly at the downtown Toronto flagship. Brands such as Balmain, Jil Sander and JW Anderson can be found on the men’s floor, alongside boutiques for brands such as Eleventy, PS Paul Smith, Sandro and The Kooples.
Mr. Winston noted that while Nordstrom carries a number of luxury labels at its Canadian stores, the selection for each brand is less than that at Saks and Holt’s. He discussed how with brands such as Manolo Blahnik, Nordstrom will carry a handful of ‘classic’ styles, but not the extensive “stylistic” offerings found at some competitors. He explained that Nordstrom is looking to show that they are “in designer” in terms of brands that it carries, but that it lacks the depth to make many collections “meaningful".
Jimmy Choo was an example that Mr. Winston pointed to — he says that Nordstrom’s Toronto stores carry three women’s styles, whereas a more comprehensive luxury retailer would carry between 15 and 18 styles. He also said that while Nordstrom carries a number of notable luxury brands in Vancouver, the Toronto stores struggled to secure some top labels that were already committed to previous contracts with Saks and Holt’s.
In some respects, as a result, Nordstrom is carrying more innovative brands in its Canadian stores. Mr. Winston pointed to the company’s SPACE departments in Vancouver and Toronto as an example. He also noted that Nordstrom is carrying a selection of evening gowns from designers such as Marchesa and Brandon Maxwell and while beautiful “they are not selling”, he says. He noted that evening gowns are worn infrequently and in a “conservative" market such as Toronto, as he put it, women are looking to want “several wears” from a $7,000 gown or piece of clothing, at the very least.
Mr. Winston also described Nordstrom’s luxury menswear offerings as carrying standard brands and pieces, and that the selection “lacks consistency”. He doesn’t think that Nordstrom is “fashion-forward enough” and that pieces “do not make a statement”. He did note that Nordstrom carries Giuseppe Zanotti footwear — an expensive brand popular with youth willing to shell out for a name brand.
Nordstrom ranked below Hudson’s Bay in Mr. Winston’s mind, though he was referring primarily to the downtown Toronto and Vancouver Hudson’s Bay flagships, which both carry upscale women’s department ‘The Room’, as well as some luxury menswear brands.
La Maison Simons
Brian Winston ranked La Maison Simons in fifth place in terms of its luxury offerings, though he noted that Simons does carry a variety of luxury brands for men and women. “Their focus is on French luxury,” he said, noting that a $150 private-label purse might be found next to a $3,000 style. “Simons has been great at taking European influences and recreating them as private labels,” noted Mr. Winston. Women’s collections such as Balmain and Nina Ricci can be found at Simons, though Mr. Winston noted that there are only a handful of each style.
While Simons lacks extensive offerings in shoes and bags, Mr. Winston explained that the retailer’s hosiery selection is “the best in Canada, unquestionably”. He also says that he “loves” Simons’ home department, including how it is edited and its numerous private label offerings.
Regardless of who’s “best”, Mr. Winston says that Canadian luxury retailers have competition from south of the border. “These customers can and will easily travel to New York City by plane to shop in department stores as well as mono-branded boutiques” he said, “and they can also shop online”. Luxury brands are now available more than ever on various ecommerce sites, adding further competition to local brick-and-mortar retail.
Ultimately, the challenge will be to “convince the shopper to pay full-price for what’s in-season” and as a result, the department store wars in Canada will continue. As a result of competition from Canadian and American retailers, not to mention ecommerce, retailers are upping their customer service in order to best cater to clients. “Special delivery, alterations, and something special,” is key he noted. “It is still a very fickle market,” according to Mr. Winston, “and the retailers that cater to luxury consumers the best are the ones that will come out ahead, and not all of them will survive. The sheer size of the market is an issue.”
*Top photos are credited as follows:
-Saks Fifth Avenue CF Sherway Gardens: http://alexrebanks.com
-Nordstrom CF Sherway Gardens: Nordstrom/Cadillac Fairview
-Holt Renfrew Square One: Retail Council of Canada