By Craig Patterson
Holt Renfrew has announced a $400-million investment to expand and renovate several of its stores, as the Toronto-based luxury retailer ups its game in the face of competition from the likes of Nordstrom and Saks Fifth Avenue. Holt’s is dropping some brands while working with others to expand their presence, and has announced that it will be closing its standalone men’s store on Bloor Street West in downtown Toronto. The company will also finally launch an expansive e-commerce website, something it’s reportedly planned to do for the past several years. Most of this is expected to happen between now and the year 2020.
"As the Canadian luxury retail landscape evolves, so too is Holt Renfrew. These investments will help us to enhance the first-rate, luxury shopping experience our customers expect from Holt Renfrew. We're securing our position as a top global destination for luxury fashion and beauty products," said Mario Grauso, President, Holt Renfrew. "We're confident in our vision, strategy and team, with a renewed and unyielding focus on exclusive partnerships and curating the world's best luxury apparel and beauty brands."
Privately-owned Holt’s is putting on its A-game at a time when two upscale US-based competitors, Nordstrom and Saks Fifth Avenue, have expanded into Canada by opening large stores. Nordstrom entered Canada in the fall of 2014 with a store in Calgary, and the company now operates six standalone full-line stores in Canada also with stores in Ottawa, Vancouver and three in Toronto. Saks Fifth Avenue opened two Toronto stores in February of 2016, and has since opened a Calgary store at CF Chinook Centre, in the same mall as Canada’s first Nordstrom store.
Despite the competition, Holt Renfrew’s efforts are said to be paying off. In a report in the Globe & Mail, Mr. Grauso told journalist Marina Strauss [Paywall] that Holt Renfrew’s annual sales now exceed $1-billion, up from about $800-million in 2013. Holt’s is reportedly seeing double-digit growth at its existing stores — this is remarkable considering the fact that the chain has closed underperforming stores in Ottawa, Quebec City and Winnipeg, as well as its two off-price HR2 stores in suburban Toronto and Montreal. It’s also remarkable given competition from various high-end retailers, be it multi-brand boutiques, Nordstrom and Saks, or even luxury brands themselves opening their own standalone stores in Canada. Many of the brands carried at Holt Renfrew are opening standalone stores — Chloé has just opened its first standalone Canadian store, as an example, and Bottega Veneta and Valentino are about to announce their store expansions as brands increasingly embrace direct-to-consumer retail.
The Vancouver Holt Renfrew flagship is said to do about $400-million in sales annually. "It’s one of the top six or eight luxury stores in the world,” said Mario Grauso to journalist David Moin in an article in WWD, "in a league with Bergdorf Goodman and Neiman Marcus Beverly Hills, he said. People don’t realize how good the Vancouver market is,” he said.
The Vancouver store is also said to do higher sales than all of Holt’s three Greater Toronto Area stores, with the Yorkdale unit well surpassing $200-million in sales annually. The Bloor flagship will hopefully see a substantial increase as it it expanded and renovated, given that it's now third in the chain in terms of annual revenue.
Mr. Grauso also told WWD that personal shopping accounts for upward of 10% of the business (making its shopping suites extremely productive), with some sales associates generating more than $8-million in sales per year. At that level, those salespeople are earning more than $800,000 annually (10% commission we're told), which means they can also afford to be customers (even without a generous staff discount).
Over the past couple of years, Holt’s has been modifying its retail offerings by dropping certain brands and adding others, creating an offering of luxury labels that are on par with some of the world’s great multi-brand luxury stores. In all, about 40% of brands were dropped over the past two years, with brands such as Giorgio Armani, The Kooples, Zadig & Voltaire, Clinique, Michael Kors and Links of London having parted ways with Holt’s and according to the Globe & Mail article, Holt’s dropped men’s Canada Goose jackets because their distribution had become ubiquitous. Holt’s has significantly reduced its selection of men’s suits, ties and formalwear, adding more casual and edgier brands to cater to a younger demographic that also has tons of cash to spend in its stores. Some international students, as an example, are said to spend more than six-figures annually at Holt’s in Vancouver and at Toronto's Yorkdale store.
Holt’s is also devoting a considerable amount of its space to leased concessions, offering brands such as Chanel, Gucci, Dior, Prada and Loro Piana larger spaces in its stores. The 5,000 square foot Chanel concession at Holt’s in Vancouver is so large and comprehensive in its offerings, some even call it a flagship despite being a shop-in-store. While Nordstrom and Saks Fifth Avenue both feature luxury brand shop-in-stores at some of their Canadian locations, Holt Renfrew has the most expansive offering of concessions, both in terms of size and number, though there are whispers that some of these could jump ship as circumstances change in some Canadian cities.
The newly announced $400-million investment is the second major announcement of its kind for the company in recent years — in 2012, the company announced that it was investing $300-million into its fleet of stores, which included eventually relocating a unit from Toronto’s CF Sherway Gardens to Mississauga’s Square One.
Technology will be part of the big changes as well — e-commerce will be revamped after a considerable delay, considering its website launched with a handful of items for sale in 2015. Holt’s is also investing in IT that includes new POS systems for 2019 as well as new merchandising and finance systems.
Holt Renfrew has provided information on the expansion and renovation of four of its current eight stores — that number will be seven when Holt’s Montreal flagship closes as it merges with nearby Ogilvy to create a massive ‘Holt Renfrew Ogilvy’ store which is currently under construction. The following is an overview of what’s been revealed by Holt’s, as well as some details from sources familiar with these and other stores including an Edmonton unit with an uncertain future.
Vancouver 737 Dunsmuir Street/CF Pacific Centre
The 190,400 square foot CF Pacific Centre Holt Renfrew is said to now be the flagship template for other Holt Renfrew store renovations. The Janson Goldstein-designed store relocated to its current 737 Dunsmuir building in 2007 after being located in a much smaller 68,000 square foot space about a block south in the same centre. The store annexed 40,000 square feet of space and now features a wide assortment of luxury brands, including some exceptional concessions. Chanel, as discussed above, has a considerable presence on the store’s street level, and larger updated boutiques including Gucci, Fendi, Louis Vuitton, Dior, Tiffany & Co. and others have opened over the past couple of years.
The store now boasts about 80 vendor shops. In the 30,000 square foot leather goods hall on the store’s ground floor, there are boutiques for the likes of Gucci, Fendi, Louis Vuitton, Dior, Céline, and others. The 20,000 square foot jewellery hall, also at street level, houses the likes of Tiffany & Co., David Yurman and Bulgari, which opened its 450-square-foot Vancouver boutique inside of Holt’s earlier this spring. Holt’s expanded its women’s shoe hall to about 8,500 square feet last year, complete with an adjacent Ladurée boutique as well as branded walls (Holt’s called them ‘shops’) for some top luxury brands. The 21,000 square foot men’s store, located on the lower level with a 16,000 square foot cosmetics hall, houses boutiques for Berluti, Louis Vuitton men, Fendi, Givenchy, Moncler and Brioni, with a Christian Louboutin area in men’s footwear. The store’s restaurant also recently rebranded as Colette Grand Café after a minor renovation.
Sources at the Vancouver store say that the store’s explosive sales represent about 40% of the company’s entire volume, which is due in part to catering to Asian shoppers with leading brands, as well as accepting Chinese payment methods such as AliPay. The store’s personal shopping suites are also doing considerable volume for the store — the 7,000 square foot space, complete with luxury suite ‘The Apartment’ is unlike anything in Canada to date.
Montreal ‘Holt Renfrew Ogilvy’ on Ste-Catherine St. W.
A newly merged ‘Holt Renfrew Ogilvy’ store is expected to be completed by the year 2020 at 1307 Ste-Catherine Street West — and when finished, the existing 83,000 square foot Holt Renfrew store at 1300 Sherbrooke St. West will close. The expanded 250,000 square foot Holt Renfrew Ogilvy on Ste-Catherine Street, with a facade restoration that will be designed by Gensler and with its interior designed by Jeffrey Hutchison & Associates and with support from Lemay, will become the largest in the Holt Renfrew chain, and will feature an impressive roster of luxury branded boutiques throughout.
Chanel and Louis Vuitton will both occupy significant spaces on the ground floor of Holt Renfrew Ogilvy, along with boutiques for Christian Dior (in a 2,000 square foot boutique), Fendi (700 square feet), Hermès (3,000 square feet, or about three times the size of its current Holt’s space), Prada (2,300 square feet) and jeweller Tiffany & Co. — Burberry is said to still be negotiating for space in the new store, which a source said is complicated given the proposed configuration. As well, a Colette Grand Café designed by Paris-based Laplace will open within the expanded space. A 23,000 square foot beauty hall will also move into the basement of the Ogilvy building as construction progresses.
Adjacent to the store will include a Four Seasons Hotel and private residences on the site of the former Hotel de la Montagne. The new Four Seasons Hotel will include 163 hotel rooms priced from $600 per night, as well as 18 of the city’s most expensive condominium apartments, priced between $4 million and $20 million, averaging about $1,500 per square foot.
“Montreal’s luxury stores aren’t doing the volume like they are in Vancouver and Toronto,” says one source at the company, wishing not to be identified for this article. “It’s hugely risky and possibly a mistake to be investing so much into an uncertain project, especially when some existing vendors are unhappy with their current sales performance in the Montreal market”.
Saks Fifth Avenue last year announced that it would open a 200,000 square foot store at the back end of the Hudson’s Bay building at 585 Ste-Catherine Street West, though its future is now uncertain.
Toronto Bloor Street West
The Holt Renfrew ‘mothership’ at 50 Bloor Street West will see an overhaul that will also see a separate men’s store move back into the larger store building. A 16,500 square foot Holt Renfrew Men store opened at 100 Bloor Street West (corner of Bellair Street) in September of 2014, directly across from Harry Rosen’s 55,000 square foot flagship. “Holt Renfrew Men wasn’t performing up to standard at 100 Bloor,” said a source at the company about the store. Larry Rosen, CEO of Harry Rosen, said in a recent interview that sales at his Bloor Street flagship increased after Holt’s opened across the street.
Menswear will be moving back into the 190,000 square foot Holt Renfrew store at 50 Bloor Street as a result, the new men's space will span about 25,000 square feet on one level. Women’s shoes, which temporily relocated to the store’s concourse level, will span an impressive 10,000 square feet with boutiques for Christian Louboutin, Prada, Gucci and Christian Dior (the department is expected to be unveiled late 2018/early 2019). The store’s beauty hall will span almost 20,000 square feet over two levels, according to a source at the store, while the store’s ground-level leather goods department will expand to just over 20,000 square feet.
The mezzanine-level ‘Café at Holts’ will see a renovation and will open next year as Colette Grand Café, which will be designed by Alex Cochrane Architects. Gensler and Kramer Design Group are designing the interior as well as a new facade that will be a modernization of the current stark white marble facade that has characterized the building since when it was built in 1978.
“Moving men’s back into the main store is a good idea,” said a source at Holt Renfrew. “The little Bloor store has no shop-in-stores like the much more comprehensive and flashy Vancouver store and even the Calgary store, and some were confused that menswear was separated. Maybe now mens wear will get the attention it deserves,” they said.
Holt Renfrew Yorkdale Shopping Centre
The 120,000 square foot Holt Renfrew store at Yorkdale, which was itself considered to be a design prototype when it was expanded from 65,000 square feet in 2013, will again see an expansion with the addition of 10,000 square feet. That expansion will be made possible by taking over a former 9,550 square foot Anthropoligie store at Yorkdale, which closed in December. A hallway leading to valet parking will be relocated to a newly built corridor beside the mall’s Apple store, with construction on the expansion set to commence this fall.
The Yorkdale Holt renfrew store, which is said to do about 25% of the company’s total sales, has a rather unusual design that includes several large concessions for brands including Chanel, Prada and Miu Miu. A Gucci concession will be relocated to become a “world of” Gucci, which will reflect the brand’s newest store design and carry ready-to-wear as well as leather goods and footwear. A new Fendi women’s ready-to-wear and leather goods boutique will open in the Yorkdale Holt’s, as well as a new Balenciaga boutique (making a standalone Yorkdale unit less likely, at least for now). Fendi recently opened a shop-in-store men’s boutique in the store’s highly productive men’s department, and a new Prada men’s boutique will be opening as well. Sources at the store say that a boutique for Dior Homme is expected, and some are also saying they’ve heard that a Louis Vuitton men’s shop could open in the men’s store, though others question if that will be the case if Louis Vuitton ends up exiting Holt’s for a standalone store space in Yorkdale next year.
Gensler and Kramer Design Group are responsible for the Yorkdale stores’s facade as well as its expansion and renovation, which will also see two more personal shopping suites added to the store (there are already several, including the company’s first ‘The Apartment’ which debuted in 2013).
Holt Renfrew also operates stores in Calgary, Edmonton and in Mississauga, and Holt’s hasn’t made any specific comments about these stores as part of its recent announcement. The 140,000 square foot Mississauga store at Square One, which opened in the summer of 2016, was designed by Janson Goldstein and is one of the most dramatic retail spaces in North America with ample marble, natural light, and high ceilings. The store is said to not be performing nearly to the same level as the Yorkdale store and management is concerned. “Sales are a bit higher than the former 33,000 square foot Sherway store,” said one source.
The 35,000 square foot Edmonton store at the downtown Manulife Place, which some have speculated will eventually close, is said to have seen sales drop over the past three years or so to under $1,000/square foot. If the Louis Vuitton boutique were to exit the store and relocate, as some are now speculating, it could signal the end of Holt’s run in Edmonton, unless Holt’s were to relocate to a suburban shopping centre. The Edmonton market is affluent but also isn’t quite into designer brands as its neighbours to the south, in Calgary.
The Calgary store, as well, could see some movement as Louis Vuitton prepares to exit Holt Renfrew’s downtown Calgary store for a new 4,700 square foot space at CF Chinook Centre in the suburbs on Calgary’s south side. Other brands at Holt’s, including Chanel and Hermès might also consider leaving, according to a source, given the draw Louis Vuitton has in terms of bringing shoppers into the store. A source speculated that if brands such as Chanel and Hermès were to leave Calgary’s Holt’s, they’d end up exiting the market rather than moving to a suburban mall, which should be a concern for Holt’s which operates a Calgary location said to be about 150,000 square feet over four levels, with about 120,000 square feet used for retail.
Hit hard by low oil prices that resulted in a recession in Alberta, Holt’s sales were said to have gone down as many jobs in the downtown core were lost. As a result, Holt’s Calgary hasn’t seen the renovations that had been previously announced, including the addition of a new restaurant that had been planned to open a couple of years ago. Following the recession, as well, Prada shuttered its men’s concession at the Calgary downtown Holt’s store.
It will be interesting to watch Holt Renfrew’s transformation between now and the year 2020. The gloves are off in the fight for dominance in luxury retailing in Canada, and we’ll be reporting extensively as we continue to research and learn more. Nordstrom’s highly productive Vancouver store, which boasts an expansive roster of luxury brands, is said to be selling more than all three of Nordstrom’s Toronto stores combined. And Saks Fifth Avenue, as well, is said to be doing lower numbers than some had expected in Canada and its Calgary store, which opened over the winter, lacks many of the luxury ready-to-wear brands found at its two Toronto stores. Ultimately, homegrown Holt Renfrew could stand to continue to dominate luxury retail as it pertains to women’s clothing, accessories and shoes, though Harry Rosen, which has considerably more suiting for men than what Holt’s currently offers, will likely dominate for professional men merely for the fact that it carries a comprehensive selection not found elsewhere in the country.