By Craig Patterson
Iconic Canadian footwear chain Town Shoes will cease to exist after 66 years in business. The company has 38 stores across Canada, and the announcement will be of concern to some landlords that are already grappling with vacancies in their malls.
The news also comes as a shock after Town Shoes announced in April of this year that it was revamping its operations by adding new contemporary designer lines in an effort to gain market share. As part of that strategy, several locations saw renovations to display brand names such as See by Chloé and Navy by Jil Sander. The announcement isn’t totally unexpected, however, given intense competition in the Canadian footwear space as mono brand and multi-brand retailers expand their offerings and operations.
American parent company DSW Designer Shoe Warehouse paid $62-million when it bought a 44% stake in Town Shoes in the spring of 2014. That deal helped DSW open its large format concept stores in Canada — Town Shoes’ expertise and distribution network were utilized as part of the expansion which saw 27 DSW stores open in regions across Canada.
DSW acquired a 100% stake in Town Shoes in May of 2018 and at the time, we were told by suppliers that they had been informed that the Town Shoes nameplate would be shuttered. That information was denied by the company and thus was not reported in Retail Insider. Now DSW confirms that all Town Shoes stores in Canada will be closing by the end of its fiscal year.
Town Shoes has an extensive history in Canada. It was founded by entrepreneur Leonard Simpson in 1952 when he took over a failing store at the Sunnybrook Plaza in Toronto (the shopping mall was a new concept at the time). A second location opened soon after at the ‘Lawrence Plaza’ which is located south of the Yorkdale Shopping Centre.
In the 1960’s, Town Shoes opened a shop-in-store on Toronto’s ‘Mink Mile’ inside of upscale multi-brand retailer Harridge’s at 131 Bloor Street West in The Colonnade, and the company maintained a Bloor Street West presence thereafter until last summer when it closed its standalone store at 95 Bloor Street West. That retail space is currently occupied by menswear retailer Strellson.
Town Shoes was also a sponsor of Toronto Fashion Week for many seasons, supplying shoes for the runway shows. The company was also known to have collaborated with Canadian designers on exclusive lines. Town Shoes has a close tie to the fashion world in Canada and the news of its closure will be shocking for many.
Town Shoes is almost exclusively a mall-based retailer (it has a standalone store in Vancouver), with locations in some of Canada’s top shopping centres including Yorkdale Shopping Centre and CF Toronto Eaton Centre in Toronto, West Edmonton Mall, and CF Pacific Centre in Vancouver. As a result, some landlords will have little difficulty leasing vacated Town Shoes retail spaces. At the same time, some mall landlords are now saying that it’s a difficult time to lease retail spaces in some markets and as a result, the loss of Town Shoes will pose a challenge as other retail chains shutter locations in Canada. Footwear retailers Nine West and Rockport recently closed their stores in Canada, and various other chains such as Guess are reducing their store counts in this country. On top of that, millions of square feet of retail space has been vacated by Target and Sears Canada and landlords continue to seek options to repurpose these spaces.
DSW will continue to maintain its other nameplates in Canada and as well, the company recently launched a new sneaker concept called GRAIL in Vancouver. The company says that it plans to expand GRAIL stores into parts of Canada as well as the United States, recognizing the importance of streetwear and casual shoes to a younger generation which is less formal than those of the past. GRAIL is located on Vancouver’s upscale South Granville retail strip and its space was made possible by taking half of the existing Town Shoes real estate at 2867 Granville (the Town Shoes store there became smaller as a result).
The announcement that Town Shoes will be closing was made as part of DSW’s financial reporting on August 28, which noted a second quarter revenue increase of US $795-million, with a comparable sales increase of 9.7%. The comparable number excludes DSW’s Canadian retail segment, which is said to be struggling.
A significant revamp was in the works for Town Shoes, as was an eventual expansion into the province of Quebec. Simon Nankervis, president of Town Shoes and chief commercial officer of DSW Inc., told Retail Insider journalist Mario Toneguzzi in an interview last year that the company has had a “real focus on revitalizing the Town Shoes banner to position it back to the brand it was which was the leading brand in fashion footwear.”
“And a place that a consumer can go and actually trust they’re being given the latest true authority on fashion footwear . . . Our Town Shoes banner itself has contracted. We closed a number of under-performing stores as we looked to re-position it. It really is now a banner that is focused predominantly on full service, High Street and A / B mall presentations around better and affordable luxury product. It is about merging the fashion footwear brands to emerging fashion trends and focused on that fashion consumer who is looking for the latest and greatest in quality fashion footwear,” he said.
As part of its plans for growth, Quebec was on Town Shoes’ radar. “It doesn’t make sense to not talk to those 21 per cent of the Canadian population,” said Mr. Nankervis.
Competition in the footwear space is greater than ever in Canada. New retailers are entering the market like never before, while existing retailers are expanding their footwear offerings. Department stores and various multi-brand shoe retailers are expanding their selection and at the same time, some mono brands are also opening their own stores in Canada, not to mention e-commerce sites that further add to the already fierce competition in some segments.
Town Shoes’ biggest competitors, all upscale multi-brand Canadian retailers, include Browns Shoes, Jean-Paul Fortin and David’s Footwear, all of which are in the midst of their own expansions. Montreal-based Browns Shoes, which continues to open several stores each year under its Browns, B2 and Browns Outlet nameplates, carries a range of brands that include private-label offerings as well as designer shoes at various price points. Quebec City-based Jean-Paul Fortin shoes opened its first store outside of Quebec last year at Toronto’s Yorkville Village, with plans to roll out the new concept to markets nationally, such as Vancouver.
Toronto-based David’s Footwear, which currently operates four stores just in Toronto, has plans to expand to a chain of approximately 20 store locations coast-to-coast. David’s carries high-end footwear from leading brands, and the retailer will be expanding into Ottawa this fall with a store at CF Rideau Centre, marking the beginning of an expansion that could target cities such as Vancouver, Calgary and possibly Montreal. At the same time, the company’s Capezio and Duet retail operations have ceased as part of the overall David’s repositioning and those stores, all in Ontario, have closed.
Nordstrom Rack, which carries a wide assortment of discounted shoes, now operates six stores in Canada after entering the market in 2018. The Hudson’s Bay Company’s off-price division Saks OFF 5TH entered Canada in the spring of 2016 and it already operates 17 stores, with plans to operate about 25 stores before the end of the decade. TJX Companies' nameplates Marshalls and Winners, which are both still expanding rapidly in Canada, also feature discounted shoe offerings that are proving to be popular with Canadians.
Canada’s biggest mono-brand shoe retailer is Montreal-based Aldo, which boasts more than 3,000 stores globally. Aldo continues to open stores as it offers reasonably priced footwear from its own label, as well as with its Call it Spring and Globo Shoes nameplates.
DSW's shares surged 20% on Tuesday after reports the reports of strong company earnings, making it the biggest one-day gain in the company's history.
We’ll update this article when Town Shoes begins closing its stores in Canada. Deep discounts are expected — when the Bloor Street store closed in Toronto last summer, some styles were sold at more than a 90% discount.