Holt Renfrew's planned e-commerce site will compete with Saks/HBC and Nordstrom

[

Image Source

]

Holt Renfrew

is reportedly in the process of creating an e-commerce website as it anticipates competition from 

Nordstrom

and

Saks Fifth Avenue

. Currently, few Canadian retailers sell luxury merchandise online. According to Holt Renfrew CEO Mark Derbyshire, the new e-commerce site will be both innovative and impressive.

Derbyshire was interviewed by the

Financial Post

's

Hollie Shaw

over the weekend during the launch of the

newly renovated Holt Renfrew

at Toronto's

Yorkdale Shopping Centre

. Besides discussing how Holt Renfrew plans to foster top-notch customer experiences in its stores, Derbyshire described the company's proposed e-commerce site as "one of the most innovative sites [he] can imagine" and that he is "building up high expectations" as a result. 

Holt Renfrew's e-commerce endeavours come with good timing. In the next year or so,

The Hudson's Bay Company

intends to create a comprehensive e-commerce site for its Canadian

Hudson's Bay

department stores division with the help of Saks Fifth Avenue's web team. Saks also intends to launch its

own Canadian e-commerce site

. Saks Fifth Avenue and Holt Renfrew will become fierce competitors, as both carry many of the same designers and concessions. 

Holt Renfrew may take some comfort in the fact that

Nordstrom

doesn't plan to launch a Canadian e-commerce site for the immediate future. Nordstrom does ship to Canada, however, through its American website:

www.nordstrom.com

. A source at Nordstrom tells us that the company intends to eventually launch a Canadian e-commerce site, though the source wasn't able to provide any specific timelines. Nordstrom is enjoying

substantial sales

via its American e-commerce site, as well as

significant growth

Canadian menswear retailer

Harry Rosen

has run an e-commerce site for several years and according to CEO Larry Rosen,

sales are growing

. Harry Rosen will continue to compete with Holt Renfrew for menswear sales and both will see increased competition as Saks Fifth Avenue and Nordstrom roll out their menswear offerings to Canadians.

Source:

Financial Post article

by

Hollie Shaw

[

Holt Renfrew website

]

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Bonnie Brooks named Ivey Business Leader of the Year


LONDON, ON – Bonnie Brooks, Vice Chair Hudson’s Bay Company, will be the first woman to receive the Ivey Business Leader Award and will address Canada’s most prominent business leaders at the annual gala dinner in Toronto on October 30, 2014.

Ms. Brooks joined Canada’s pioneering retailer, Hudson’s Bay, as President and CEO in 2008 and was appointed to President of the Hudson’s Bay Company in 2012 when Lord & Taylor (USA) was rolled into Hudson’s Bay Company. Successfully engineering a major turnaround at The Bay over the past five years, she was named Vice Chair in 2014 – one more achievement in a ground breaking career in the retail fashion industry which spans over three decades and three continents.

“Bonnie Brooks is a visionary leader in her field. Always ahead of the curve, she has a knack for boldly seizing opportunities that many do not have the courage to pursue, while simultaneously anticipating trends that will change the competitive landscape in the medium term,” said Bob Kennedy, Dean of the Ivey Business School. “I am proud to say Bonnie is one of our graduates. She embodies so many of the leadership qualities we aim to develop at the School, and we are proud of her success.”

Prior to joining Hudson’s Bay Ms. Brooks served in several retail leadership positions, including President at Lane Crawford Joyce Group, the Hong Kong based retail giant with over 500 stores in Asia, between 1997 and 2008. Previously she held executive roles with Holt Renfrew Canada including Executive Vice President / General Merchandise Manager.

“Bonnie Brooks has a corporate reputation that is second to none not only in Canada but also internationally,” said Kevin O’Brien, HBA ’93, Chair of the Ivey Business Leader Award Dinner. “She has defined herself as an outstanding leader within an extremely competitive industry serving as an inspiration for the Canadian business community.”

The Ivey Business Leader Award will be presented at a black-tie dinner at Toronto's Ritz Carlton Hotel. Proceeds from the annual event have supported the Ivey Alumni Association Toronto Chapter HBA and MBA Scholarships established to attract top students to the School and the Toronto Alumni Professorship in Business Leadership, and will now support the new Ivey Building. 

Ms. Brooks, an Ivey MBA graduate, is also Chair of the Board of Trustees of the Royal Ontario Museum, a member of the Board of Directors of Empire Company Limited (Sobeys), a member of the Board of Trustees for RioCan Real Estate Investment Trust and a member of the Foundation Board of CAMH.

She joins an esteemed list of past Ivey Business Leader Award recipients demonstrating leadership in both business and their communities. Past recipients of the award include:
  • 2013: George Cope, CEO Bell Canada
  • 2012: Rick George, Former CEO Suncor Inc.
  • 2011: Ed Clark, Group President and CEO of TD Bank Group (TD) 
  • 2010: Peter Munk, Founder and Chairman of Barrick Gold Corporation
  • 2009: Richard J. Currie, Past Chairman, BCE Inc. and former President, Loblaw   Companies Limited and George Weston Limited
  • 2008: Dominic D'Alessandro, President & CEO, Manulife Financial
  • 2007: Claude Lamoureux, President & CEO and Robert Bertram, Executive Vice-President, Investments, Ontario Teachers’ Pension Plan
  • 2006: Isadore Sharp, Chairman and CEO, Four Seasons Hotels Inc.
  • 2005: Peter Godsoe, former Chairman and CEO, The Bank of Nova Scotia
  • 2002: Gwyn Morgan, President and CEO, EnCana Corporation
  • 2001: Harrison McCain, Chairman, McCain Foods Limited, and G. Wallace  McCain, Chairman, Maple Leaf Foods Inc.
  • 2000: Purdy Crawford, Chairman, AT&T Canada
  • 1999: Fairfax Financial Holdings Limited, led by Prem Watsa, Chairman
  • 1998: Paul Desmarais, Chairman, Power Corporation of Canada
  • 1997: Frank Stronach, Chairman of the Board, Magna International Inc.
  • 1996: Jean C. Monty, President and CEO, Northern Telecom Limited
  • 1995: R. Jack Lawrence, Deputy Chairman, Nesbitt Burns Inc.
  • 1994: Robert Nourse, President and CEO, The Bombay Company Inc.
  • 1993: Cedric E. Ritchie, Chairman, The Bank of Nova Scotia
  • 1992: John C. Carroll, President and CEO, Molson Breweries
  • 1991: John M. Thompson, Chairman and CEO, IBM Canada Limited

About the Ivey Business School, Western University

The Ivey Business School (www.ivey.ca) at Western University is Canada’s leading provider of relevant, innovative and comprehensive business education. Drawing on extensive research and business experience, Ivey faculty provide the best classroom experience, equipping graduates with the skills and capabilities they need to tackle the leadership challenges in today’s complex business world. Ivey offers world-renowned undergraduate and graduate degree programs as well as Executive Development at campuses in London (Ontario), Toronto and Hong Kong.


Tim Hortons & President's Choice among top 10 most influential brands in Canada: Ipsos Reid

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Ipsos Reid has unveiled the Top 10 Most Influential Brands in Canada at FFWD: Advertising & Marketing Week in Toronto. With the results based on its third-annual Most Influential Brands study, Steve Levy, CEO, Ipsos Reid, discussed the dimensions and factors surrounding why brands are influential, and explained how the following brands made it to the top 10 in 2013:

Most Influential Brands in Canada 2013
  1. Google
  2. Facebook
  3. Microsoft
  4. Apple
  5. Visa
  6. Tim Hortons
  7. YouTube
  8. President's Choice *NEW in 2013*
  9. Walmart
  10. MasterCard *NEW in 2013*
Two of the above, Tim Hortons and President's Choice, are considered to be 'Canadian'. 

“To Canadians, brands are more than just corporate logos,” said Levy. “They have meaning, personality and even attitude. When it comes to asking which brand is the most trustworthy, has the most presence or is most engaging – the answer can be a very personal one for many of us. This is because we increasingly identify with, relate to, and define ourselves by them – which gives brands something we can measure: influence.”

Levy also shared some of Canada’s brands that are “on fire” – brands that made the biggest gains in influence during 2013. They are:

Brand
McDonald's Canada
Netflix
Hudson's Bay Company
2013 
23
36
52
2012
35
72
84

The Most Influential Brand study examined key dimensions that define and determine the most influential brands in Canada, including: Leading Edge; Trustworthiness; Presence; Corporate Citizenship; and Engagement.

Interesting differences were seen in how the genders, generations and regions view brands. The Millennial generations love their new media with YouTube, Pinterest and Netflix ranking quite high among this group, while Gen Xers find The Weather Network as more influential than their Boomer or Millennial counterparts. Among iconic Canadian brands, Tim Hortons is very influential among Ontarians, while the CBC ranks particularly high among Men, Boomers and those from Quebec and the Maritimes.

The Most Influential Brands study was conducted in December 2013. The online survey of 5,008 adult residents of Canada was conducted using the Ipsos iSay Panel. The results are based on a sample where weighting was employed to balance demographics and ensure that the sample’s composition reflects that of the actual Canadian population according to Census data. The precision of Ipsos online polls is measured using a credibility interval. In this case, the results are considered accurate to within +/- 1.6 percentage points, 19 times out of 20, of what the results would have been had the entire population of adults in Canada been polled.

Source: Press Release

Saks Fifth Avenue to open 150,000 sq ft Toronto flagship within Queen St. Hudson's Bay

Saks Fifth Avenue will open its Canadian flagship store within Hudson's Bay's 851,000 square foot store at 176 Yonge Street (at Queen Street) in Toronto. The 150,000 square foot Saks store will span several levels. It is expected to open late 2015, about a year before the scheduled opening of Nordstrom a couple of blocks north at the Toronto Eaton Centre.

As part of the Saks deal, Hudson's Bay sold its Queen Street flagship (as well as an adjacent office tower) to landlord Cadillac Fairview for about $650 million. Cadillac Fairview operates the adjacent Toronto Eaton Centre. Hudson's Bay will lease back its store for the next 25 years with the option to extend the lease by nearly 50 years thereafter. Hudson's Bay and Saks (as well as the concessions contained within) will be integrated into Cadillac Fairview's Toronto Eaton Centre marketing, as they will be considered part of the mall.

Money used from the proceeds of the sale of the Hudson's Bay flagship will go towards debt payments as well as to further expand Saks into Canada.

This footpath between Toronto Eaton Centre and Hudson's Bay/Saks will be renovated as part of the deal. Image: Google Streetview 

This footpath between Toronto Eaton Centre and Hudson's Bay/Saks will be renovated as part of the deal. Image: Google Streetview 

The announcement of Saks at Yonge and Queen is surprising since we had expected that Saks' Canadian flagship would replace Hudson's Bay at Toronto's Yonge and Bloor intersection. In excess of 300,000 square feet, it would have been the world's second-largest Saks store. Cadillac Fairview reportedly convinced Bay CEO Richard Baker to abandon plans to build the Yonge & Bloor Saks flagship in favour of a Queen Street Saks. We've been told that plans for the Yonge and Bloor Bay store have been scrapped for now, and that the entire Bay store could be shuttered and subdivided as part of a redevelopment.

Hudson's Bay also recently introduced a 19,000 square foot TopShop/TopMan concession into its Queen Street store, and New York City-based Kleinfeld Bridal will open a 20,000 square foot seventh-floor location in May. Cadillac Fairview has stated that both of these will be featured prominently in Toronto Eaton Centre marketing as well.

Earlier this month, Nordstrom announced that it will occupy 213,000 square feet of Sears' Toronto Eaton Centre space. With Nordstrom anchoring the northern side of the Toronto Eaton Centre and a combined Saks/Hudson's Bay to the south, the Toronto Eaton Centre will see its image elevated substantially in a relatively short period of time. La Maison Simons could also move into some of the space vacated by Sears.

Hudson's Bay, Yonge and Queen. We expect this corner/part of the store will become Saks Fifth Avenue. Photo: Darrell Bateman

Hudson's Bay, Yonge and Queen. We expect this corner/part of the store will become Saks Fifth Avenue. Photo: Darrell Bateman

Inserting the 150,000 square foot Saks store into the Queen Street Hudson's Bay will be a challenge. A considerable portion of the Bay store has already been renovated, including portions of the store that we expect to be utilized for Saks. We suspect that Saks will be located at the eastern end of the flagship Hudson's Bay store. Recently completed renovations for a second-floor men's store may therefore have to be demolished. In addition, the future of Hudson's Bay's women's luxury department 'The Room' is in question, as it occupies over 20,000 square feet of the eastern end of the store's third floor.

Another challenge for Saks and Hudson's Bay is that a significant amount of space on the store's ground floor was recently dedicated to one of the world's largest women's shoe departments. Inserting the 150,000 square foot Saks store will require prime ground-floor retail space. Time will tell what will become of the Queen Street Bay and its recent renovations.

Richard Baker says that 'food halls' will be introduced into both its flagship Toronto Eaton Centre store as well as its Sherway Gardens store. These could be similar to food halls in European department stores such as Harrod's in London, Le Bon Marché in Paris or Ka De We in Berlin. We'll update you on this and other Saks-related details as they arise.

Source: Cadillac Fairview press release

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BREAKING: Saks Fifth Avenue to open downtown Toronto flagship and Sherway Gardens store

Photo: Skeezix, Urban Toronto [

Image Source

]

Below is a press release revealing that Saks Fifth Avenue will build a 150,000 square foot Toronto flagship, as well as a second location at Sherway Gardens. We'll update this article shortly with updated information and analysis. 

Hudson’s Bay Company (TSX:HBC) and its wholly-owned subsidiary Saks Fifth Avenue announced today plans to open a full-line Saks store in the heart of downtown Toronto at the Hudson’s Bay flagship store at the corner of Queen Street and Yonge Street. The approximately 150,000 square-foot, multi-level Saks is planned to open in the fall of 2015 and will be co-located with the current Hudson’s Bay store.

HBC has agreed to sell its downtown Toronto flagship retail complex and the Simpson’s Tower located at 401 Bay Street to an affiliate of The Cadillac Fairview Corporation Limited for a purchase price of $650 million. HBC will lease the entire retail and office complex back for a base term of 25 years with renewal options for a term just under 50 years. Proceeds of the transaction will be used to reduce the Company’s debt and invest in growth initiatives. The transactions are subject to customary conditions and are expected to close on or about February 25, 2014. As part of this transaction Saks has also agreed to lease space in Toronto’s Sherway Gardens for a full-line Saks store.

“We’re very pleased to announce this agreement with Cadillac Fairview, which clearly demonstrates the tremendous value of our dynamic real estate portfolio,” stated Richard Baker, HBC’s Governor and Chief Executive Officer. “This sale-leaseback provides HBC with resources to deleverage and accelerate investment in our growth initiatives. We continue to explore other options to create additional value through the power and potential of our real estate assets.”

“The opening of our first Saks Fifth Avenue stores at Toronto Eaton Centre and Sherway Gardens brings Canadian shoppers the full array of luxury fashion collections and exceptional service for which Saks is renowned,” continued Mr. Baker. “We especially appreciate Cadillac Fairview’s strong commitment to the Queen Street location and adjacent Toronto Eaton Centre, providing us with the opportunity to be a major part of Toronto’s premier luxury shopping destination.”

“We are excited to be the first to bring Saks to the Canadian market as part of this iconic property in the heart of downtown Toronto,” said John Sullivan, President and Chief Executive Officer, Cadillac Fairview.

“We believe there is significant and untapped opportunity for retailers such as Saks in Canada. Through this agreement with HBC we are thrilled to expand the luxury offering in downtown Toronto and at Sherway Gardens, enhancing the superior customer experience for which Toronto Eaton Centre and Sherway are renowned.”

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#1 CANADIAN RETAIL NEWS REPORTER FOR 2013: GLOBE & MAIL'S MARINA STRAUSS

Marina Strauss [Image Source]
We want to give recognition to the news reporter who wrote our favourite Canadian retail article of 2013. The Globe & Mail's Marina Srauss composed a lengthy piece on the Hudson's Bay Company CEO Richard Baker's purchase of Saks Fifth Avenue. The article was published in the November 27th Report on Business Magazine. The writing, research and content is exemplary and worthy of recognition.

Needless to say, we think the article deserves a look and we encourage you to click here to see it. For those interested in the future of Saks Fifth Avenue in Canada and how the deal came about, the article is captivating. Ms. Strauss starts by revealing that Richard Baker intends on opening the world's second-largest Saks Fifth Avenue store at Toronto's Yonge and Bloor Street intersection, replacing a current Hudson's Bay store.


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Ms. Strauss went above and beyond, travelling with Mr. Baker on his private jet to New York to learn more about the deal as well as Baker's work and family life. Details of a failed Bloomingdale's deal are provided before it is revealed that Baker really wanted to buy Saks Fifth Avenue all along.

Ms. Strauss further interviewed the 'competition' including Holt Renfrew President Mark Derbyshire. She also interviewed various suppliers and retail experts. She then provided excellent analysis of her research, outlining increased competition in Canadian luxury retail now that Saks and Nordstrom will open here. 

Thank you, Marina Strauss, for this and other excellent retail reporting over the past year. We look forward to more outstanding journalism in 2014.

[Marina Strauss on Twitter]

[Meet the man trying to shake up luxury retail in Canada: Globe & Mail Report on Business Magazine, November 27th 2013, by Marina Strauss]


TOP 10 CANADIAN RETAIL NEWS STORIES OF 2013

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Happy New Year from Retail Insider. 2013 was an busy year for Canadian retail news, and we think 2014 will be equally busy. Here is our top 10 list of Canadian retail news stories, with topics provided by readers. This article is by Retail Insider writer Adam Ramsay


1) LOBLAW PURCHASES SHOPPERS DRUG MART

One of Canada's biggest retail stories of the year involved a huge corporate takeover. On July 15th, Loblaw announced that it had acquired Shoppers Drug Mart for $12.4 billion in a cash and stock agreement. The deal was groundbreaking as the nation’s leading grocer had acquired the nation’s largest pharmacy chain. Under terms of the purchase, Shoppers Drug Mart will continue to keep its identity and will operate as a new division of Loblaw.

Loblaw also announced in the deal that Shoppers will continue to use an ‘associate owner’ system - one that helped make the chain one of the country’s top 10 most fail-proof franchises. Because of this, no store closing or rebrandings have taken place and none are anticipated. A ‘cross marketing’ of Loblaws and Shoppers signature products, services and loyalty programs has also begun and will continue to expand in 2014.



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Rana Plaza, Bangladesh [Image Source]
2) MASSIVE CASUALTIES AT COLLAPSE OF ILLEGALLY BUILT CLOTHING FACTORY IN BANGLADESH

In April, a devastating collapse of an illegally built clothing factory in Bangladesh killed 1,129 people and injured more than 2,500. The factory, Rana Plaza, was used by several well-known inexpensive fashion labels including Canadian retailer Loblaws for its Joe Fresh line. The disaster is now regarded as the world’s worst modern-day industrial tragedy.

The building collapse has led to international discussions over corporate and social responsibility across global supply chains. Advocacy groups have been working on awareness campaigns and accords meant to highlight and fix the terrible working conditions and treatment of Bangladeshi workers and many consumers have revolted against companies that not only have connections to the building which collapsed, but also to those who use Bangladesh factory sourcing in general.

In December, five global retailers who source from Bangladesh, along with other manufacturers and labour groups, created a $40 million compensation fund for victims of the Rana Plaza disaster. Those retailers include Britain's Primark, Spain's El Corte Inglés, France's Bon Marché and Canadian Loblaw.



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Target Canada [Image Source]
3) TARGET’S HIGHLY ANTICIPATED CANADIAN ARRIVAL RECEIVES LUKEWARM RECEPTION

After years of rumours, market research and anticipation, Target - the #2 department store chain in the United States - made its long awaited Canadian debut in March. The company would open up 124 locations from coast to coast in 2013 and with it promised Canadians a “distraction-free” shopping experience with products, brands and loyalty programs much akin to those found south of the border.

Reaction from consumers proved to be a disappointment for Target, as supply issues in many departments left store shelves empty in a problem that is still not fully rectified going into 2014. There was also concern amongst shoppers that the prices found in the former Zellers locations were higher than their American counterparts. In September, Target had to move quickly to correct a nasty PR issue that saw veterans forced outside of their stores to sell poppies for Remembrance Day. Target Canada President Tony Fisher has been adamant that although Canadian operations have been a drag on total company earnings so far, they are committed to growth and will "continue to show positive progress as [they] continue to go forward."



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Lululemon store, Vancouver [Image Source]
4) LULULEMON HAS TUMULTUOUS YEAR - EMBARRASSING PR MISHAPS HURT THE BRAND

Lululemon has had a year for the ages, but not the kind that they’ll necessarily want to remember. First there was the sheer yoga pants recall that began in late 2012 that cost the company $67 million in lost revenue, affecting almost a fifth of its entire inventory. In June, well-liked company CEO Christine Day, who had lead the brand for more than five years and steered the company through the above mentioned recall, announced that she was leaving.

Perhaps the most damaging PR mishap of the year came in November, when founder Chip Wilson stated in an interview that "some women’s bodies just actually don’t work" with Lululemon pants, when complaints began to grow that the pants are sheer and pill too easily. Wilson quickly came under fire for his comments, and many believe he exasperated the situation by offering an apology that didn’t retract his remarks. Early in December, he resigned from the organization that he himself created.

It’s not all doom and gloom for Lululemon, as sales continue and they enjoy some of the most productive retail space in Canada. The West Edmonton Mall Lululemon location, the company’s highest selling, brings in upwards of $26 million annually with a store of only 3,200 square feet, and that Lululemon stores enjoy average revenues of $1,936 per square foot annually.



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Calvin McDonald, Sears Canada [Image Source]
5) SEARS CANADA LOSES CEO CALVIN McDONALD, CONTINUES TO STRUGGLE

It was another rough year for Sears Canada, as in September CEO Calvin McDonald resigned as head of the company that has been struggling to both find itself and keep up with competitors in recent years.
As he moved on to head up the North American operations of Sephora - a French cosmetics chain - Sears continued to actively sell back some of its most valuable leases to landlords in an attempt to secure the much needed capital just to continue its operations.

As the company continues to divest of some of its most valuable assets, it has begun to pave the way for some major new entrants into Canada’s retail space. Upscale American department store retailers Nordstrom and Saks Fifth Avenue (purchased this year by HBC) have already announced plans to open up locations in this country. And with La Maison Simons focusing aggressively on new development outside of Quebec and the long-running rumour that Bloomingdales locations might not be far from a reality in this country, Sears is opening the door to increased competition amongst retailers to allure the type of consumer it has historically tried to attract. 2014 will prove to be a pivotal year for Sears Canada, not just for its long-term success, but for its very survival.



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[Image Source]
6) SOBEYS BUYS CANADA SAFEWAY CHAIN, INVESTS IN FUTURE GROWTH

Back in June, Sobeys invested $5.8 billion in a cash deal that saw them acquire Western Canadian grocer Safeway. The deal included hundreds of locations with in-store pharmacies, plus gas stations, liquor stores, manufacturing facilities and a handful of distribution centres and related wholesale business. The Competition Bureau approved the sale in October, but would demand that Sobeys divest of 23 stores in British Columbia, Alberta, Saskatchewan and Manitoba. The move is expected to save Empire (Sobeys parent company) more than $200 million annually in operational costs.

The Safeway acquisition wasn’t the only substantial business move for the company in 2013. In addition to teaming up with Target to supply their new 124 stores with grocery items through the Sobeys distribution network, they have also finalized the purchase of the Shell gas stations in Quebec and Atlantic Canada. There’s been the sell-off of their Theatre business (through parent company Empire) to Cineplex and even the recent opening of the first of their new 'Sobeys Extra' format stores in Burlington, Ontario. In this fall it was announced that long-time company executive Marc Poulin - who became the President of Sobeys in June 2012 - is taking over as the head with the retirement of Paul Sobey.



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[Image Source]
7) HUDSON'S BAY COMPANY BUYS SAKS FIFTH AVENUE, PLANS TO OPEN CANADIAN SAKS STORES

The summer proved to be a very busy time for North American retail business purchases, takeovers and acquisitions. That was certainly felt by American luxury retailer Saks Fifth Avenue who had seen keen interest from several potential buyers. The Hudson’s Bay Company made its $2.9 billion purchase of Saks public on July 28 by announcing that they will open 7-8 full line Saks and up to 25 'Off 5th' (discount outlet chain) locations in Canada. It was also reported that a REIT could be set up to hold Saks' real estate assets, which are valued at $1.5 billion.

In early December, it was revealed that the flagship location for Saks in Canada will be built on the corner of Yonge and Bloor Streets in Downtown Toronto, and will in fact replace a 342,000 square foot Hudson’s Bay store. Once the more than $100 million renovation is complete and the location opens its doors, it is expected to be the second largest Saks in the world, after the Manhattan store in New York. The arrival of Saks and Nordstrom north of the border, combined with the already existing presence of the likes of Holt Renfrew means that upscale department store retailing will soon to heat up in Canada.



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Screenshot, Amazon.ca website
8) AMAZON OPENS UP ONLINE STORE TO CANADIAN GROCERY SHOPPERS

For many, delivery drones may quickly come to mind when thinking about the kind of year Amazon had in 2013. But for Canadians, it’s a different story altogether, as the online retail giant announced its intentions in October to enter into the ultra-competitive Canadian grocery market.

Amazon launched the grocery and gourmet food section on its website on Halloween, offering more than 15,000 different food items including packaged beverages, breakfast foods, pantry supplies and snacks. All major brands are represented on the site, with very competitive pricing. This leaves many in the industry to believe that the already heated Canadian 'grocery war' is about to get even fiercer, and that as a result prices will be driven down. In fact, Amazon believes it already has a pricing advantage on its bricks-and-mortar competitors, citing its 'dynamic pricing' model, which analyzes massive amounts of data to adjust prices in real time on certain items when necessary.

Amazon's move has Canadian grocery retailers taking notice. Loblaws and Sobeys, for example, anticipated the increased competition earlier this year when each made substantial investments in future sustainability by taking over Shoppers Drug Mart and Safeway, respectively. With Walmart’s further expansion into the Supercentre format across the country, and Target’s 2013 foray into the ring, the Canadian grocery industry both in-store and online will no doubt remain the most competitive retail space in 2014.



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Black Friday shoppers [Image Source]
9) BLACK FRIDAY AND CYBER MONDAY SHOPPING CONTINUES TO GROW IN CANADA

Black Friday and Cyber Monday, two of the biggest shopping days on the calendar in the United States, have become a major force in Canadian retail as well. This year, more Canadians than ever before shopped in-store and online during these major sales days hoping to find outstanding discounts on products and services. Mall landlords and large national retailers have led the charge, all but forcing businesses of any scale or type to offer their very best prices and offers to compete.

Although more Canadians than ever before took part in the shopping frenzies, the numbers were still lower than anticipated earlier in the year. Part of the blame is thought to be placed on the fact that savings north of the border simply weren’t as attractive as those found in the States. As an example, many retailers offered up to 80% discounts down south, while most of the sales experienced in Canada were only in the 40-50% range, which proved to be not much better than the normal savings found in a typical sale in many stores.

The general belief is that the shopping events will continue to grow in Canada, but proper marketing is needed amongst retailers, and a 'one size fits all' approach will not necessarily work for Canadians.



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La Maison Simons, West Edmonton Mall. Photo: Darrell Bateman (darrellinyvr on Flickr, Image Source)
10) LA MAISON SIMONS NATION-WIDE EXPANSION PLANS

La Maison Simons has had another busy year of strategic planning. After opening their first location outside of Quebec in 2012 - a 118,000 square foot store in the West Edmonton Mall - plans have been unveiled that will see the chain expand further into other major Canadian cities including West Vancouver 's Park Royal Shopping Centre, Ottawa (at Rideau Centre and Les Promenades Gatineau) and at Mississauga's Square One Shopping Centre.

La Maison Simons CEO Peter Simons has also identified Winnipeg and Calgary as cities that are ‘on the radar’ of the company, which could see as many as two locations open up in Calgary. He went on to say in an interview with Retail Insider in September, that there is no preference as it relates to urban vs. suburban development, and that all future growth must be “gradual and intelligent” so that the company, which has existed for more than 175 years, can continue to exist for future generations. La Maison Simons currently operates 10 stores in Canada, all in the neighbourhood of 80-100,000 square feet. The highest-selling locations remain inside their home province of Quebec, at Place Ste Foy and Downtown Montreal, though this may change in 2014 as its West Edmonton Mall store continues to see significant sales growth.


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Feel free to submit your top choices to our comments section below. You may also post to our Facebook Page and comment to our Twitter Feed

UPDATED ANALYSIS: POTENTIAL SUBURBAN SAKS FIFTH AVENUE LOCATIONS IN CANADA

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According to the November 27th edition of the The Globe & Mail Report on Business, Saks Fifth Avenue CEO Richard Baker says that he'll open up to eight Saks Fifth Avenue stores in Canada, including suburban locations in or near Toronto, Montreal and Vancouver. Based on Baker's comments, we're providing an updated list of which suburban Canadian malls are likely to receive a new Saks store. We also have an update on potential downtown stores: they might not go into current flagship Hudson's Bay store space, after all. 

The Globe & Mail article says the following about Richard Baker:


"He’s also weighing setting up Saks in Calgary, and in suburban Toronto, Montreal and Vancouver—up to seven or eight Canadian Saks in all, he says. He’s already negotiating for space in major suburban malls such as Toronto’s Sherway Gardens and Yorkdale."


Given the above statement, we have an update on what suburban locations we think Saks Fifth Avenue could open in Canada. We'll specifically address potential suburban locations. 


The first two locations we'll discuss are the obvious ones which were mentioned in the article: Toronto's Sherway Gardens and Yorkdale Mall. The second two might be less obvious. We speculate that the Vancouver store location could be at Oakridge Shopping Centre, and that the suburban Montreal store could be at Le Carrefour Laval.


Yorkdale Shopping Centre, Toronto: Richard Baker may be negotiating for the entire 190,000 square foot Sears store location that was recently sold back to landlord Oxford Properties. The store enjoys a prime location next to an expanded flagship Harry Rosen store and is between an upscaled Hudson's Bay and a substantially expanded and modernized Holt Renfrew store. We had initially expected a Yorkdale Saks to be established within part of Hudson's Bay's 303,000 square foot store, though now it appears Richard Baker is willing to spend substantially more money on Canadian Saks stores than we had originally anticipated. 

Saks could have some competition for the Yorkdale Sears space, however. La Maison Simons has expressed interest in leasing part of the space. Furthermore, the mall's landlord has also stated that it may wish to demolish Sears in order to expand Yorkdale Mall into that space as well as the adjacent parking space. 


Nordstrom will join Yorkdale in 2016 with a new 188,000 square foot store, in part of a 298,000 square foot mall expansion. 

Sherway Gardens, Toronto: Saks could occupy part (or even all) of Sherway's 225,000 Sears store location which Sears recently sold back to landlord Cadillac Fairview. We again have changed our thoughts on where Saks could go. We were expecting Saks to open a shop-in-store within suburban Hudson's Bay stores, but after last week's article in the Globe & Mail, it appears that Richard Baker is willing to spend money to build large free-standing Saks stores. We think 225,000 square feet might be a bit too large for Saks at Sherway, however - only two American Saks locations are larger than 225,000 square feet, and both are 'urban' flagships, being the Manhattan (646,000 square feet) and Beverly Hills (275,000 square feet) stores. 

Sherway Gardens is a sufficiently upscale mall for Saks, and it features other upscale tenants including Holt Renfrew (which may stay in the mall, despite its building a 120,000 square foot store in nearby Mississauga) and, in 2016, a 138,000 square foot Nordstrom store. 

Oakridge Shopping Centre, Vancouver: Saks had already been inquiring into space at Oakridge Centre, and Oakridge's landlord is looking to fill a proposed 155,000 square foot anchor store with an upscale American department store. Though it wouldn't open until some time around the year 2020, an expanded Oakridge Centre could become home to a Saks store. 

Carrefour Laval, suburban Montreal: Given the possibility that Saks could open in suburban Montreal, our best guess for its location would be Carrefour Laval. The mall enjoys an affluent shopping base and its landlord, Cadillac Fairview, is keen to make improvements to the mall. We're not sure if Saks could take over the mall's current Sears store, or if it would want to - the mall's Sears store is a bit removed from other upscale retailers and is itself neighboured by some more mid-market stores. We're not aware of mall restrictive covenants though it's possible that a purpose-built Saks could arrive in the mall within a few years.

Besides these four suburban store locations, we expect at least three downtown Canadian Saks stores: one in Toronto (replacing Hudson's Bay at Yonge and Bloor) as well as in Vancouver and Montreal. Sources have informed us that Saks management may want to create free-standing downtown stores rather than locate within flagship Hudson's Bay stores in Downtown Vancouver and Montreal. An eighth possible Saks store could be somewhere in Calgary. 


ANALYSIS: SAKS FIFTH AVENUE'S 2nd LARGEST STORE TO REPLACE HBC AT YONGE & BLOOR

[Image Source]

On Friday we reported that Saks Fifth Avenue's Canadian flagship would be built at the corner of Yonge and Bloor Streets in Downtown Toronto, replacing a 342,000 square foot Hudson's Bay store. The new Saks reportedly be the second-largest in the world, surpassed only by its 646,000 square foot Manhattan flagship. The surrounding shopping area is expected to be elevated with the new Saks, potentially leading to luxury retailers moving or even relocating Eastward towards Saks on Toronto's Bloor Street. The approximately $100 million that HBC CEO Richard Baker is willing to spend on the store will hopefully help alleviate downfalls with the current space, including low ceilings and awkward access points.  

Saks' Manhattan flagship has exceptionally high ceilings, creating sense of drama for the store. This is unfortunately not the case for the Yonge and Bloor Hudson's Bay. It has considerably lower ceilings, having been built in the 1970's when lower ceilings were an acceptable trend. We lack knowledge on how to modify low ceilings and we welcome feedback as to if there is any way this could be remedied. The current Bay store, as well, has relatively awkward access points that involve having to take a half-flight of escalators from the street level to the main floor of the store. The store is also awkwardly accessed from the busy subway station level below, and Saks will sit directly above the intersection of the Yonge and Bloor subway lines. It will be interesting to see how the new store will be configured in light of these ceiling and access limitations.


High ceilings are a feature of the Manhattan Saks store [Image Source]

Richard Baker says Toronto's Saks will be "twice the size" of Holt Renfrew's Bloor Street flagship. The retail portion of Holt Renfrew's Bloor Street store features is somewhere in the 120,000-150,000 square foot range, as part of the store's total area of about 185,000 square feet (including storage and other uses). We base this 185,000 square foot estimation on Morguard Properties' website, noting that Holt Renfrew occupies almost 176,000 square feet with the Holt Renfrew Centre. Holt Renfrew also occupies more retail space within the adjacent 60 Bloor Street West building, including about 3,800 square feet of ground-floor space as well as a few thousand more dedicated to personal shopping suites within the office building at 60 Bloor.

Based on our rough calculations of Holt Renfrew's size, Bloor's Saks Fifth Avenue could occupy somewhere in the 240,000-300,000 square foot range and possibly more, all the way up to the 342,000 square feet of retail space currently occupied by Hudson's Bay. Regardless, the Bloor Street Saks will likely become Canada's largest luxury department store, surpassing the size of the recently announced Ogilvy/Holt Renfrew store to be created in Montreal.


Rendering of an expanded Holt Renfrew on Bloor Street West. Image: Urban Toronto

Holt Renfrew, itself, could expand its Bloor Street premises. Last year we reported that the store was to significantly expand to a size in excess of 200,000 square feet. The project is currently on hold and is expected to see modifications, and we're waiting to learn new details on the store's expansion. 

The area surrounding the new Saks will undoubtedly be elevated thanks to its new neighbour. The 'luxury zone' of Toronto's Bloor Street West has, lately, been concentrated on Bloor Street between Bay Street and Avenue Road. Holt Renfrew and Maison Birks fall outside of this boundary, both being between Bay Street and Yonge Street. With Saks' arrival east of Yonge Street, as well as new retail being constructed at neighbouring 1 Bloor Street East, we could see more luxury retailers moving eastward towards Saks.


Rendering of retail at 1 Bloor Street East. Photo: Urban Toronto

Lack of retail space on Bloor Street has been a contributing factor to the lack of luxury retail in Toronto in comparison to similar-sized cities like Chicago. Chicago's Michigan Avenue, Oak Street and surrounding streets have seen a continuous influx of luxury retail that arguably surpasses that of Toronto. Sources tell us that one of the challenges brokers are having placing luxury tenants in the Yorkville area is the lack of potential flagship retail space, and that could change as the desirability of Bloor Street's eastern portion is heightened by the new flagship Saks. 

Next week we'll discuss where some of Saks Fifth Avenue's other Canadian stores could open, in light of this now well-read Globe & Mail article written by Marina Strauss last week. 


RELATED: 


SAKS FIFTH AVENUE TO BUILD MASSIVE TORONTO FLAGSHIP

[

Image Source

]

*****UPDATE:

Here is the link

to our analysis of this story*****

Reportedly, 

Saks Fifth Avenue will build its Canadian flagship

store at 44 Bloor Street West in Toronto, replacing a 342,000 square foot

Hudson's Bay

store. The store could cost as much as $100 million to build. It will apparently be the second-largest Saks Fifth Avenue store in the world, following its massive Manhattan flagship.

We speculate that the new Toronto Saks Fifth Avenue store will be roughly 300,000 square feet, making it the third-largest luxury department store retailer in North America (following Saks Fifth Avenue's 646,000 square foot Manhattan flagship and

Bergdorf Goodman

's 316,000 square foot Manhattan store). Time will tell if Toronto's Saks will be even larger than Bergdorf's. 

On Friday and over the weekend, we'll be researching and analysing Saks Fifth Avenue's Canadian retail strategy, in light of new information received. On Monday, we'll publish a more lengthy analysis of Toronto's new Saks Fifth Avenue and how it will affect neighbouring retail in its immediate area

(UPDATE:

Click here for our analysis

)

. We'll also discuss the future of Saks Fifth Avenue stores in Canada, as

Hudson's Bay Company

CEO Richard Baker says

he'll open as many as eight

Canadian Saks Fifth Avenue stores, including several suburban locations.

We hope everyone stays safe this Black Friday, and we'll be back Monday with articles about Saks Fifth Avenue's plans for Canada.

RELATED: 

[

Source: Globe & Mail Report on Business

]

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SAKS INCORPORATED SHAREHOLDERS APPROVE MERGER WITH HUDSON'S BAY COMPANY; CLOSING PLANNED FOR NOVEMBER 4, 2013

[Image Source]

This is good news for those anticipating the completion of Saks Fifth Avenue's purchase by the Hudson's Bay Company. Saks shareholders have approved the merger, and the deal is scheduled to close next Monday.  

The following is the full press release regarding the Saks sale: 


BusinessWire · Oct. 30, 2013 | Last Updated: Oct. 30, 2013 4:06 PM ET
Hudson’s Bay Company (TSX:HBC) (“HBC” or the “Company”) announced that the merger of Saks Incorporated with HBC was approved at a special meeting of Saks Incorporated shareholders held earlier today. Accordingly, HBC plans to complete the merger on November 4, 2013.
The merger will create a premier North American fashion retail business centered on three iconic retail brands – Hudson’s Bay, Lord & Taylor and Saks Fifth Avenue. The combined Company will operate a total of 320 stores, including 179 full-line department stores, 72 outlet stores and 69 home stores in prime retail locations throughout the U.S. and Canada, along with three e-commerce sites. The combined Company would have generated pro forma sales and normalized EBITDA in fiscal 2012 of approximately C$7.2 billion and C$587 million, respectively, before any synergies.
“With the addition of Saks Fifth Avenue, we will begin an exciting new era for HBC,” said Richard Baker, HBC’s Governor and CEO. “By uniting Saks, Hudson’s Bay and Lord & Taylor, we are creating a platform built upon three brands with a rich heritage in retailing. We will be well positioned to serve customers across a range of shopping experiences, including the luxury, mid-tier and outlet categories. We plan to invest in the growth potential of each brand and category. And, we will unlock the tremendous potential of the Company’s world-class real estate assets. As we pursue our strategic growth plans, we look forward to driving increasing value for HBC shareholders.”
Growth Opportunities for Saks Fifth Avenue
HBC has stated that it plans to expand the Saks’ banner to Canada, opening as many as seven full-line Saks Fifth Avenue stores and up to 25 OFF 5TH outlet locations over the next several years. The Company intends to expand Saks’ e-commerce presence in Canada by establishing a Canadian saks.com website. HBC will also continue Saks’ existing plans to further expand the OFF 5TH footprint in the U.S.
As previously announced, HBC expects the merged enterprise to achieve C$100 million of annual synergies within three years through a combination of shared services, operational efficiencies and implementing best practices across banners.
Experienced Retailing Leadership
HBC also announced key executive leadership roles at the corporate and business unit levels. As previously reported, Marigay McKee will become President of Saks Fifth Avenue, effective January 6, 2014, and Liz Rodbell will become President of the HBC Department Store Group (Hudson’s Bay and Lord & Taylor), effective February 1. Both will report to HBC’s Office of the Chairman, which consists of Richard Baker, Governor and CEO, and Don Watros, Chief Operating Officer of HBC.
Saks Fifth Avenue will remain a separate operating unit under the HBC umbrella, maintaining its own merchandising, marketing and store operations teams. Saks’ operations will continue to be headquartered at its existing New York City offices. Additionally, key members of Saks' senior merchant and store-level leadership teams will remain in place following the merger. The Company also noted that key members of its corporate leadership team, including Chief Operating Officer, Don Watros, and Chief Administrative Officer, Marc Metrick, held senior management positions at Saks prior to joining HBC.
In addition, HBC announced a number of key members of its Corporate Shared Services group, which was created to provide an effective platform for the operation and growth of the Company and its retail brands. The Shared Services group, which reports to the Office of the Chairman, includes: Marc Metrick, Chief Administrative Officer; Mike Culhane, Chief Financial Officer; David Pickwoad, General Counsel; Brian Pall, President-Real Estate; and Kerry Mader, EVP-Store Planning, Design & Construction.
About Hudson’s Bay Company
Hudson's Bay Company (HBC), founded in 1670, is North America's longest continually operated company. In Canada, HBC operates Hudson's Bay, Canada's largest department store with 90 locations, unsurpassed in its fashion, beauty, home and accessory designers and brands, as well as thebay.com. HBC also operates Home Outfitters, Canada's largest home specialty superstore with 69 locations across the country. In the United States, HBC operates Lord & Taylor, a department store with 49 full-line store locations throughout the northeastern United States and in two major cities in the Midwest, and lordandtaylor.com. With approximately 29,000 Associates in Canada and the U.S., Hudson's Bay Company banners provide stylish, quality merchandise at great value, with a dedicated focus on service excellence. Hudson's Bay Company trades on the Toronto Stock Exchange under the symbol "HBC".
Forward-Looking Statements
There can be no assurance that the transaction will close or that an equity or debt offering will be undertaken or completed in whole or in part or the timing of any such transaction. No securities will be offered or sold in the United States or to U.S. persons absent registration under the U.S. Securities Act of 1933 or the availability of an applicable exemption from such registration. This press release does not constitute a solicitation of an offer to purchase, or an offer to sell, securities in the United States or elsewhere. Closing of the transaction is not conditional on the completion of any of the foregoing.
Information in this press release that is not current or historical factual information may constitute forward-looking information, including future-oriented financial information and financial outlooks, within the meaning of securities laws, related to the timing and completion of the Saks acquisition (including the financing thereof) and the anticipated benefits of such acquisition, including the timing and value of anticipated synergies, revenue growth potential, unlocking real estate portfolio and reducing HBC’s quarterly dividend. This information is based on certain assumptions regarding expected growth, results of operations, performance, and business prospects and opportunities. While the Company considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Forward-looking information is subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what the Company currently expects. These risks, uncertainties and other factors include, but are not limited to: credit, market, currency, operational, liquidity and funding risks, including changes in economic conditions, interest rates or tax rates, the timing and market acceptance of future products, competition in the Company's markets, the growth of certain business categories and market segments and the willingness of customers to shop at the Company's stores, the Company's margins and sales and those of the Company's competitors, the Company's reliance on customers, risks and uncertainties relating to information management, technology, supply chain, product safety, changes in law, regulations, competition, seasonality, commodity price and business disruption, the Company's relationships with suppliers and manufacturers, changes to existing accounting pronouncements, the ability of the Company to successfully implement its strategic initiatives, changes in consumer spending, managing our portfolio of brands and our merchandising mix, seasonal weather patterns, economic, social, and political instability in jurisdictions where suppliers are located, increased shipping costs, potential transportation delays and interruptions, the risk of damage to the reputation of brands promoted by the Company and the cost of store network expansion and retrofits, compliance costs associated with environmental laws and regulations, fluctuations in currency and exchange rates, commodity prices, the Company's ability to maintain good relations with its employees, changes in the law or regulations regarding the environment or other environmental liabilities, the Company's capital structure, funding strategy, cost management programs and share price, the Company's ability to integrate acquisitions and the Company's ability to protect its intellectual property.
For more information on these risks, uncertainties and other factors the reader should refer to the Company's filings with the securities regulatory authorities, including the Company's annual information form dated April 30, 2013, which is available on SEDAR at www.sedar.com. To the extent any forward- looking information in this press release constitutes future-oriented financial information or financial outlooks, within the meaning of securities laws, such information is being provided to demonstrate the potential of the Company and readers are cautioned that this information may not be appropriate for any other purpose. Future-oriented financial information and financial outlooks, as with forward-looking information generally, are based on assumptions and subject to risks, uncertainties and other factors. Actual results may differ materially from what the Company currently expects. Other than as required under securities laws, the Company does not undertake to update any forward-looking information at any particular time. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. All forward-looking information contained in this press release is expressly qualified in its entirety by this cautionary statement.
E-HBC1670
Contacts
Hudson’s Bay Company
Investors
Lucas Evans, (416) 861-4444
Senior Vice President and Treasurer
investorrelations@hbc.com

or
Media
United States
Lividini & Co.
Andrew Blecher, (212) 252-7504
Andrew@lividini.com

or
Canada
Freda Colbourne, (416) 560-9974
colbournef@gmail.com

[Source]

SAKS REACHES AGREEMENT WITH INVESTORS ON HUDSON'S BAY PURCHASE

[Image Source]

Saks Fifth Avenue (Saks Inc.) said it reached an agreement to settle lawsuits by investors seeking to block the retailer’s $2.4 billion acquisition by Canadian department-store chain Hudson’s Bay Co.


The agreement decreases the potential termination fee from Saks to Hudson’s Bay if the deal fails, and shortens the period in which the Canadian company can match any alternative offer, Saks said today in a regulatory filing. The agreement will pave the way for the dismissal of the lawsuits, the company said.

Hudson’s Bay agreed in July to pay $16 a share in cash, a 30 percent premium to New York-based Saks’ closing price on May 20, the day before reports emerged that Saks was exploring alternatives. Investors including Thomas Jennings and Samuel Cohen filed suits against Saks, its directors and Hudson’s Bay. Jennings had said the proposed deal undervalued Saks.

The transaction would bring together the Hudson’s Bay, Lord & Taylor and Saks Fifth Avenue brands, creating a company with more than 300 stores and revenue of about $7 billion.

Reporter on this story: David Risser. Editor responsible for this story: Paul Jarvis. Source: Bloomberg



HUDSON'S BAY LAUNCHES NEW WOMEN'S CLOTHING LINE CALLED '424 FIFTH'

424 Fifth Avenue, the address of HBC-owned Lord & Taylor's flagship store in Manhattan [Image Source]

The Hudson's Bay Company has launched a new women's sportswear line called 424 Fifth. It will be carried in all Hudson's Bay stores, as well as American Lord & Taylor stores. It launches next January and will be 424 Fifth's first spring collection.

Some Hudson's Bay locations will carry the collection in dedicated shops-in-store, including the collection's ready-to-wear as well as accessories.

The collection is named after the address of the flagship Lord & Taylor store at 424 Fifth Avenue in Manhattan.

The Hudson's Bay Company is looking to expand its private-label business. Private-labels account for about 9% of HBC sales and according to Womens Wear Daily, HBC wants to grow it to about 15% of sales within 3-5 years.

According to a press release, the collection will include pieces in the $29-300 range. For more details on the collection, click here for the press release. 

[Source: Press Release]

[Hudson's Bay website]

SAKS FIFTH AVENUE TO OPEN IN QUEBEC: BONNIE BROOKS

[Image Source]
Bonnie Brooks, formerly president of Hudson's Bay stores, confirms that Saks Fifth Avenue will open at least one store in the province of Quebec. As we mentioned previously, we expect Saks will open within the Downtown Montreal Hudson's Bay department store.

Ms. Brooks then went on to say that Quebec's "fashion-forward shoppers" would embrace Saks Fifth Avenue over lesser-known Nordstrom. Nordstrom opens its first Canadian store next year, and it is interesting to note that none are currently planned for the province of Quebec.

Saks will be seeking to gain sales from Montreal's limited luxury goods market. Montreal already has two upscale department stores under the same owner - Ogilvy and Holt Renfrew. La Maison Simons' Montreal store includes some expensive designer items, and specialty retailers like Harry Rosen, Ursula B. and shoe retailer Rosenstein Paris will also feel the impact of Saks in Quebec.

Ms. Brooks gave these details during her September 23rd speech at The Canadian Club in Montreal.

[Source]

[Saks Fifth Avenue website]

HBC-OWNED SAKS FIFTH AVENUE TO OPEN STORES IN ASIA AND EUROPE

Saks Fifth Avenue, Polanco, Mexico [Image Source]

The Hudson's Bay Company's vice-chair Bonnie Brooks has announced that Saks Fifth Avenue will expand into Asia and Europe. The idea is lofty, and potentially dangerous for the retailer. If they can pull it off, however, Saks could become one of the world's greatest global retailers.

Ms. Brooks says that she thinks Asia will be a growth market for Saks. She is no stranger to Asian luxury retailing: Before returning to Canada to modernize Hudson's Bay, Ms. Brooks ran Hong Kong-based Lane Crawford, now one of the world's most prestigious department stores.

Saks Fifth Avenue has built many stores in the United States, only to subsequently close them due to low sales. The company has considerable debts. Overseas shoppers may not be as receptive to a foreign department store. Saks already has, however, several international stores in the Middle East and Mexico, as well as a licensed 91,000 square foot store in Kazakhstan which opened last year. If it continues to expand, we don't know if Saks would continue to license its name (as it has internationally) or take over control of its new and existing international stores.

Alternatively, if Saks can make it in Asia, it could become one of the world's great international retailers. Given the limited growth of the American economy, international expansion might be a way to increase Saks' revenues while avoiding home-based competition by retailers such as Neiman Marcus.

Ms. Brooks also mentioned the opening of Saks stores in Europe. One problem we see is Saks trying to secure 75,000-150,000+ square foot store spaces in cities with older, typically smaller buildings. One alternative would be for Saks to open in the suburbs of some larger European cities, though being regarded as a suburban store might harm Saks' reputation on a continent where luxury shopping is still mostly confined to urban high streets. 

Ms. Brooks discussed some of these details during her September 23rd speech at The Canadian Club in Montreal.

[Source]

[Saks Fifth Avenue website]