Hugo Boss to open at Richmond Centre in suburban Vancouver

Photo by 'Seb'
A 3,000 Square foot Hugo Boss store will open soon at Richmond Centre in Richmond BC, just south of Vancouver. The store is expected to carry menswear only, though we've been told by Hugo Boss management that the product selection could be amended to include some womenswear.

The store will be operated by Hugo Boss Canada. 





The mall's landlord, Cadillac Fairview, has recently added other upscale retailers including Kiehl'sMichael Kors and Thomas Sabo. TopShop/TopMan has secured almost 15,000 square feet of space adjacent to the mall's Hudson's Bay and it is expected to open in the spring.

RELATED:


[Richmond Centre website]


[Hugo Boss website]

ANALYSIS: SEARS CANADA SELLS 5 STORE LEASES, INCLUDING TORONTO FLAGSHIP

Photo: Google Streetview screenshot

Sears Canada

has sold five more of its store leases to mall landlords for about $400 million. This creates an opportunity to redevelop these spaces as well as possibly pave the way for more Canadian 

Nordstrom

,

Saks Fifth Avenue

,

La Maison Simons

and even

Bloomingdale's

stores. 

Sears has sold its store leases back to its mall landlords in the following locations: 

  • Toronto:The Toronto Eaton Centre
  • Toronto:Sherway Gardens Shopping Centre
  • Markham, Ontario:Markville Shopping Centre
  • London, Ontario:Masonville Place
  • Richmond, BC:Richmond Centre

All of these malls are owned and operated by landlord

Cadillac Fairview

except for Richmond Centre, which is co-owned by Cadillac Fairview and

Ivanhoe Cambridge

The following is our analysis of what could replace these Sears Canada locations: 

Toronto:

 Toronto Eaton Centre

The 816,000 square foot crown jewel of Sears Canada's real estate offers plenty of options for redevelopment. We think that

Nordstrom

is a frontrunner to replace a majority of the vacated Sears space

, and 

that it would occupy 225,000-275,000 square feet. 

Other possible department store anchors include

La Maison Simons

(which would occupy about 100,000-130,000 square feet) and Bloomingdale's, 

which continues to show interest

in the Canadian market. Saks Fifth Avenue is a further possibility, though we believe Downtown Toronto's Saks

will replace the current Hudson's Bay store at the corner of Yonge and Bloor Streets

, closer to the luxury shopping area of

Yorkville

and its anchor,

Holt

Renfrew

.

Some of Sears' current Toronto Eaton Centre space could also be subdivided for use by multiple retailers. We'll elaborate soon in an article devoted specifically to Sears' Toronto Eaton Centre real estate. 

The top four floors of the store will remain Sears Canada's corporate headquarters, at least in the shorter term. Sources tell us that Sears Canada will continue to utilize its $1/square foot/year lease for this office space (which would have expired in the year 2077), making it far less costly than other available office space. 

Sears will be vacating the lower retail portion of this location by February 28th, 2014. 

Toronto:

 Sherway Gardens Shopping Centre

There are plenty of options to reuse the 225,665 square foot Sherway Sears space. The store could even be demolished for redevelopment, to be replaced by multiple smaller stores and one or more anchor stores. Sherway attracts affluent shoppers and the mall could see

Saks Fifth Avenue

 occupy part of the current Sears space, though Saks would likely not occupy more than about 130,000 square feet. 

Sherway Gardens is one of Canada's most productive malls, enjoying per-square-foot sales of almost $900/year according to its landlord. Hudson's Bay anchors the opposite end of the mall from Sears. Other anchors include 

Holt Renfrew (which is possibly staying at Sherway and expanding

) and, in 2016, 

Nordstrom which will open one of two

 Toronto locations.

Sears will be vacating its Sherway location by February 28th, 2014.

Markham, Ontario:

 Markville Shopping Centre

Markville's Sears store is 130,626 square feet according to its landlord, and we think the store space has limited potential for an upscale replacement anchor store. The mall already features Hudson's Bay and Walmart as its anchors, and the entire mall spans close to a million square feet. Sales per square foot at Markville are only about $490/square foot/year according to the mall's landlord. 

La Maison Simons could replace part of Sears' space. The space could also be subdivided for multiple smaller anchors and other stores. We doubt that, given the mall's demographics and sales, Nordstrom, Bloomingdale's or Saks Fifth Avenue will replace Markville's Sears any time soon. 

Sears will be vacating Markville by February, 2015.

London, Ontario:

 Masonville Place

This 127,205 square foot Sears store is in London, Ontario's most productive shopping centre. The mall, in fact, boasts sales of about $770/square foot according to its landlord. Other anchors include a relatively small Hudson's Bay store (at about 85,000 square feet) as well as a 91,200 square foot Target store. 

One could speculate that Sears' space could be replaced by Nordstrom, as the city and store arguably share some of the same characteristics. London is a conservative but relatively well-to-do city whose population could possibly support a Nordstrom. Nordstrom, itself, has been described as being both conservative and upscale. We doubt London would have the quantity of luxury-oriented shoppers to support Saks Fifth Avenue, and we don't expect La Maison Simons to target London in the next several years. 

Sears will be vacating this space by February 28th, 2014.

Richmond, BC:

 Richmond Centre

This 122,000 square foot Sears store could be reconfigured into multiple-tenant retail or be occupied by the likes of Nordstrom or La Maison Simons. Richmond has considerable household wealth, despite income statistics that might indicate otherwise. The mall enjoys sales of about $700/square foot, but may require renovations to entice any new upscale anchors.

Sears will be vacating this space by February, 2015.

Further Details on Sears Leases

In the past 14 months, Sears Canada has sold off several of its leases to mall landlords. In the summer of 2012, Sears sold its leases in Vancouver, Calgary and Ottawa, 

paving the way for Nordstrom's first Canadian stores

. Sears subsequently 

sold two leases in the Toronto area

, resulting in 

speculation that La Maison Simons may move in

. Sears also announced 

a $1-billion project to redevelop its Burnaby, BC real estate

 at Metrotown.

Sears is making a large profit from selling its leases. Its

first lease sale

in the summer of 2012 generated about $170 million. The

subsequent sale of two Toronto-area leases

gained the company over $190 million, and a

possible $53 million

for Sears' Scarborough Town Centre lease could further be realized. This is easy money for Sears, and it leads us to anticipate that more Sears Canada leases will be sold in the coming months.

[

Sears Canada website

]

Nordstrom Continues Canadian Location Search For Six-to-Nine Stores

Nordstrom is working with Cadillac Fairview to secure a total of between six and nine Canadian locations. As we previously reported, Nordstrom will open four Canadian stores in conjunction with Cadillac Fairview in Vancouver, Calgary, Ottawa and Toronto. A second-wave of searching and negotiating for further Canadian Nordstroms is now underway.

Cadillac Fairview has several top-performing Canadian malls and importantly, many include Sears stores. Nordstrom has the opportunity to open several more Canadian stores via Sears' leases. We'll give a quick rundown of some potential locations...

1) Fairview Mall in Toronto: Cadillac Fairview's Fairview Mall in Toronto includes a 149,552 sq ft Sears store. The mall is one of the most productive in Canada with a sales of $829/sq ft (as of September 27 2012), and Sears is well-positioned as per the floorplan below:
Fairview Mall Floorplan: Cadillac Fairview
A Fairview Mall Nordstrom could coincide with a mall expansion to make it more competitive with Yorkdale Shopping Centre.

2) Toronto Eaton Centre: Sears Canada currently occupies over 800,000 sq ft of space at The Toronto Eaton Centre. Nordstrom would like somewhere between 225,000 sq ft and 270,000 sq ft of retail in this space. If the deal goes through, some Sears space may be converted to Nordstrom's Canadian headquarters, or office space may be leased in an adjacent office tower.

3) Polo Park Shopping Centre in Winnipeg: This mall achieves sales of $753/sq ft and has a 263,243 sq ft Sears store. If converted to Nordstrom, some space would become multi-tenant retail while the rest would be Nordstrom (about 130-160,000 sq ft). Floorplan:
Polo Park Shopping Centre: Cadillac Fairview
4) Richmond Centre, Richmond BC: This suburban Vancouver shopping centre has seen numerous popular retailers introduced, with considerable success. The mall includes a 122,021 sq ft Sears location that could be converted to Nordstrom. Floorplan: 

Richmond Centre: Cadillac Fairview
Several non-Cadillac-Fairview mall locations are also being considered by Nordstrom, including:

-Metrotown Centre in surburban Vancouver, BC (in either a current Sears location or a new-build)
-Southgate Shopping Centre in Edmonton, AB (possibly in a current Sears location)
-West Edmonton Mall in Edmonton, AB (possibly in a current Sears location or a new-build)
-Yorkdale Shopping Centre (possibly in a current Sears location or part of another proposed mall expansion)

As always, we'll keep you updated. Nordstrom is also seeking locations for its discount retail format, Nordstrom Rack.

Nordstrom website: www.nordstrom.com

Cadillac Fairview website: www.cadillacfairview.com


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