Big U.S. department stores moving into Canada, but is the demand there?
Canadian shoppers will soon have more to choose from in the luxury retail department.
On Feb. 18, big-name retailer Saks Fifth Avenue will make its Canadian debut in Toronto. Two more Nordstroms are supposed to set up shop in the city this fall (Sept. 16 at Toronto’s Eaton Centre and Oct. 21 at Yorkdale Centre).
Canada’s popular Quebec-based fashion chain, Simons, is also expanding in the east after seeing success in Edmonton. New stores are expected in Mississauga (mid-March) and Ottawa (this summer). A Calgary location and second one in Edmonton are also planned for 2017. It should be in Toronto proper by 2019, according to Retail Insider.
“There is sort of an epidemic of them, and I use that term quite precisely,” Ed Strapagiel said of the higher-end retailers.
The Toronto-based independent retail consultant admits it’s a little strange, though, for the retailers to be expanding into the market at a time of economic downturn.
So what’s behind the sudden Canadian conquest? Well, there are a couple theories.
“The simple truth is that the retail economy in the U.S. remains relatively stagnant,” said Doug Stephens, who runs the Retail Prophet.
“The auto sector is one of the few exceptions. But for apparel and other consumer products, growth has been anemic at best. This has got many retailers looking to Canada as an expansion target.”
And “the retailers tend to be a bit like sheep,” Strapagiel added with a laugh.
“They go where the competition is.”
He believes that’s what’s behind Simons’ plans for expansion. He thinks the Canadian retailer has been wanting to expand for decades but just never got around to it.
“And now they’re kind of under the gun because of Saks and Nordstrom.”
“One advantage Simons has is they probably have a far better feel of the Canadian market.”
The store offers an extensive range of apparel from moderately-priced separates to higher-end offerings from a stable of homegrown and international designers. It also has sub-departments spanning the spectrum of sartorial tastes, catering to the youthful and style-forward demographic, the young professional urbanite, as well as the “classic, elegant” shopper. Menswear offerings include chic eveningwear and trendy streetwear.
Accessories, leisurewear and a vast array of home products are carried, as well.
“We’re unique,” CEO Peter Simons explained in 2014. “I don’t do cosmetics. I don’t do hard goods and washers and dryers. I’m not a department store. I’m a large-scale specialty retailer.”
WATCH: The family-owned Simons chain continued its western expansion, by opening up a Vancouver store
Saks and Nordstrom would be wise to learn from Target’s short-lived stay in Canada, according to the retail experts.
It was about this time last year that the chain announced it was going to pull the plug on all 133 of its stores north of the border.
READ MORE: Here’s why Target failed in Canada
Strapagiel’s advice: “Don’t bite off more than you can chew.”
So far, they seem to be doing it right, he said, by putting up one store at a time to test the waters and learn what people’s tastes are.
WATCH: Saks hopes to fill a “void” in the Canadian market
“Whether there’s enough demand for all three is a tight call.”
Only time will tell.Follow @TrishKozicka
With files from The Canadian Press
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