The new Holt Renfrew Men store on Bloor Street West is a retail jewel.
The front window showcases a red Ferrari 458 Italia and yes it’s for sale, to the first person with $335,000 to spare.
The flooring on the ground level is made of Canadian limestone, hand cut in Toronto and laid down in a mosaic pattern. A bronze sculpture by Canadian artist Dennis Lin overlooks the shoe department.
Walter Beauchamp Tailors – the third generation of the family to tailor garments for Toronto’s elite (including royal wedding parties) – work in a glass-walled room on the second floor and they are the first thing travellers see if they exit the Bay subway station on Bellair St. in Yorkville and look up.
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Not that customers of Holt Renfrew Men need to take the subway. A team of valets is on hand at all times to ensure trifling issues like where to park the ride are taken care of.
“It’s all about the experience,” says Mark Derbyshire, president of Holt Renfrew.
Holt Renfrew is in the midst of a $300-million five-year growth plan which will see the luxury retailer expand the store network by nearly 40 per cent.
It is taking aim at the high end of the luxury market, building unique stores in major markets just as Nordstrom launches its first Canadian department stores, having opened in the Chinook Centre in Calgary on Sept. 19.
Holt Renfrew isn’t the only retailer in expansion mode. Like the city itself, malls in Toronto and the suburbs are under construction, expansion and renovation, with owners spending billions of dollars to upgrade and better compete.
By the end of 2017, the retail landscape in Toronto will look profoundly different than it did in 2011, when discount retailer Target Corp. announced it was coming.
By the time all the projects are completed, Toronto will have undergone a retail renaissance, with more and different stores offering a better shopping experience and in some cases, surprising innovations.
While there have been many recent entries into the lower end of the market – think Target and Marshalls – the next wave of retailers will include more higher-end stores.
Saks Fifth Avenue and Nordstrom will be competing with Canadian retailers Harry Rosen, Holt Renfrew and Sporting Life, all of which are expanding and renovating their networks.
The next wave will also include smaller European merchants, like Agent Provocateur, the luxury lingerie shop that recently opened on Bloor St. W.
“The renaissance is, how do I take my mall and make it better? The word you hear a lot is ‘aspirational,’” said John Crombie, senior managing director, national retail services, for the brokerage Cushman and Wakefield.
U.S. retailers began looking to Canada during the Great Recession as a potentially lucrative new market because the economy didn’t suffer as badly as the U.S. economy — the epicentre of a breakdown driven by high-risk mortgage loans repackaged as safe investment vehicles.
U.S. retailers have become wary since Target stumbled last year, losing more than $1-billion (U.S.) Still, European and Asian retailers, including Japan’s Uniqlo, remain interested, Crombie said.
Besides, per capita, Canada has less than 50 per cent of the retail square footage of the U.S., said Wayne Barwise, executive vice-president, development, The Cadillac Fairview Corp. Ltd.
Cadillac Fairview is one of North America’s largest owners, operators and developers of commercial real estate, including Sherway Gardens and Toronto Eaton Centre.
Canadian malls that are doing well are doing extremely well. Sales at Toronto Eaton Centre and its closest competitor, Yorkdale, are $1,300 per square foot, according to an industry insider.
Even malls that have recently updated are renovating again. The Eaton Centre renovated the common areas of the mall and recently undertook more renovations to add a Nordstrom at the north end and a Saks Fifth Avenue in the Hudson’s Bay at the south end.
Cadillac Fairview is spending $2.4-billion on retail redevelopment from Moncton to Vancouver, said Barwise.
More than $500-million is being invested in Sherway Gardens, adding 210,000 square feet, plus a Saks Fifth Avenue in 2016 and a Nordstrom in 2017. Harry Rosen is set to expand in the space and a Sporting Life will open in the mall.
“We’re in a more global economy right now. People are travelling more, people are aware of new merchandise from around the world, from Europe and the U.S. and there is a strong demand for that in Canada,” said Barwise.
He said the fact that Cadillac Fairview has been able to take eight store leases back from a shrinking Sears Canada is a factor.
“Prior to that our malls were full and there was no room to accommodate Nordstrom or Saks,” he said.
He agrees there is a retail renaissance going on in the GTA.
Department stores are investing in higher quality fixtures and displays, and are focusing on providing customers with better service.
“Partly this has to do with the fact that people have a choice to shop online. If they’re going to get in their car and make the trip to the mall, it has to be a heightened experience,” said Barwise.
And what happens to profits when stores start pouring money into décor and service?
“Is there enough of a market in Canada? We believe there is, and that is why we are investing so heavily in it,” said Barwise, pointing out that with the condo towers going up downtown, there is reason to be bullish on Toronto Eaton Centre’s future.
Oxford Properties Group mall is also focused on renovations and upgrades, both to major properties including Square One in Mississauga and regional and local malls.
Hillcrest Mall is about to undergo a complete transformation, said general manager Brian Marentette.
The population of Richmond Hill has more than doubled in 20 years and continues to grow at a faster rate than Toronto and Ontario.
The Zellers has been replaced by a Target. The Bay has been expanded by 50,000 square feet. Sporting Life has signed on for the fall of 2016.
“With everyone else around us already doing major expansions or development, we kind of had to reinvent ourselves and grow,” said Marentette.
The mall also received a holiday exemption, and will close only on Christmas day and Easter Sunday.
Erin Mills Town Centre in Mississauga is undergoing a $100-million renovation, the first major update since it opened in 1989.
“The centre has basically been neglected for so many years,” said general manager MacDonald.
“All the others in the area had renovations and expansions but this centre was left behind.”
Condos are being planned for across the street and there is still a lot of vacant land in the area that is ripe for development, meaning more customers.
The clock tower will be replaced by a glass sphere, 283 feet in circumference.
“We’re no longer in the clock- tower era. We spent a lot of research and time, close to two years, finding out what people in our market want – they want a fresh, new vibrant look, different retailers, but they didn’t want it to grow,” said MacDonald.
Date: October 09, 2014