TORONTO — The team at Holt Renfrew has a tough mission — fixing a company that isn't broken.
Nevertheless, Canada's luxury chain is "rebranding," with new corporate colors and packaging, some category launches to fill merchandise voids and deeper designer commitments, as its executives hone the business for sales growth.
To further refine its image, the retailer, after being partial to glitzy blowout parties, is toning down with smaller, more frequent special events targeting specific audiences and designer appearances.
Holt Renfrew is a retailer without a lot of low-hanging fruit, virtually no competition in its markets except for a few freestanding designer shops and, overall, is performing well. It's been tracking 10 percent gains for at least the past two years, bringing volume, in U.S. dollars, to around $375 million for 2004. Revenues are expected to crack $400 million this year.
Executives said last year was the chain's most profitable, although they won't disclose figures because the business is privately held. Sources said profitability has been in the 8 percent to 9 percent EBIT range in recent years, comparable to Neiman Marcus.
"This isn't a turnaround. Holt Renfrew requires a hand with a little more finesse," said Caryn Lerner, president of the chain for the past year, during an interview at the flagship here. "It's very healthy fiscally. But we have big opportunities that can dramatically grow the top line.
"Our goal is to continue to increase sales between 10 and 15 percent for the next two to three years, and to see our EBIT increase proportionally to our top-line expectations. It's fairly aggressive."
Considering the nine-unit Holt Renfrew has already tapped all the affluent markets in Canada, opening additional stores is not on the agenda. But a number of initiatives to generate higher productivity at existing units are being taken, among them:
Bringing children's wear back after a 20-year absence, but in an upscale way showcasing designer labels.
Phasing out the Brown Shoe leased operation to give Holt Renfrew ownership of its shoe business and potential to expand it. Lerner said a wide range of prices and styles will be maintained.
Tightening relations and building assortments with designer and contemporary brands. Among those on the roster are Burberry, Canali, Chanel, Donna Karan, Giorgio Armani and Gucci.
Cultivating customers by increasing personal shoppers to 26 by the end of next year across the chain, from 17, and adding new personal shopping suites at the Toronto flagship next year.
The rebranding entails updating the look of the logo, packaging, shopping bags, signs and employee pins and shifting the company color to magenta, which is balanced by gray stripes on the packaging, stationery and other marketing materials. It has been cream and black for the last 30 years.
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