By  on October 19, 2009

The Bay, Canada’s big lumbering department store, is showing some agility.

The $2.4 billion, 93-unit chain this year dropped 800 of its 1,200 brands; introduced 151 others to fill a more elevated modern niche and appear less moderate, and on Thursday relaunched its designer floor, called The Room, at the Toronto flagship.

“We have been on a massive editing process for the last eight months,” Bonnie Brooks, The Bay’s president and chief executive officer, told WWD. “Maximizing the productivity out of the space — that’s the whole game.”

Aside from striving to be more important to fewer brands and bringing clarity to the selling floors, Brooks said The Bay has been achieving back-of-house efficiencies and eliminated 400 jobs to save money, and has been carefully examining market opportunities with the help of consulting firms such as Deloitte Touche and Bain & Co.

“We changed our marketing strategies with the brand launches, changed our use of media, changed the off-price cadence and we’ve had a big spike in regular-price selling,” she said.

According to Brooks, The Bay was in the black on a net basis last year and will be this year, though she declined to reveal figures. Volume should be about flat, with Canadian retailers appearing to be pulling out of the recession faster than their U.S. counterparts.

The Room is the most vivid sign The Bay doesn’t want to be Canada’s tired old department store any longer. It quadrupled in size to 22,000 square feet and has 35 labels never sold before at the site, including Erdem, Balmain, Antonio Marras and Josh Goot, as well as Moschino, Lida Biday, Ungaro, Akris Punto and Armani Collezioni. Footwear; accessories and jewelry; a vintage department including Chanel, Halston and Yves Saint Laurent, and a 3,000-square-foot VIP suite for high spenders were added.

Designed by the firm Yabu Pushelberg, which has done much work for Holt Renfrew and Bergdorf Goodman, among other retailers, the floor has a neutral palette of whites, creams and grays — allowing the designer collections to project. One focal point is the gallery area for designer retrospectives and seasonal stories, polished-silver screens and a hand-formed wire sculptural mobile with gunmetal-colored flowers and birds by Teresa Leung. Throughout, there are decorative screens, hand-painted wall treatments and wooden chandeliers, lending an ethereal appeal. Walls were torn down to expose windows and bring in light.

The project cost more than $192 a square foot, or roughly $4.2 million, and The Bay is seeking to at least triple the volume of the floor, which has been around $9.6 million.

“We wanted The Room to feel very art-gallery inspired, rather than the expected series of in-store shop concepts, while at the same time saluting our rich history and giving a blast of excitement and attitude to our old grand dame,” Brooks said. “There are no hard shops. But the flow allows each designer to have their own space separate from other designers.…It’s largely a positioning exercise demonstrating we have the capability to be good brand stewards. It was a big issue when I joined the company.”



It’s an exercise with stretch. “We could easily expand The Room to Montreal and Vancouver, where we have flagships,” Brooks said. “It’s something we are monitoring.”

The Room might syphon some business from Holt Renfrew, Canada’s luxury chain, though Brooks doesn’t consider it a direct assault. “We are not even in the same part of town. We have always had this [designer] customer. In fact, we had them before Holt until the Eighties. They’ve owned the market for the last couple of decades. We can probably do at least 50 to 100 percent more business with our existing customers just with our broadened assortment. I also think we will attract new customers.”

Elsewhere in the store, DKNY, T Tahari, Lauren by Ralph Lauren, Hugo Boss Women’s, Juicy Couture, Ugg, Diesel, Pink Tartan, Ed Hardy and LeSportsac have been added.

The Hudson’s Bay Trading Company, parent of the The Bay and Zellers in Canada and Lord & Taylor in the U.S., in the second quarter of this year pumped $70 million into its two Canadian retail holdings. While some perceived that as needed to keep the retailers operating and buying goods, Brooks had a somewhat different take, saying the infusion was primarily for capital investments to create spaces for brand launches.

There’s no shortage of space to work with. The Bay has 15.5 million square feet of space total, and seven flagships with from 300,000 to 700,000 square feet of selling space each. “We’re rightsizing, not downsizing,” Brooks said. “It means taking footage in very low-performing product categories like appliances and moving it to ready-to-wear, lingerie, men’s, women’s and kids’. There is a lot of opportunity to rightsize departments.”

She cited cosmetics, which in some locations has just 2,500 square feet but can be as large as 60,000. She also noted a 20,000-square-foot Olympic Superstore at the flagship in Vancouver, where the Winter Olympics will be held next year, though the Olympic collection is being sold nationally at The Bay.

HBTC thought about converting some of the real estate to Lord & Taylor, which only has stores in the U.S. At great cost, that could have been a solution to filling the void for better merchandise, but the idea was short lived. “It’s not on the plan, but never say never,” Brooks said.

More alive is the possibility of integrating London’s Topshop inside The Bay via shop-in-shops. “That’s still in the works,” Brooks acknowledged. “We are looking at a lot of different opportunities, but [Topshop] is certainly one that we are working on. We can give them the best corners in every major downtown market. We have got the primary real estate. For anyone entering the Canadian marketplace, we are a great choice. We can do the retailing or lease the space.”

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