Article August 10, 1994

<CR><RD><BR><CS:BOLD>ONTARIO GETS ITS FIRST OUTLET CENTER<BR><BR>Byline: </CS>Miles Socha<BR><BR>ST. JACOBS, Ontario -- Ontario's first factory outlet mall is drawing crowds and starting to convince hesitant Canadian manufacturers that outlets...


Byline: Miles Socha

ST. JACOBS, Ontario — Ontario’s first factory outlet mall is drawing crowds and starting to convince hesitant Canadian manufacturers that outlets present a good opportunity for business.
The 30-unit St. Jacobs Factory Outlet Mall officially opened in July, although a few stores had opened earlier.
“Now that it’s operating, they’re much more interested,” said David Howey, president of St. Jacobs Countryside Inc., the center’s management company. “We’re getting more interest from new tenants and prospective tenants.”
Since only one in three planned outlet malls in North America ever breaks ground, many suppliers have been standoffish, Howey said.
Howey said volume is expected to be about $200 to $235 per square foot. The complex could generate upward of $15 million a year.
Current tenants sell women’s, men’s and children’s apparel, shoes, home accessories, giftware, books and specialty foods.
A few Canadian resources have set up shop at the new mall. Among them are Oxygene women’s wear and Pam Pam leather, from Montreal; Northern Splendors, selling fleece and casual wear; Cotton Wave and Jade, each selling cotton apparel; The Apparel Depot, selling such labels as Liz Claiborne and Jones New York, and Econo Jeans, selling Hollywood jeans.
Some American apparel vendors are Lingerie & More, selling Carole Hochman and Lily of France, and Today’s Child.
Still, Howey acknowledged a lingering reluctance among some Canadian manufacturers to set up shop in outlet malls. Many are loathe to upset department stores, their major customers, which fear direct competition.
For example, “It’s very hard to get men’s fashions,” Howey said. “In Canada, there is a major sensitivity issue that the large manufacturers have to address.”
The 77,000-square-foot mall is housed in a new structure, designed to look like a barn, that blends in with the rural landscape.
Howey is confident that time will prove to Canadian makers that outlets can coexist with regular retail.
“This is a different customer,” agreed Carlo Tucci, owner of the Levi’s Outlet. It is the first Levi’s Outlet in Canada, but it is a Canadian corporation based in Waterloo, Ontario. Tucci reported sales “well beyond my expectations” since the store opened quietly, without advertising, in mid-May.
He predicted suppliers in Canada will quickly learn, as they did in the U.S., that outlets are a valid, nonthreatening channel of distribution.
Meanwhile, mall managers hope the mall’s location near a top tourist destination will fuel a 40,000-square-foot expansion slated to begin this year.
St. Jacobs is a restored, turn-of-the-century village in the center of Canada’s largest population of Old Order Mennonites. Its farmers’ markets, flea markets and nearly 100 craft, antique and food shops attract a million visitors annually.
Factory outlet malls are also under development in Niagara Falls, Ontario, and in Barrie, north of Toronto. There are six outlet malls in Quebec. Canadian outlet mall developers have had to battle a lack of domestic manufacturers and the resistance of U.S. manufacturers to cross the border. The St. Jacobs mall is a joint venture of Mercedes Corp., a privately held development company, and the Mutual Group, an insurance firm based in Waterloo, Ontario.
— Fairchild News Service