Holt Renfrew opens the second hr2 store today, advancing its program to enlarge its footprint across Canada and broaden the appeal.

This story first appeared in the May 10, 2013 issue of WWD. Subscribe Today.

The one-level, 26,000-square-foot hr2 is located in the Vaughan Mills off-price center, one half hour north of Toronto. The first hr2 unit opened March 28 at the Quartier DIX30 shopping center on the south shore of Montreal.

“In addition to exciting plans to expand and enhance our luxury Holt Renfrew banner, our hr2 stores offer a further channel to extend our market reach,” said Holt Renfrew president Mark Derbyshire.

“Hr2 is not an off-the-rack operation. There is a clear personality and DNA to the store,” Heather Arts, vice president of hr2, told WWD.

The executives described hr2 as a “premium off-price store” with about 150 contemporary and designer labels sold at 25 to 60 percent off.

“Seventy-percent of the product is from the same brands that Holt Renfrew carries, but the products are not the same,” Arts explained. She also said the products are in season, and roughly half of the store would be contemporary labels; half designer.

The store sells 150 brands, including Alice + Olivia, Diane von Furstenberg, Splendid, Michael Michael Kors, Cole Haan, Ray-Ban, Seven For All Mankind, Nicole Miller, Elie Tahari, House of Harlow, Naked and Famous Denim, Anzie and Hunter. Women’s will represent about 50 percent of the volume; men’s, 20 percent, with footwear, accessories and jewelry representing the remaining 30 percent. Hr2 has a separate buying team from Holt Renfrew.

A few better brands are creating “small” merchandise groups under the hr2 private label, which is currently available in men’s shirts, ties and suits and some sportswear separates. Women’s cashmere under the hr2 label is being developed for the fall.

Last year, when executives disclosed the hr2 concept, well before the launch, it was portrayed as a chain for contemporary labels. The off-price component was kept under wraps until recently.

Arts said hr2 is Canada’s first premium off-price retail concept. Some might compare it to Nordstrom Rack, Saks Off 5th or Last Call by Neiman Marcus, but Holt officials made clear that hr2 is not an outlet and not a clearance vehicle for Holt Renfrew stores, though they acknowledged there could be a minimal amount of leftover items from the Holt Renfrew stores.

“This is really a fun, alive experience,” enhanced by digital signage, a minimalist decor created by Janson Goldstein, and deliveries of new fashion on a weekly basis, Arts said.

It’s also a big piece of Holt Renfrew’s growth strategy, which calls for a 40 percent buildup in square footage through new stores, renovations and expansions. A 120,000-square-foot flagship will open in spring 2016 at Square One Shopping Centre in Mississauga, Ontario, and this year Holt Renfrew in the Yorkdale section of north Toronto is doubling in size to more than 120,000 square feet. Other stores will be renovated and expanded; some will be completely rebuilt.

The company is eyeing real estate across Canada for additional hr2 locations that could open next year and beyond. The ongoing influx of American retailers into Canada, including J. Crew, Target and, soon, Nordstrom, has spurred Holt Renfrew’s aggressive growth maneuvers. Officials also said 2012 was a strong year, propping up the business for expansion.

Holt Renfrew is part of Selfridges Group Limited, which also operates Brown Thomas in Ireland, de Bijenkorf in the Netherlands, Ogilvy in Canada and Selfridges in the U.K.

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