Amid the tide of rising competition, Holt Renfrew & Co. Ltd. is out to create Canada’s largest and most compelling luxury destination.

This story first appeared in the November 20, 2013 issue of WWD. Subscribe Today.

On Tuesday, Holt disclosed that it will spend $60 million to renovate, expand and transform the Montreal-based Ogilvy, one of North America’s oldest department stores.

The 147-year-old emporium, situated on the corner of Saint Catherine Street, will be enlarged to 220,000 square feet, from the current 140,000 square feet, thereby becoming the biggest unit in the Holt Renfrew chain, which bought Ogilvy in 2011. New luxury and designer shops, both leased and nonleased, will be installed.

“Ogilvy is being reimagined by Holt Renfrew,” said Mark Derbyshire, the president of Holt Renfrew, in an interview.

“We have spent the last two years diving deep into this, talking with, and mostly listening to, customers of Ogilvy and Holt to really understand. We discovered the stores have more that’s in common than dissimilar. They are both about fashion, style and luxury, and customers looking and feeling great.”

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Construction on Ogilvy is scheduled to start next fall and be completed in 2017. It involves expanding Ogilvy into the adjacent site of the former Hotel de la Montagne, which was demolished.

Sources said Holt expects Ogilvy to generate $250 million in sales, or more, after the overhaul is complete. The store will remain open throughout, as will the existing Holt Renfrew unit in Montreal, which is two short blocks away. The Holt store will close once the Ogilvy project is complete.

“The whole will be greater than the sum of the parts,” Derbyshire assured. “We have the ability to create one grand store vision for the Montreal market.”

The Ogilvy strategy is a key component of Holt Renfrew’s quest to become a $1 billion business and grow its footprint 40 percent by 2017. Holt, which did an estimated $800 million in volume last year, is working to increase square footage through renovations, expansions and new concepts, such as the Square One prototype in Mississauga, just west of Toronto, which should be completed in spring 2016, and hr2, an off-price division launched earlier this year. By enhancing its real estate, Holt will be able to strengthen its designer and brand partnerships and make it more competitive against Canada’s ongoing influx of U.S. retailers, including Nordstrom and Saks Fifth Avenue, which have revealed plans to open stores. Other newcomers to the market include Target Corp., J. Crew Group Inc. and Ann Inc.

The 175-year-old Holt Renfrew, with 2,300 employees and nine stores across Canada (10 including Ogilvy) is part of the Weston family-owned Selfridges Group Ltd., which includes Brown Thomas in Ireland; de Bijenkorf in the Netherlands, and Selfridges in the U.K.

Asked if Nordstrom and other retailers entering Canada pose a greater competitive threat, Derbyshire responded that the situation has not really changed all that much. “We’ve always had competition,” Derbyshire told WWD. “There are a lot of vendors operating shops in Canada. There’s online, and customers are sophisticated. They travel the world,” and shop international stores.

“We built this strategy [of growth] four years ago,” Derbyshire continued. “We knew competition would come, but we didn’t know how or where or when. The strategy we have will bring out the best in us. I don’t say that to be arrogant. I take our competition very seriously. But we’ve got the right strategy. We’ve got the right brands. We’re working hard. I think competition brings out the best in us. Holt Renfrew is doing very well and I’m pleased with the growth of Ogilvy. It will be another great year for us. Another record year.”

Ogilvy will call out its affiliation with Holt by being branded “Ogilvy, part of the Holt Renfrew & Co. collection.” While the new moniker is cumbersome, in all likelihood, store signs will present Ogilvy in big lettering, and the trailer in smaller lettering.

Derbyshire also downplayed the notion of one day dropping the Ogilvy name altogether. “That level of distinction really matters. There is something uniquely special about it. The Ogilvy name is very important to us in this market. It is equally important that Holt Renfrew be a part of that. Both brands are heritage brands.”

With Ogilvy getting more integrated into Holt, some consolidation of staff and functions is expected. “We’ve got to work our way through that, but overall numbers will go up,” Derbyshire said, referring to head count and revenues.

Asked how the presentation will change, Derbyshire said it will be “really customized for Montreal, very specific to the market….It’s not just about what brands we carry. It’s how do we assort the brands.”

Part of the plan entails retaining local leadership at Ogilvy and keeping it separate from the Holt organization, based in Toronto. On Tuesday, Derbyshire named Joanne Nemeroff senior vice president based in Montreal, to lead the Ogilvy team, which also has its own heads of buying, marketing and store operations.“That’s a key takeaway. This local leadership element will really enable us to deliver on our promise,” Derbyshire said. Nemeroff will report to Derbyshire.

He said Ogilvy will become the largest store in the Holt Renfrew luxury chain, where stores range from 120,000 square feet to the 150,000-square-foot flagship on Bloor Street in Toronto.

Ogilvy, with five floors, has had what Derbyshire described as a traditional department store offering with flair, focused on fashion, and with a wide scope of categories “on the periphery” such as furniture.

Between Holt and Ogilvy in Montreal, “There’s certainly some overlap,” Derbyshire observed, noting that Michael Kors and Burberry, among other brands, are sold in both locations. Despite that, Derbyshire said the two stores complement each other, more than compete with each other, with Holt skewing a bit higher in price.

“We will really bring these brands together with the best of both,” Derbyshire said.

As far as the lineup of labels, he cited a pumped-up assortment including Brunello Cucinelli, Canali, Hermès, Louis Vuitton and some Montreal-based brands such as Marie Saint Pierre and Judith & Charles.

Other sources said Azzedine Alaïa, Céline, Chanel, Christian Dior, Givenchy, Gucci, Hermès, Louis Vuitton, Miu Miu, Paul Smith and Ermenegildo Zegna will most likely have strong presentations.

“There is a very European focus” at Ogilvy, Derbyshire said. “Italian and French brands are very strong here. They speak to the way of life, the way customers wear their clothes, with a joie de vivre and a very specific point of view.”

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