This story first appeared in the February 17, 2016 issue of WWD. Subscribe Today.
A land of 36 million people with a per capita income of $50,000, Canada is viewed as a fertile shopping ground, with retailers such as Nordstrom and Saks Fifth Avenue descending on the country.
The latter’s arrival is set for Thursday, with a 165,000-square-foot flagship bowing at CF Toronto Eaton Town Centre, the first store the retailer has opened outside the U.S. since 2008, to be followed by a second Saks unit at CF Sherway Gardens, also in Toronto, on Feb. 25.
Both stores will be models of Saks’ new philosophy, with merchandising innovations and service initiatives to be replicated at upcoming stores at Brookfield Place in Lower Manhattan and Brickell City Centre in Miami. “What’s really exciting is that we’re opening a flagship as we’re invigorating the brand,” said Marc Metrick, president of Saks Fifth Avenue. “We’re looking at Saks in a very modern and approachable way.”
As for the matter of national pride, Saks parent Hudson’s Bay Co. has a 350-year history in Canada to uphold. “We have the advantage operating in Canada as long as we have,” Metrick said.
Nevertheless, the luxury field in Canada is getting increasingly crowded. Nordstrom, which opened three full-line stores in Calgary, Ottawa and Vancouver, has three units opening in Toronto in the fall at Eaton Town Centre, Sherwood Gardens and Yorkdale Centre. And the Seattle-based retailer on Tuesday revealed that it will open a Nordstrom Rack at One Bloor in Toronto in 2018.
Holt Renfrew, Canada’s de facto luxury destination, decided to step up its game in light of the U.S. competition with a series of expansions and renovations, including enlarging its Bloor Street flagship and opening its first men’s-only store. Overall the retailer plans to grow square footage by more than 40 percent.
Target’s failed Canada expedition — the retailer exited its short-lived, money-losing business in 2015 — underscored the complexity of a country that seems so much like the U.S. that it’s humorously referred to as the 52nd state. But it’s actually nothing of the sort and rather a series of unique markets with different style preferences and shopping habits.
“Canada, for so many reasons, makes abundant sense,” Metrick said. “We were really missing in Canada. As a long-time Saks executive, I thought it was something we needed to do. Toronto is the fourth-largest city in North America.”
The retailer is starting out with the advantage of having 70,000 Saks Fifth Avenue credit card holders living in Canada; the country is the second-largest shipping destination for saks.com.
“When you go back to the Saks acquisition [by HBC] in 2013, one of the key elements of the deal was to expand Saks into Canada,” Metrick said. “It was an untapped market and a brand with a tremendous amount of [recognition]. We feel like there’s space there to go into that zone.”
Metrick compared Toronto to Boston, noting that there are eight luxury retailers in the Massachusetts city, which has a population of 4.5 million. “The greater Toronto area has 5.5 million people,” he said. “It’s serviced by three Holt Renfrew stores. From an overall size, there’s actually room. By no means is it saturated. We’re going in at the right time.”
Saks plans to open five stores in Canada but Metrick left the door open for additional units. “We’re looking at this opportunistically,” he said, “from a real estate and market positioning standpoint.”
As for positioning the new stores, “we’re not looking at this as a Canadian Saks or an American Saks,” Metrick said. “These are our Toronto locations. The customers are sophisticated and avant-garde and they definitely like designers. They’re looking for something very special in terms of ready-to-wear and footwear. Fine jewelry is a big opportunity, with brands such as Pomellato Piaget, Marco Bicego and H.Stern. People associate Canada with furs. We’ll have furs in Canada and we’re expecting big things for that business.”
Metrick declined to discuss sales volume, saying only, “Both stores are positioned to do very well in terms of productivity.”
Design elements at the Eaton Town Centre flagship were inspired by the Canadian wilderness and harsh weather. On the first level, floor to ceiling glass-and-bronze panels of waves in lakes and rivers depict the country’s rugged landscape. A ceiling sculpture on the second floor was made from 8,000 pounds of hand-blown Czechoslovakian glass, while bronze sculptures of trees are part of the store design by FRCH Design Worldwide and Saks’ store design and planning team.
Both units will incorporate some “greatest hits” from the Fifth Avenue flagship, such as a 10022-SHOE salon; the flagship will have 1,000 pairs on display, with 15,000 pairs in the storage room.
Dior, Valentino, Louis Vuitton, Saint Laurent, Chloé, Céline, Prada, Alexander McQueen, Stella McCartney, Givenchy and Azzedine Alaïa will be part of the mix. “We wanted an A-plus matrix that will travel,” Metrick said. “Everything, from the core elements, the experience, the assortment and the edit has got to be localized for the consumer. Nothing is going to be cookie cutter.”
“The team really came together to create the true Saks edit for our Toronto customer,” said Tracy Margolies, chief merchant at Saks. “You’ll see new and emerging brands, exclusives and a differentiated edit of our core resources.”
There are shops-in-shop for leather goods on the main floor and what Metrick referred to as “softer icon shops inside ready-to-wear” — in other words, the emphasis will be on Saks, not designers’ in-store shops. “There definitely will be a signed positioning for brands, but it’s a new concept for us,” Metrick said. “We want the consumer to feel she can shop across brands. We want to be more modern. We’re creating a truer shopping experience.”
Saks also tinkered with the men’s area. “We’ve changed flow and adjacencies to be much more lifestyle-oriented and we’re featuring footwear just like we’ve done with women’s shoes,” Metrick said. “Men are the new women. They’re shopping and they’re [buying] fashion.”
Beauty is getting a makeover, too, with lower sight lines and more of an open-sell environment. Every cosmetics station will be staffed with makeup artists and on-the-go facials will be offered along with fragrance personalization.
On the second floor are plush, personalized private shopping areas for men and women. The women’s area also offers a massage room — a first for a Saks store.
Metrick wants the stores to be “more than just a place to buy things,” so he’s installed Saks Food Halls by Pusateri’s, measuring 25,000 square feet at Eaton Centre and 18,500 square feet at Sherway Gardens. Each store will have its own concepts by Oliver & Bonacini. “Food is a big component,” Metrick said. “It’s all part of the new way we approach our environment. We want [shoppers] to come and spend time at Saks, not just shop.
“Today, consumers can shop anywhere,” Metrick said. “But luxury shopping isn’t just about price. Wherever you move in this store, we wanted to encourage the feeling that shopping should be a fun, social experience. We want to do everything we can to build on this spirit and make Saks accessible to any shopper who loves beautiful things.”
The Eaton Centre Saks is opening in a space that was carved out of the massive Hudson’s Bay store, which now has about 600,000 square feet of space. The two stores will be entered through a common lobby entrance — “like a hotel, but not intimidating,” Metrick said. “From an HBC perspective, you’ll be able to buy Louis Vuitton [at Saks] to a Nespresso machine [at Hudson’s Bay]. The whole end of that shopping center will be the most powerful and differentiated. Hudson’s Bay will see the footfall increase and vice versa for Saks.”