MONTREAL — Simons waited 159 years before it opened its first store outside Quebec City, when it opened here in 1999. Now, the retailer plans to expand across Canada, seeking to capitalize on the uncertainty surrounding the country’s two biggest department store chains.
The privately owned Simons, which operates seven fashion department stores in Quebec, has hired a real estate broker to look for space in the Toronto area and also has its eyes on a site in an expanding suburban mall in Ottawa, the nation’s capital.
In addition, it would be interested in downtown stores that both the Hudson’s Bay Co. and Sears Canada might unload. HBC, which operates the Bay and Zellers, was recently purchased by American businessman Jerry Zucker, while Sears Canada’s majority owner, U.S.-based Sears Holding Corp., is attempting to take it private.
Asked whether Simons would be contemplating expansion now if it wasn’t for the uncertainty swirling around HBC and Sears Canada, president Peter Simons said: “I think probably yes, since the turmoil provides opportunity, but maybe the turmoil is also part of the reason for our strong performance of late.”
Simons, whose great-great-grandfather opened his first Simons store in Quebec City in 1840, 27 years before Canada officially became a country, added, “But it’s hard to say. If you said there was no turmoil and we had the results we had, I guess we’d still be going ahead.”
If some stores from the two chains become available, Simons said his company is “preparing the ground” for any opportunities that should arise. Initially, the retailer is looking at the Ontario market next door, but with the difficulty of finding 100,000 square feet, the average size of a Simons store, it might have to look farther west. Since all of its stores are custom designed, taking 16 to 24 months to build, the first store wouldn’t likely open before 2008.
The retailer spent about $10 million to renovate the 90,000 square feet it now occupies downtown here, at a time when sales were about $87 million.
Simons has annual sales of more than $175 million, or roughly $565 a square foot, ranking it in the top 1 percent of retailers in terms of productivity in North America, Peter Simons said. It has developed a loyal following in Quebec with several of its own labels, including Twik for fashion-forward girls, Contemporaine for women, La Guêpiere for lingerie and Le 31 for men.
Retail consultant Wendy Evans of Toronto-based Evans & Co. said Simons is successful for a number of reasons, including measured expansion and knowledge of its customer base.
“Their sourcing is good, their presentation is good and they offer a very pleasant atmosphere to shop in because they’re not so big but more like a specialty store,” Evans said. “And their mid-to-upper price points offer good value. There are not too many retailers in this country like them that provide good fashion in their price bracket.”
While most of its products are made offshore, Simons has a significant amount of private label sourcing done in Canada. The retailer sources from around the world and has buying offices in Paris, London, Florence and Hong Kong. It also spends between 80 and 120 hours training each employee.
It carries a lot of exclusive merchandise through its Contemporaine label, along with Kenzo and Amerello from Italy.
“This season, we’re trying to diversify into less-known brands that seem to have the fashion and creative content that our customers seem to appreciate,” Simons said. “They’re looking for really creative, world-class merchandise, which I’m not saying high-end brands aren’t, but sometimes there’s a demand there for the brand name as opposed to the fashion content.”
Although HBC and Sears are not a threat to its market share, new arrivals, such as Sweden’s H&M and Zara from Spain, could pose more of a challenge.
“We’re middle to high-end and they’re middle, I’d say,” Simons added. “Zara does a very good job in their fashion merchandising, as does H&M, with a very fast turnaround. Yes, I’m concerned and we’re following them very closely. But there won’t be one [dominating] store left in the world.”