TORONTO — Harry Rosen has a lock on the Canadian men’s wear market, but that hold hasn’t come without a lot of hard work.
The company was founded in 1954 by Harry and his brother Lou Rosen in a small storefront in Toronto to provide made-to-measure suits for men. The firm has since grown into a 300 million Canadian dollar ($228.3 million), 18-store chain with locations in the seven largest cities around the country and some 1,000 employees.
Although Harry stepped back from the day-to-day operation of the business in 2005, he still serves as an ambassador, often stopping by one of the stores to chat with customers. But he left the company in good hands: as chief executive officer since 2000, his son Larry Rosen has built on his father’s legacy. Waiting in the wings is Ian Rosen, Larry’s son, who is joining the family business this summer to oversee its digital marketing initiatives, and at the same time, ensure the eventual transition to the next generation will be seamless.
But Harry Rosen has also branched out beyond its core business, teaming up with Ermenegildo Zegna to open flagship stores for the luxury Italian label in Canada. In August, a 3,000-square-foot Zegna store will open on Bloor Street West, steps away from Harry Rosen’s flagship 55,000-square-foot store. The 4,500-square-foot shop in Vancouver’s Pacific Centre — which Rosen has quietly operated for Zegna for years — will be revitalized with a Peter Marino design. And there are plans to open more.
At the same time, the company has entered into a joint venture with Davids Footwear, another family-owned business in Toronto that sells designer shoes and accessories for women. The plan is to revamp and upgrade that brand to Harry Rosen levels and begin a national rollout in Canada.
Here, Larry Rosen talks about what makes Harry Rosen special, its history, its future and the other retailers he admires.
WWD: Can you run through the history of the company?
Larry Rosen: It’s a great story of entrepreneurialism. Harry, my father, is almost 87 and in fine shape and is still a mentor for me, and one of the people I admire most. He and his brother Lou started in 1954 and in 500 square feet, they built a made-to-measure business. They really started by bringing a look to Canada that Canada didn’t have. In those days it was called the Brooks Brothers look: the Madison Avenue, natural-shoulder look. He actually went down to New York, bought a suit, took it to a local maker named Coppley and they duplicated it. And all the young executives in Toronto flocked over there. He was so successful that by 1961, he moved the business to a great location in the heart of Bay Street, which is our Wall Street. He built a very large business and then expanded to a second store in Yorkdale in 1968; Bloor Street was the third in 1970. Then in the early Eighties, he started expanding across the country and now here we are in the seven major markets in Canada with 15 mainline stores and a few outlets and a strong, strong online business.
WWD: Why do you think the business has been so successful and when did you join?
L.R.: My father is a real entrepreneur. He’s a guy who wills business into existence — he’s brilliant. I did an undergraduate at the University of Toronto in economics, I then went to the University of Western Ontario and got a law degree and an MBA. I practiced law in Toronto for a few years and in 1985, I was so proud of my father expanding throughout the country that I said I have to be part of this. So I joined. I started as a buyer, then I ran stores. By 1997, I became the president, and in 2000, after the tragic death of our former ceo Bob Humphrey, I became the ceo. Harry stepped back from active involvement in the business around 2005. I have a tremendous team of executives around me; the most recent is my son, Ian. We’re all about transition and succession.
WWD: You once had a store in the U.S. What happened to that?
L.R.: We did have a store in Buffalo in 1987 and it was successful, but in 1995 we started a whole venture of bringing Hugo Boss stores to the United States. We had nine of them, but in 2001, I said it was too difficult to run remotely, so we sold it back to Hugo Boss. We had converted the Buffalo store to Hugo Boss at that point. It was a great learning experience for me and I realized that if you spread yourself too thin, your business gets hurt.
WWD: So that’s why you never really tried to move into the U.S.?
L.R.: Harry Rosen’s brand is so well established here — in Canada it’s the place to shop for men. To be honest, I think there’s room in the [American] market for us, but it’s not on our current horizon. Expanding our reach in Canada is our focus for the time being, between the Zegna venture and Davids and other opportunities that will come along. We just brought in my son and set some pretty aggressive targets for him to achieve. Our digital business is the strongest part of our business — it’s grown 40 percent over the past year — but we think that having him work with our head of e-commerce, we can grow that very aggressively.
WWD: Are all your stores in big cities?
L.R.: Yes. Harry Rosen stores have to have critical mass. Our smallest store is about 8,000 square feet, but I wouldn’t open a store today under 12,000 square feet, and that would be a small satellite store. There are seven major markets that can support a Harry Rosen store in Canada. Greater Toronto is over 6 million people so we have seven stores in Toronto, two in Montreal, one in Ottawa, four in Vancouver, two in Calgary, one in Edmonton and one in Winnipeg. In every city, we’re the major quality men’s store. With the convenience of online, unless a store has a superb selection and outstanding service, there’s no rationale for it in the market. You’ve got to go big or go home.
WWD: Have you ever entertained going into women’s?
L.R.: With Davids, we’re now in the women’s shoe business, and we’re learning. But I wouldn’t enter women’s under Harry Rosen. We did research and it has a very masculine persona as a brand, although women all the time tell me that they would also love to have the customer service and selection and merchandising — all the things that Harry Rosen stands for. At one point in the late Eighties, we actually did women’s, but we went into it for the wrong reasons. One of the things about us is that we’re a specialty store and we’re experts and I think if we water down our brand in any way, I think it takes away from the focus. When we acquired our interest in Davids, people asked if we were going to put Davids departments in Harry Rosen and we said no. To me, we want to make Davids into the greatest experience in women’s footwear in this country and we want to bring together a curated selection of the greatest brands with a high level of service and a really exciting environment and be to that women’s customer what Harry Rosen is in men’s wear. We have no interest in changing it into something it isn’t or combining the labels. We want to keep them separate in terms of their branding.
WWD: Whom do you consider the competition for Harry Rosen?
L.R.: Holt Renfrew, Nordstrom at the lower end, Saks Fifth Avenue, and a lot of single-vendor brand stores such as Hugo Boss, Burberry, Moncler. There are also some independent stores so there’s lots of competition.
WWD: American retailers have not had an easy time breaking into the Canadian market historically. Why do you think that is?
L.R.: It’s difficult because while there are a lot of similarities between Americans and Canadians, there are also points of differentiation. We’ve had an onslaught of American department stores but they haven’t taken market from us. I think it’s mostly a women’s wear game, but with Saks for example, if someone in New York City is deciding what someone in Edmonton or Calgary wants, does that really make sense? Or someone in Seattle for Nordstrom. Every city here is different — we study them, we know them, we have strong people positioned in every market. This is our business, this is our whole focus.
WWD: Who is your customer?
L.R.: Our customers are managers, owners, professionals, entrepreneurs, they’re leaders or people who aspire to be. They’re all ages, they have a certain level of confidence, they like better things, they want to express themselves, and their image is important to them. We have the Bergdorf Goodman customer, we also have the Bloomingdale’s customer; we have a pretty broad spectrum. We have suits that open at 895 Canadian dollars, which is only around $700 U.S.
WWD: Who are some of your major vendors?
L.R.: Zegna, Canali, Cucinelli, Tom Ford, Kiton, Hugo Boss, Atelier Munro, Eton, Paul & Shark, Moncler, Prada. Canada Goose is huge for us. In shoes we have Ferragamo, Tod’s, To Boot — you name it.
WWD: How does it break down between clothing and sportswear?
L.R.: It used to be a lot more clothing. We’re not a suit store — we started a long time ago that way, but we realized our business is much broader and we think of ourselves as being in the business of assisting men develop a confident personal image for any time, any place, any occasion. As you know, the workplace has casualized and we’ve evolved with that. Every year sportswear and outerwear and casual sneakers and shoes become a larger percentage of our business. I would say our business today is 50 percent dresswear and 50 percent sportswear.
WWD: Is sportswear growing more quickly?
L.R.: Yes, but there’s that third wardrobe too: the soft sports jacket, a knit. Is that sportswear or the new businesswear? We really think of a man’s life and think, what are the occasions? For instance, we have a big focus on weddings: when you think about the fact that it’s the most photographed day of your life and a bride goes out and spends thousands of dollars on a wedding gown, and then what’s a guy do? He goes and rents an ugly tuxedo? We have some educating to do. If there’s one time when they should be splurging on quality and something that looks great on them, it’s their wedding. We realize that we’ve got to communicate that better and we are, and we’ve been very successful. The same thing with the new businesswear and how to dress for the new office environment. We have to be there to advise a man when should he wear a suit or a more dressed-down outfit. This whole trend of a younger man wearing a suit with an open-collar shirt and sneakers, how do you make that look right for an office? That’s what we do, we advise. We don’t call our people salespeople, we call them clothing advisers. And they are: they’re too highly trained to be called salespersons, they develop strong, long-term relationships with the people they advise, and they come back. We have a loyalty program, but that’s secondary. The real loyalty you get is when people feel great and look good. That’s the real benchmark of client relations.
WWD: How much does made-to-measure represent?
L.R.: It’s 25 percent of our tailored clothing business. Today’s man is eclectic, and self-expression is important, whether you want to have a particular color in the lining or whatever. And there’s nothing more comfortable than a well-made suit that fits you. Plus, that’s where we came from, that’s where my dad started. He was doing trunk shows into his 80s and it was a great honor for people to be fitted by Harry.
WWD: How have you maintained your father’s legacy?
L.R.: My dad gave our brand a sense of humor and character. He’s been very respectful of the transition from him to me and now to a third generation. We try to keep the character of the brand and our values. We’re a family business and a private company and our values are based on our founder’s mission of how a customer should be treated, but I like to think we’re a highly professionally managed company. We’re an independent, but an independent with scale.
WWD: How do you deal with the evolving landscape?
L.R.: For those of us in retail for a long time, we don’t want to let specialty retailing die. We know we have to evolve, we have to become modern and bring in modern systems, leadership, IT, but there’s a reason for specialty retailing as opposed to department stores or cookie-cutting retailing: multibrand specialty retailing answers a lot of the needs of the customer. I worry because they tend to start from small family businesses and get swamped in this invasion of department stores and big international players. A lot of the good ones got wiped out because they couldn’t change with the times. We’re committed to being agile, strategic, recognizing the need to constantly bring in new and younger clients but also stick to our roots of values of luxury and taking great care of our customers. We’re proving there’s a strong role for specialty retailers and it’s my belief that we can beat a generalist any time.
WWD: We hear so much about retailers having to provide experiences. How do you address that?
L.R.: There are a lot of clichés and buzzwords. For sure you have to give people a reason to go in a store, but you also have to realize the paradigm has changed and relationship selling isn’t just in-store. It’s online, through texts, it’s through making it as convenient and easy for a client as you can. Our guys will go to customers’ offices or they will lead a customer through an online purchase and we give our associates credit for that. We want our associates to make the right decisions and not just drag people to the store. There are times when the customer should come to a store, when you need to fit them or they want to see a full collection. But there are times when a guy needs a couple of white dress shirts and another pair of Tod’s loafers. Our customers are busy people; they enjoy shopping when they’re not stressed out. But when they are, we’ve got to make it as easy as possible for them.
WWD: What percentage of your business does online represent?
L.R.: Not enough; it’s a little over 4 percent and growing at 75 percent this year, so we’re really pounding it out. That’s what Ian’s job will be: to take us to 10 to 15 percent online in a few years. But for the people with big percentages online, the question you should be asking is what percentage of their regular-price business is online. The online world has become the outlet for a lot of retailers. It’s a way to dispose of a lot of your broken sizes at low prices, and it’s very effective. We have very defined sales periods and when we go on sale, we get a big bump. But I don’t want an online business that doesn’t reflect our main business and that’s not as easy to develop in men’s wear. We need a proper app — we have a great mobile site and it’s very effective. So we view the online business as a way to get a greater share of our customers’ wallets. One of my big concerns with online is that people think it’s like shopping in-store. I’ll just order 12 and return 11. The economics of that is not going to work. If people think they’re going to go into a store, use it as a showroom, try it on and then buy somewhere cheaper, guess what? Eventually that showroom won’t survive.
WWD: You have three outlet stores. Is that how you keep the regular stores fresh?
L.R.: We view our outlet business very, very differently than the Rack or Saks Off 5th. To us, an outlet store is basically remnants from your chain. It’s older goods, it’s broken sizes and it’s power-priced to clear. We also help keep our vendors as clean as we can, so if they have older goods, we’ll buy them out. It’s run like a legitimate outlet. Nordstrom came into Canada and now the goal is to open a zillion Racks. Saks Off 5th has opened a zillion already. They’re obviously making a lot of money off their outlets; it’s probably one of the most profitable parts of their business. To us, it’s a way to keep our mainline stores fresh. We could have been tempted into a national expansion of outlets. I know I’m old-fashioned, but I just can’t believe that having an outlet that has more weight and girth than your mainline division is long-term good for the brand. Once you do that, you lose your way and we’re not losing our way.
WWD: What’s Ask Harry?
L.R.: In the early Sixties, my father started running ads in the Globe and Mail, Canada’s national newspaper, answering questions like, “What length should your cuff be,” or “What color belt should you wear with a brown shoe?” We continue that today. There’s an Ask Harry in our magazine and on our web site. It [reflects] our competitive advantage, which is our knowledge of men and men’s wear. It’s a statement of expertise. I personally will answer the queries. More often than not, they’re simple things and it adds to the element of personal touch.
WWD: Tell me more about the collaboration with Zegna.
L.R.: I think that’s a great statement of the mutual respect both companies have for each other. We’ve been working with them for such a long time. For Zegna, Canada is a relatively small market. They have confidence in us and they know that we will run a Zegna store that will look and feel in every respect like a Zegna store and you’ll never know it’s different from any other around the world. We’ve operated the Zegna store in Vancouver for a long time and we’re just renovating it. So we’ll have two brand-new ones in the Peter Marino design, both major flagships, one here in Toronto and one in Vancouver. For them to come in and set up their own two stores doesn’t make sense. They’re our largest supplier so it made sense for us to work together.
WWD: And why did you decide to acquire Davids?
L.R.: I think it’s very exciting to take a great family business like that and see what synergies we can create. We will work with Richard Markowitz [grandson of the founders who is staying on board] to develop new ideas and strategies. I think the positioning they can occupy in this marketplace in women’s footwear and accessories is very similar to the dominance that Harry Rosen has. They have great competitors in the women’s department stores: Saks, Nordstrom, Holt Renfrew all do women’s shoes and handbags extremely well so they have to offer something that’s better: better curation of the great brands out there and an experience in-store and online. We’re here to provide a very modern, enlightened service to women who are looking for great footwear and bags.
WWD: How many stores do they have?
L.R.: They have four — they’re going to have five this fall but we see as many as 15 to 20. They’re also online but it’s very undeveloped and we’re moving them onto our platform and we think there’s a great opportunity there. Shoes are the most important category for most companies online and for us, it’s huge.
WWD: Any other expansion planned for Harry Rosen?
L.R.: Nothing I can disclose. We have several areas that we’re targeting for larger stores or possibly new stores, but I don’t disclose deals until they’re finalized.
WWD: What advice would you give other retailers?
L.R.: The best advice I can give any retailer is understand keenly why customers choose you and what you bring to the table that improves their lives. Make sure you do that consistently and with excellence.
WWD: Which other retailers do you think do a good job, either independents or big stores?
L.R.: I greatly admire the Mitchells. The Boyds people have done a great job in Philadelphia and I like Bergdorf Goodman’s men’s — I think it’s a well-conceptualized store from a fashion point of view. I like their commitment to luxury. Kudos to the Neiman Marcus organization that they can run a business within their company and still give it a distinct personality because that’s not an easy thing to do. I was just in the new Marios in Seattle and that’s a great, great retailer. I think Stanley Korshak does a great job. All those places bring personality to the retail experience.