International retailers enter Canada at a rapid paceJanuary 15, 2020
According to research by Retail Insider, more than 50 international brands entered the Canadian market in 2017 by opening stores, and in 2018, more than 30 planted their flag in this country. The momentum is ongoing and the number of international retailers entering Canada in 2019 has surpassed that of the year before.
Shopping centres play a key role in international retailer expansions, with brokers and landlords partnering to bring the latest concepts to Canada. Toronto’s Yorkdale Shopping Centre is the launch point for more international retailers entering Canada than any other place in the country, ranging from innovative concepts such as Dyson and KitKat to luxury brands such as Valentino, Balenciaga and Bottega Veneta.
In many cases, international retailers have aggressive growth plans for Canada which is adding competition to homegrown chains. Men’s fashion brand UNTUCKit, which opened its first Canadian store in 2018, has already opened five Canadian stores in less than a year, with more to come. Disruptors such as French sporting goods retailer Decathlon are choosing shopping centres for some of its Canadian locations as it heats up competition in the sports category. Beauty retailers such as Korean brand Innisfree will continue to rapidly open stores in Canada into 2020. And, there are many other examples.
International retailers are coming from far and wide, particularly from the United States, Europe, and Asia. L.L. Bean has opened its first Canadian store in a shopping centre in Oakville, Ontario, and is planning to open about 20 stores nationwide over the next decade. Asian brands such as Uniqlo and Muji have expanded into the Canadian market and are negotiating more locations in major shopping centres. European retailers such as Amsterdam-based HEMA are about to make inroads into the Canadian market, not to mention a roster of luxury brands opening stores particularly in the Toronto and Vancouver markets.
One notable trend is when international brands enter Canada, they often open direct-to-consumer brick-and-mortar stores as well as dedicated eCommerce websites. In some instances, the multi-brand retailers that have carried these brands could risk losing them. As the brands themselves go direct-to-consumer, they are competing with the multi-brand retailers that may have initially introduced them to local consumers.
Luxury brands continue to target Canada
International luxury brands continue to target Canada by opening new stores. At a time when Canadian households have record-high debt levels, spending in luxury stores remains strong in several major centres. Canada is home to a substantially high number of high-net-worth individuals who are increasingly shopping in Canada as brands establish a presence here at a time when the Canadian dollar is low. The country has also seen rapid growth in international students, some of which have substantial allowances that luxury brands are targeting.
Toronto and Vancouver are the primary target cities for luxury brands in Canada currently, with Montreal, Calgary and Edmonton also seeing increased activity.
In Toronto, luxury brands have opened stores in the city’s Bloor-Yorkville area, which is home to numerous standalone luxury flagship stores as well as the flagship location for multi-brand luxury store Holt Renfrew. Recent flagship additions to
Yorkville Avenue include Brunello Cucinelli and Versace, which joined Chanel and Christian Louboutin on the street which will see several more luxury brand stores added in 2020 and 2021. Bloor Street West, which has been dubbed the ‘Mink Mile’, saw US-based luxury brand St. John Knits open a flagship store next to Gucci—the stretch of Bloor Street between Avenue Road and Yonge Street is home to several luxury brand flagships. Italian grocerant concept Eataly opened at the Manulife Centre in November of 2019, increasing footfall to the area. Further, the Holt Renfrew flagship’s renovation will be completed by the spring of 2020 and will include a new facade for the first time in 40 years, as well as new luxury boutiques contained within.
Toronto’s Yorkdale Shopping Centre, which ranked top again as Canada’s most productive shopping centre in terms of annual sales per square foot in Retail Council of Canada’s 2019 Canadian Shopping Centre Study, also features the largest clustering of luxury brands of any location in Canada. Recent additions include Valentino, Bottega and Balenciaga, joining a highly productive Holt Renfrew store as well as more than two dozen other luxury brand boutiques. More luxury brands will open at Yorkdale in 2020 as the centre finds its place as one of the most prominent clustering of luxury stores anywhere in North America.
Downtown Vancouver’s Alberni Street ‘Luxury Zone’ has seen numerous luxury brands open stores over the past five years, with some boutiques said to be seeing astronomically high sales. The 1,000 block of Alberni Street transformed in a relatively short period of time to become a clustering of luxury boutiques that include a strong focus on jewellery and watches. Vancouver’s Holt Renfrew store is also highly productive and includes nearly 100 luxury brand concessions across its 190,000 square feet.
Calgary and Edmonton have also seen growth in luxury retail. In Calgary, Louis Vuitton relocated from a concession space at Holt Renfrew in the city’s downtown core to CF Chinook Centre in October of 2018. It joined brands including Tiffany & Co., Burberry and Canada Goose in the busy shopping centre. West Edmonton Mall, which is North America’s largest shopping centre, added a Louis Vuitton store in the summer of 2019 along with Canada Goose and a new Rolex boutique. A Gucci boutique will join the mix in 2020, joining leading brands such as Tiffany & Co. and Coach.
Looking to the future, Canada is expecting even more luxury brand nodes as shopping centre developers target top brands to overhauled and newly built centres. In Vancouver, landlord QuadReal is redeveloping the Oakridge Shopping Centre which will include a luxury retail wing that will be part of a massive mixed-use project. Landlord SHAPE, in partnership with L Catterton, is developing ‘The Amazing Brentwood’ in Burnaby which is also targeting luxury brands. In Montreal, L Catterton partnered with developer Carbonleo to create the new ‘Royalmount’ project. The massive mixed-use Royalmount development will include a luxury retail wing with several brands either confirmed or in advanced discussions, and they could be joined by an upscale international department store chain which is said to be looking at entering the Canadian market as well.
BY CRAIG PATTERSON