When Hudson’s Bay revealed it was liquidating almost the entirety of its empire, some thought the selloff would be an opportunity for two of Canada’s last standing department stores: La Maison Simons and Holt Renfrew.
Because their size and product mix resemble the Bay’s at first glance, the rivals might have seemed like the most logical fit for the millions of square feet the Bay and its sister businesses Saks Fifth Avenue and Saks Off 5th will leave behind, but neither appears to want to take up the ailing retailer’s full mantle.
Holt Renfrew spokesperson Adam Grachnik said in a statement that the luxury retailer was “not considering” making a play for the Bay’s leases but “is committed to helping our colleagues with any opportunities we can provide.”
Simons CEO Bernard Leblanc similarly said his company has “no new announcements planned” but “is always up for a challenge and is carefully analyzing all potential opportunities across Canadian markets.“
“We are not rushing things,” he said in a statement.
“We are patient to find the right opportunity at the right moment, in the right place, and under the right conditions. Ultimately, our goal isn’t necessarily to be the biggest retailer but rather the best in the eyes of our customers.”
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Retail experts say it’s an unsurprising but wise stance for two brands that have preferred to take a slow-and-steady approach to expanding rather than behave like the department store game should be winner takes all.
“Retailers are getting very mindful of the customer still wanting a physical presence but balancing that with not having too much real estate,” said J.C. Williams Group retail strategist Lisa Hutcheson.
If Simons or Holt Renfrew were her clients, she said she wouldn’t encourage them to go after the 74 Bay locations, 13 Saks Off Fifth stores and two Saks Fifth Avenue sites available as Canada’s oldest retailer liquidates all but six of its shops.
Taking over one or two of the sites may be something to consider “down the road” because the locations are in prime shopping districts and may be more affordable to obtain because the Bay is in creditor protection, she said.
However, she warns that Canada “only has so much population to be able to support these bigger footprint stores and they would be a big undertaking, even for Simons or Holt Renfrew.
“There’s still a cost to build these stores out,” Hutcheson said. “Millions goes into them and it’s not even just the rent, but the commitment to fill the store with inventory and staff.”
The plan Simons has to open forthcoming locations in Yorkdale and Eaton Centre malls in Toronto, doors away from two of the last Bay stores, by this winter was years in the making and part of a $75-million expansion.
It will give the retailer, which got its start in 1840 as a dry goods business, a store count of just 19.
Leblanc has said the number is low because it reflects the company’s penchant for slowly maneuvering into markets rather than barreling through with plans to open on every corner.
“It’s a long play for us,” he told The Canadian Press last spring. “We have been and will continue to be patient (because) the intent is not to be the biggest. It’s really to be the best at what we do.”
The modus operandi appears similar at Holt Renfrew, which started as a fur shop in Quebec in 1837.
The business is now known for stocking ritzy designer wares and has just six stores in Canada.
“They decided many, many years ago that they’re not going to bite off more than they can chew,” said Lanita Layton, a luxury and retail consultant who was once a vice-president at Holt Renfrew.
The company’s formula is based around a high standard of customer service and a very specific amount of floor space that allows the retailer to be profitable with the high-end inventory it stocks.
“They don’t want to get into something that they’re not comfortable with and (when you’re) adding on more square footage, with every square foot, you’re adding to your cost,” she said.
She thinks the brand is unlikely to find many of Hudson’s Bay’s stores attractive simply because they occupy spaces that lack the luxury shoppers the retailer targets.
Even Simons will find some of the Bay properties too large, she said.
“I would imagine each of them is hopefully going to take advantage of what’s happening with the Bay and maybe expanding a little on their home and epicure, but it’s not going to need 100,000 square feet,” Layton said.
