With a pair of announcements in January, Toronto’s Eaton Centre has signalled its intention to shift the balance of power in the city’s swankiest retail destination, Yorkville, with a grab for the top end of the market.
Cadillac Fairview, the mall’s owner, has pulled off a double coup. First, it unveiled Nordstrom as a replacement for the struggling Sears, which is closing its three-floor store as part of the retailer’s retreat from major urban malls. Then, just days later, it unveiled a $650 million deal to buy and lease back Hudson’s Bay’s flagship Queen Street store. HBC, the Bay’s parent company, will continue to lease the space for at least 25 years, but the purchase represents a major expansion of the Eaton Centre’s footprint. Of far more interest to shoppers, however, was the news that U.S. luxury brand Saks, which was bought by HBC last July, would be taking over part of the space in the Bay’s current store.
The 150,000-square-foot Saks is expected to open in fall 2015, with Nordstrom to follow a year later.
HBC is also planning to open a second Saks store in Sherway Gardens in the city’s west end.
The moves have been widely seen as transformative for the Eaton Centre, which says it has already invested $120 million in renovations and upgrades and has plans to spend $400 million more, but it has also caused speculation that it could redraw Toronto’s retail map and pull more high-end shoppers downtown.
The ritzy Bloor-Yorkville neighbourhood is one potential loser if the Eaton Centre succeeds in grabbing a bigger slice of the high-end pie.
The manner in which news of the new Saks store emerged did little to dissuade comparisons between the two areas: in November last year, HBC let it be known that it was mulling turning its existing store at Yonge Street and Bloor Street into a Saks, before ditching that idea in favour of the Eaton Centre deal.
But three years after finishing improvements to the streetscape on Bloor, the Mink Mile continues to live up to its reputation as Canada’s premier shopping street and still commands the highest per-square-foot rents in the country.
In a clear sign of confidence in the area, Holt Renfrew has announced plans to expand its presence on Bloor.
The luxury retailer, long the street’s linchpin, plans to renovate it existing store and open a stand-alone menswear store at 100 Bloor St., in a space currently occupied by Roots, in the fall. (Roots says it will shift a few doors west and open a smaller location at 80 Bloor St. in May.) Although Saks opening in the Bay at Yonge and Bloor would have shifted the street’s centre of gravity eastward, the move by Holts will see it swing toward the west.
Donna Smith, a professor at Ryerson University’s Ted Rogers School of Retail Management, believes the new Eaton Centre arrivals will give Toronto’s existing retailers a run for their money. Particularly familiar with Nordstrom’s way of doing business, Smith cited the company’s customer service ethic as one of its major strengths as it unrolls plans to open at least six stores in Canada in the near future.
“Everybody talks about Nordstrom’s customer service, and I think the reason they talk about it is because it is very authentic. Right now Nordstrom is interviewing people for Calgary, and they are going to send them to Seattle for about three months of training,” she said.
Though Nordstrom caters to a broader market than a lot of the retailers in Bloor-Yorkville, Saks will be a direct competitor for many of the stores and some of the food outlets, too.
It appears that HBC has greater plans for Saks than being a simple store-within-a-store, with CEO Richard Baker recently telling the Toronto Star that it wants to include an upscale food court comparable to that seen in London’s renowned Harrods department store.
According to Smith, how well existing areas like Bloor-Yorkville will cope with the new competition will depend on their ability to attract both unique brands and amenities like restaurants and coffee shops that allow shoppers to make a day of it.
Highlighting stores such as Prada and Chanel that are not downtown, Smith said, “I think Bloor-Yorkville has to continue to attract unique high-end brand retailers in order to give shoppers a reason to shop there.
“Like the Eaton Centre, Bloor-Yorkville is also a tourist attraction, and people go there to have lunch and dinner.”
In this regard, the Bloor-Yorkville neighbourhood has some particular strengths.
Though these days the TIFF spotlight may have shifted downtown, Yorkville is still a go-to destination for the rich and famous, who stay at its hotels, eat in its restaurants and beautify themselves in its 130-plus salons and spas. They lend the area a cachet and aura of exclusivity that is difficult to replicate.
The unique feel of the neighbourhood, combining a boulevard-like shopping street with a villagelike setting for restaurants, bars and cafés, is also a major draw. And though its retailers can be forgiven for occasionally grumbling about the weather keeping customers away, particularly during bitterly cold winters like the present one, ultimately it’s a point of difference that the area makes the most of with its annual ice sculpture festival.
“It distinguishes itself from being an internal shopping centre where one store looks the same as another store, one mall starts to look the same as another,” said Briar de Lange, executive director of the Bloor-Yorkville BIA.
“Here you do have that unique distinction of being on a very high-end downtown street.”
The battle lines have been drawn. Let the fight for the high-end handbags begin.
