Facing heightened competition from savvy U.S. players, luxury fashion chain Holt Renfrew & Co. Ltd. plans to expand on Toronto's prominent Bloor Street West shopping strip by launching a standalone men's wear store close to its flagship location.
Holt Renfrew is close to sealing a deal for leases at two Bloor Street shops currently occupied by fashion retailer Roots and beauty purveyor Body Shop – and next to the flagship of upscale men's clothier Harry Rosen, industry sources said.
Holts's move on Canada's priciest shopping strip helps reinforce Bloor Street West as the country's centre of luxury retailing at a time when Hudson's Bay Co.'s upscale Saks Fifth Avenue and Nordstrom Inc. are set to launch their stores in Canada in the coming years.
As the dominant luxury fashion retailer today, Holts is betting that expanding its retail footprint on Bloor Street will help stop customers from shopping at the new rivals. Holts's executives would not comment on Wednesday, although spokeswoman Moira Wright said the chain will keep its men's wear offerings in its main store on Bloor Street.
New York-based Saks, which was acquired late last year by Hudson's Bay, had planned to put its first store in Canada at Bloor and Yonge Streets, where its Hudson's Bay outlet is now located – and close to Holts's flagship.but last week Hudson's Bay chief executive officer Richard Baker revealed he would roll out Saks's first store here further south in Toronto, at the Hudson's Bay building at Queen and Yonge streets as part of the Eaton Centre. (Hudson's Bay also said it is selling the building, including the connecting office tower, to landlord Cadillac Fairview for $650-million.)
But Holts still plans to go ahead with a standalone luxury men's shop on Bloor Street, sources said. "Holt Renfrew would have been interested in it with or without Saks' imminent arrival," predicted Arlin Markowitz, associate vice-president at Cushman & Wakefield, which represents the landlord in the Holts leasing deal.
Holts's initiative to launch a separate men's store on Bloor Street will "shift the centre of gravity" on the shopping strip westward rather than eastward, as might have happened if Saks had set up shop at Yonge, Mr. Markowitz said. (Roots is looking for an alternative site on Bloor, he said.)
According to Cushman's data, retailers pay a net asking rent on the prime Bloor Street shopping block of about $320 per square foot, which is much higher than at the Eaton Centre, where the net asking rent is roughly $150 to $175 per square foot on average (although net rent doesn't include taxes and maintenance fees.)
Holts' is trying to profit from a rising demand for men's fashions. Larry Rosen, CEO of Harry Rosen, said he welcomed the added competition from Holts on Bloor Street. "We see their move as a great upgrade on Bloor Street," Mr. Rosen said. "Any improvement on Bloor Street improves the area and improves the traffic."