IT’S A WINNER TAKES ALL GAME
In Luxury retail “IT’S A WINNER TAKES ALL GAME”
After living in Manhattan for the past three years I have not had a chance in some time to go to Toronto’s Yorkdale Mall. So yesterday I went into Toronto to see the development of the luxury wing. I needed to see for myself what has been going on after reading the expansion news in Retail Insider.
Walking thru Yorkdale, Canada’s top location for luxury retail, I could not help thinking back to a statement said to me two years ago while meeting an industry college in NYC, “It’s a Winner Takes All Game” This is on full display at Yorkdale Mall. The luxury business has now become so big that the mega brands owned by big groups are playing a real-estate game and gobbling up massive metres of store front facade. Yorkdale Mall is a prime example of this.
In the days when I oversaw Dior Couture Canada, I expanded the retail footprint in Holt Renfrew Yorkdale from 55sqm to 350sqm. A nice 6x growth in space. At that time, I also opened the largest North American store in downtown Toronto at 1235sqm. Walking the mall yesterday I saw a 44 meter (145 feet) long hoarding for Dior’s second Dior location inside Yorkdale. According to Retail Insider the boutique will be almost 1000sqm and “will appear even larger thanks to the addition of an adjacent (117sqm) 1,270-square-foot Parfums Christian Dior boutique, which will add another 25 feet of frontage dedicated to its renowned fragrance line.”
Is this to keep up with Louis Vuitton, who in 2020 opened a second Yorkdale location spanning approximately 750sqm at a major intersection positioning in the mall?
Saint Laurent is also under expansion now and will open a flagship location spanning 1000sqm. In the quest to the top, the strategy to continually increase the retail foot print every few years squeezes out the poor performers. The brands jostling for more space is clearly a high stakes game and is on full display in Toronto Canada.
Chanel who has decided to stay within the walls of Holts is under an important two storey expansion. Again, according to Retail Insider, an incredible fact: this will be the largest concession store for Chanel Globally! A strong statement for Holt Renfrew, Canada’s only truly luxury department store. If you remember Nordstrom’s exited Canada in 2023 and Saks Fifth Avenue cannot seem to find its way in this market despite being owned by the iconic Canadian Hudson Bay Company. Bravo to Holt Renfrew for knowing what Canadian luxury shoppers want and expect in luxury retail to secure this achievement with Chanel.
These mega stores in Canada’s number one mall make the previous impressive facades of brands which have opened in Yorkdale over the past three years look tiny in comparison. It truly is a winner takes all mentality from groups with deep pockets. Luxury in this instance is not quiet luxury or for the few elite clients who have managed to break through financial glass ceilings to have luxury products as part of their everyday experience.
How do the premium or mass market brands, often with a lack of product innovation and poor staffing levels, keep up with their retail expansion when luxury brands demand and get the large footprint location?
With a growth imperative, the question is: When is big enough big enough? The process of becoming a mega brand does not stop. Do not get me wrong, running a project to get a store the size of Chanel’s open, train the legions of inexperienced staff, merchandise the entire space with unique and curated product and launch it, is a very exiting process and one that I love doing.
But with a weakened Canadian dollar, due to threatened tariffs from the US, and reduced consumer purchasing power, is there enough superfluous cash in Toronto to drive the sales needed for strict profit targets?
Time will tell, but till then Yorkdale mall in Toronto remains an outstanding location for any global brand wanting to enter the North American market, if you can get a space!
