Busy Week On The Retail Front
Two big announcements on the local retail front over the past few days—the confirmation that Loblaws will be opening a 20k SF store at College and Spadina, and the $650M sale-leaseback transaction involving the Hudson’s Bay store at Eaton Centre. (So get the credit cards warmed up, shoppers.)
In the HBC transaction, Cadillac Fairview purchased both the Hudson’s Bay Queen Street store and Simpson’s Tower. HBC and its subsidiary Saks Fifth Avenue plans to open a full-line Saks store at Queen and Yonge, not on Bloor Street, as had been originally reported. The 150k SF multi-level Saks store will co-locate with the Bay store and open in fall 2015, creating a luxury competitor to the new Nordstrom that’s going into the Eaton Centre where Sears used to be. (Does this mean we have to start dressing nicer?) HBC leased the entire retail and office complex back for a base term of 25 years. Proceeds of the transaction will be used to reduce the company’s debt and invest in growth initiatives.
“Holt Renfrew better up its game,” DIG360 Consulting retail analyst David Ian Gray says. “I was not surprised at the deal with Cadillac Fairview. It’s probably part of a bigger play for Saks locations across Canada [Sherway Gardens being one]. HBC has lots of real estate and still has a great asset base.” David adds the announcement that Saks will open on Queen was a surprise, like many others thinking it would replace the “underwhelming” Bay store at Yonge and Bloor. As David says, the next few years will be fun to watch as Saks and Nordstrom roll through urban Canada.
Yesterday’s Loblaws announcement is a confirmation of what had been reported previously. A proposed Walmart development on Bathurst near College, and now this Loblaws development—20k SF at the base of a new condo tower—is seen by some as another threat to the economic vitality of Kensington Market. Even though the store is much smaller than other Loblaws locations in the core—the store on Carlton, at Church, is 85k SF, for example—Friends of Kensington Market have been vocal in their opposition to it, as they have been against RioCan’s proposed Walmart projecton Bathurst. The new Loblaws store is scheduled to open in 2016.