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US Retailers Hit Homeruns in Canada

June 13, 2012

I recently read a fascinating piece (on Reuters.com) about the Canadian retail climate. This article provided insightful data as to why US retailers enjoy greater productivity in Canada than in the US. The feature also highlighted key socio-economic factors which are important considerations in assessing why the US retailers are more successful north of the border. To paraphrase the article, the key determinants are as follows:

1. Canada's banking sector is amongst the soundest in the world

2. Canada has a buoyant housing market and consumer spending robust

3. Canadian Shopping malls are 43% more productive than their US counterparts;

4. Top malls in Canada generate $1000-$1300 per sf compared to premium US malls which report sales of $650-$850 psf

5. According to the ICSC, Canadian shopping malls on average perform $589 per sf, compared to $412 per sf in the United States 

6. The higher productivity is result of Canada having fewer malls per capita than the US (15 square feet of space vs 24 feet)

7. US retailers charge higher prices for goods and commensurately enjoy higher profit margins

Our clients have experienced tremendous success in Canada. The majority boast 20-25% sales increase in Canadian locations. Commensurately, these retailers have significantly increased (in many cases doubled) their forecasted store openings for Canada.

It's the classic if you build it he will come theory. And to Canada, the brands keep coming. 

J Crew, Microsoft, Vans, Watch Station, Ann Taylor, Express, Chicos, Under Armour, Ultra, Kohls, Marshalls...etc. These names represent a partial listing, of those US retailers, who have (either) recently opened in Canada or have announced their market entry. 
Who's next? That's simple. 

Target. You may have heard that they acquired 185 leases from (Canadian department store chain) Zellers and will open these locations in 2013. In addition they will invest $10M to re-furbish each location. Not too shabby. 

Are there other major retail brands looking to enter Canada? The answer is a definitive yes. 
Cadillac Fairview (CF), Canada's leading super regional mall landlord, just acquired leases from Sears Canada in three of their top performing malls: Pacific Centre (Vancouver), Rideau Centre (Ottawa), and Chinook Centre (Calgary). CF has exciting plans to re-develop these properties, and it is widely expected that Nordstrom will be the anchor in these sites.  

What else do I need to know? 

For retailers seeking outlet growth, with no less than 7 new outlet centres announced to open in 2013\2014, Canada is quickly becoming the hot-bed for outlet retail. In total, approximately 2.9 million square feet of outlet retail will be built during this period. Simon is set to launch Premium Outlets in Toronto and Montreal; Tanger will open a new centre in Ottawa, and expanding existing malls in Cookstown, Ontario and Bromont, Quebec; Ivanhoe will open the Niagara Outlet Collection in Niagara, Tewassan Mills in Tewassan, British Columbia.They will also expand their very successful Vaughan Mills centre. Finally (but certainly not least), in 2014, UK based McArthur Glen, will unveil their upscale Vancouver Designer Outlet. 

In addition to the above, there are several top tier super regional malls that have announced major re-development programs. These would include: Pacific Centre (British Columbia), Chinook Centre (Alberta), Polo Park (Manitoba), Rideau Centre (Ontario), Bayshore Shopping Centre (Ontario),Guilford Centre (British Columbia), Park Royal (British Columbia), Pacific Centre (British Columbia), CHinook Centre (Alberta), Polo Park (Manitoba), Rideau Centre (Ontario), Bayshore Shopping Centre (Ontario), Promenades Saint Bruno (Quebec). 

Given the plethora of tremendous first class projects soon opening, now is the time for those US and international retailers to escalate and finalize their discussions regarding Canada. It's time to GREEN LIGHT CANADA! 

From a financial perspective alone, landlords now have capital budgets for tenant inducements and greater flexibility to invest same in high performing top covenant brands. This is a unique time - Canada is now hungry for US and internationally branded retailers.

I am attaching a couple of articles that I believe are topical.

1. Canada's Retail Market Ripe for American Invasion - The Star.com

2. Outlet Retailing Canada-Style - Value Retail News

Think Retail has successfully developed and implemented Canadian market entry programs for companies such as Fossil, American Apparel, Pinkberry, Bare Escentuals, Le Creuset, Watch Station, JNBY...etc. We secure flagship locations in all major Canadian cities on behalf of a wide variety of best in class globally recognized brands and top domestic regional chains. We are value added and leave no stone un-turned to ensure that our client's real estate objectives are quickly achieved.   

Yellow Retains Think Retail

May 08, 2012

We are thrilled to announce that Think Retail has been retained by Montreal based, footwear and accessories powerhouse, Yellow Group Inc., as their exclusive Canadian real estate broker, responsible for store growth strategy, site selection and lease negotiation.

Founded in 1916, Yellow Group Inc. has grown to over 100 store locations in the provinces of Quebec, Ontario and New Brunswick. The stores operate under the Yellow, Cité, and Fournier banners.

Yellow is prepared for further growth and have plans to open as many as 10 new stores this year. They will consider locations throughout provinces of Quebec, Ontario and New Brunswick and have a particular and immediate interest in the Hull and Ottawa regions. The size requirement for Yellow is 3000-7000 square feet in strip centre, power centre, enclosed mall, or pad site formats.  Both Cité and Fournier will consider enclosed mall locations in the 1200-2500 square foot range.

For more information on Yellow Shoes, please visit their website at www.yellowshoes.com.

For additional information and leasing opportunities, please contact Michael Stroll at (514) 731-7936.

Think Retail Testimonials: Hear What Our Clients Have to Say

May 05, 2012

I love what I do. But finding the perfect location for someone’s company can be hard work. It requires that we work side by side with our clients, to find the best place for their business. By understanding someone’s business and philosophies, it makes it easier for me to find them the perfect space, one that will produce top line sales and profits and will benefit from high visibility. And this process, though it can be long and strenuous, really brings people together. It makes my clients more than just clients, but members of the Think Retail family. And nothing makes me happier than when a member of our family is happy with what we did. Therefore, I’m pleased to bring you three new testimonials from more satisfied clients.

We helped Bob Higgins, the VP of New Store Development for Fossil, launch his brand in Canada and were met with great success. Thanks to our strategic location selection (now over twenty stores in Canada) he states, “our stores have exceeded our initial expectations and continue perform.” I’m really thrilled with the work we have done for Fossil. It’s an honor to be partners with a global brand like them and were tremendously gratified when they selected our company to develop and implement their Canadian market entry.

Joey Labrecque is the owner and founder of fashion accessorie boutique Hot Fudge, and he’s a great guy. I first met him some twelve years ago while working for his father’s retail chain Bizou and was thrilled when he came to me about Hot Fudge. When he first approached me Hot Fudge had no retail stores and there was no company track record in what was already a highly competitive field; furthermore, landlords aren’t known for being big risk takers. He wanted to open eight stores in all of Quebec’s top super regional malls (also the most highly coveted) in four years. Very ambitious plans for a young start-up company.

Notwithstanding, I’m pleased to say that with our help he’ll be doing it in two. Our expertise, advice and passion have helped Hot Fudge establish key strategic locations in a very short time, and they remain very pleased and grateful. Joey stated that “what was once a dream has now become our daily reality.” I consider it a privilege to work with small businesses and I am honoured to continue working with Joey and everyone at Hot Fudge.

Now for the sweetest one in the bunch: Pinkberry. They have amazing frozen yogurt, with endless options for toppings. A couple years ago, the nearest Pinkberry location was in the States (so far!) but that gave me the chance to meet and work with Ken Thicke, the area franchisor for Pinkberry. Much like Bob Higgins at Fossil, he was bringing a US company to Canada for the first time. This was an especially tough job though, taking me to Vancouver and Los Angeles for a franchisor conference (not that I’m complaining). I worked very closely with Ken to find the best locations in the market, as well as to ensure that he received the most beneficial financial opportunities possible. Thanks to tireless work on all sides, Pinkberry has two BC locations, with two more scheduled to open (four out of their five top targets). They will also be making their Alberta debut this summer, at West Edmonton Mall, the country’s largest shopping centre and their top target in Alberta. My favourite part was probably the launch party, where Pinkberry served free fro-yo to all the guests (over 4,500!) and VIPs included Vancouver’s own Cory Monteith, from the monster TV show Glee. It was a great experience and I’m so happy to have been a part of it.

To see everything that these happy customers had to say, take a look at the Testimonials page. You won’t be disappointed.

Fossil's Stock Continues to Soar

May 04, 2012

I saw an interesting article last week in WWD. The piece was titled Economic Anxiety Hits Stocks. The feature was like many others that we have grown familiar to reading about. Hard times at home causes a tightening of the belt and purse strings and expenditures are subsequently reduced. What caught my eye in this piece was the chart titled 'Still Way Ahead'. The chart listed in order, those global fashion retailers who have bucked the trend and have seen their stocks flourish. In our business, two of the strongest performance indicators are comp sales and stock activiity. I have attached the chart hereto and am pleased to point out that Fossil Inc ranks #4 on the list. At closing yesterday, Fossil Inc's stock price was $136.36, an increase in excess of 70% since the beginning of the year. It's also worth noting that the price of Fossil's stock is double that of any other brand featured in the chart (which includes Lululemon, Kenneth Cole, Michael Kors, Prada, Gap...etc). I can't say that I am surprised. After all, Fossil is the only global fashion brand to have reported double digit comp store increases for 8 consecutive quarters. Outstanding. Further with each new earnings release, the company continues to reach record levels in Net Sales and Gross Profits.  

There is a 3rd major performance indicator that people in the shopping industry are quick to look at - sales per square foot. In Canada, Fossil continues to be an uber performer, with median sales in excess of $1000 psf.  

Fossil operate approximately 20 stores in Canada, and are prepared to expand, in the following targeted markets: Calgary, Vancouver, Toronto and Montreal. Size required:1200-1500 sq.ft. Property-Type: Super regional centres, Downtown street-front, and lifestyle centres. In addition, the company is actively seeking outlet opportunities in all of the above-noted cities. 
Opening Soon - Mapleview Mall (Burlington, Ontario) and Halifax Shopping Centre (Halifax, Nova Scotia).  

We're just dotting the i's and crossing the t's on several new major Fossil deals. Stay tuned for more details.

FYI - Fossil plan will open 75 stores globally in 2012. 

For additional information on Fossil, please visit their website at www.fossil.com.

Their Success is Our Success: New Think Retail Case Studies

May 03, 2012

Here at Think Retail we love success stories. It means we’ve done a good job of helping our clients find the best locations for their businesses. Sometimes this is easier said than done, but in the end if the client’s happy, I’m happy.

In this regard, I am pleased to share with you two new case studies that detail the work done for both Pinkberry and Hot Fudge.

In the case of Pinkberry, our task was to bring the frozen yogurt giant into Canada and to secure their primary real estate targets. Although the brand is megapopular in the States it wasn't as well known here in the North. We had to work hard to educate prospective landlords and to find a way for Pinkberry to stand out from it's fro-yo and ice cream competitors. I even went to a franchisor conference in Los Angeles to learn as much about the industry as possible. We then met with top landlords and leasing senior leasing executives from Cadilac Fairview, Ivanhoe Cambridge, and Oxford Properties, and within twelve months of beginning the mandate, we had secured locations in their top three targets in British Columbia. Further, just last week Pinkberry confirmed that they will be opening in West Edmonton Mall, their top target in Alberta and the province's biggest mall. Success!

Hot Fudge was a different matter. Ee had to find retail locations for a new business, without a company track record and without any established retail stores. Further, most landlords in top malls are conservative and are more frequently inclined to transact with established and successful retailers and not young start-ups. We developed a real estate action plan and then secured meetings with top-level executives and national senior leasing directors at Ivanhoe Cambridge, Redcliff Realties, and Cadilac Fairview. We leveraged our contacts and within 2 months of commencing the mandate, we secured Hot Fudge's top target - Place Laurier. Once stores started opening, we sent out photos and gift certificates of the new locations to targeted landlords, and promoted their openings in trade publications throughout the country. Within two years of starting our project, Hot Fudge will have opened in eight locations in all of Quebec's top super regional malls. Again, success!

To read even more about what we did and how we did it check out the Case Studies page. Who knows, maybe your company will be up there next!

Pinkberry to Open in Canada's Largest Mall

April 24, 2012

Alberta, get ready for Swirly Goodness.

With great excitement, we are pleased to announce that Los Angeles based, Pinkberry will open it's first location in Alberta, at Canada's largest shopping centre, West Edmonton Mall (WEM). The premises will be 475 sq.ft and will be strategically situated on Level 1, on a corner, fronting the food court and facing Deep Sea Adventure Lake. The store is scheduled to open in mid-July. We'll be sure to post photos once the store opens.

Pinkberry is seeking to expand in Alberta and British Columbia. Super regional shopping centres, lifestyle centres, and downtown high streets will all be considered. Size required is 300-1250 sq.ft. or kiosk format - 250 sq.ft.

I want to thank Triple 5's, Faran Maleki and Don Ghermezian for their help in completing this transaction. Actually both should probably receive an award. Faran, did a great job. She showed tremendous passion in her desire to bring Pinkberry to West Edmonton Mall. Further, she kept all parties focused on the prize, throughout our long negotiations, even at those times when it seemed like an agreement would never be reached. As for Don, he could have many times thrown this deal away and opted to proceed with one of the many Pinkberry wannabes who were prepared to pay substantially higher rent. Don has tremendous vision and works tirelessly to bring best in class retailers to his centre. I am sure that he and I would agree that the Pinkberry is the perfect fit for his amazing shopping centre.

A little info on Pinkberry – Pinkkerry reinvented the frozen yogurt category when it launched in Los Angeles in January 2005. Today it is the most talked about, best tasting, premium frozen yogurt and is made with high-quality fresh ingredients. From store design to exceptional customer service to flavors and toppings, Pinkberry offers an incredible all-encompassing experience.There are currently 170 locations worldwide with that number expected to double in the next 12 months.

About West Edmonton Mall - Owned by Triple 5, the mall is 5.2 million square feet and is Canada's largest shopping centre. The property is visited annually by approximately 30.8 million people (#2 in Canada in terms of annual traffic), and ranks as the province  of Alberta's top tourist attraction. The shopping centre has approximately 800 stores, and features the World Waterpark, Ice Palace skating rink, Galaxyland - the world's largest indoor amusement park, Fantasyland Hotel. Further, the mall is home to many of today's top retail brands such as Apple, F21, Lululemon, Aritzia, H&M, Zara, AX Armani Exchange, Anthropologie...etc. With respect to performance, and sales of $700 psf, the centre is a juggernaugt that breeds top performing stores. A full renovation of the mall began in September 11; completion is scheduled for 1st Q 2013.

For more information on Pinkberry, please visit their website at www.pinkberrycanada.com.