With an opening scheduled for March 17, work continues at the Quebec-based retail chain Simons store at Square One in Mississauga, Ont. on Feb 24 2016. This is the Quebec City based company's first foray into the Ontario market.Fred Lum/The Globe and Mail
Peter Simons of his family's eponymous fashion chain is touring his latest, still-unfinished Simons store when he stops at a surrealistic-looking sculpture at the top of the escalator in the two-storey outlet.
The 3.2-metre sculpture, by Canadian artist Brendan Tang and visible throughout the store, is typical of how Mr. Simons tries to make each of his stores distinctive with their own architectural and artistic touches. Now the chief executive officer of La Maison Simons is betting that in a crowded fashion market, in which Simons isn't as familiar a name as in its home province of Quebec, its distinctiveness will help it become a shopping destination.
On Wednesday, Mr. Simons, 51 and a towering 6 foot 5 inches, was showing off the Square One Shopping Centre store in Mississauga, as it prepares to open on March 17. The chain's third outlet outside Quebec, its first in Ontario and 12th over all, the store launches at a time when a rash of other apparel retailers have failed and new ones are about to arrive, including the fast-growing discount arms of chi-chi Saks Fifth Avenue and Seattle-based Nordstrom Inc., which are already expanding in Canada.
Even so, industry insiders and advisers are virtually unanimous in praising Simons as a shopper-friendly retailer that has a knack for carrying compelling styles. "They're wonderful," said Randy Harris, president of apparel market researcher Trendex North America in Toledo, Ohio.
Simons has the advantage of carrying both luxury goods as well as more affordable items (although not at rock-bottom prices). About 25 per cent of its sales are upscale, Mr. Simons said, while 50 per cent are mid-priced and 25 per cent are more accessible. Clothing prices range from $7.99 for a stretchy organic cotton cami top with spaghetti straps to $3,000 for a Paul Smith men's wool suit. Private-label merchandise, which can generate higher profit margins, makes up more than 30 per cent of its estimated $400-million of annual sales, he said.
But Simons needs to spread the word about itself to non-Quebeckers, many of whom aren't familiar with its name and offerings, he acknowledged. And it needs to win customers amid an uncertain economy, a slump in Alberta – where it has a store in the West Edmonton Mall – and a forecast of slowing apparel sales growth.
Canada's apparel sales grew by 3.8 per cent in 2015 to an estimated $30.6-billion, but will only pick up by 2.4 per cent in 2016 and 1.7 per cent the following year, Mr. Harris predicts.
But Simons and other expanding retailers in Canada, such as the tony Nordstrom and Saks, play a critical role for mall landlords. Developers are counting on the new players to bolster their businesses at a time when fewer shoppers are heading to physical stores and more are shopping online.
Major landlords are investing billions of dollars in upgrading their malls to give consumers a reason to shop there. "This is about us competing for the greatest share of the household wallet," said Michael Turner, a senior vice-president at Oxford Properties Group, which owns Square One and Yorkdale Shopping Centre, among others.
Oxford has invested $650-million in its malls in the past five years and currently is pouring another $1.2-billlion inti other projects, including expanding Square One and Yorkdale.
Cadillac Fairview Corp. is also focusing on its best mall assets, where it can attract top-performing retailers and gain the most shopper traffic in a digital age, said Russell Goin, executive vice-president of operations at Cadillac Fairview. It invested about $3-billion in malls such as the Toronto Eaton Centre, which has the first Saks store, over the past several years, and has budgeted another $1.5-billion, he said. "We're not looking to have the largest number of assets. We just want the best assets."
Simons fits into that category, he said. Already in three of Cadillac Fairview's Quebec malls, Simons will open in its Rideau Centre in Ottawa in August. And in locations such as Square One, Simons is replacing the struggling Sears Canada, which has closed stores after selling leases back to Cadillac and Oxford, making way for the new players.
Privately-held Simons has plans for six more outlets in the coming years and, eventually, as many as 20 or 25 stores and $600-million in annual sales, Mr. Simons said. E-commerce makes up about 10 per cent of its sales today. "There is a physical limit in today's world to how many stores we could ever have."
The Square One store has other unusual touches, such as red porta-potty-style fitting rooms in the young men's section, which is a feature of the Edmonton store as well. While that location, its first store outside Quebec, enjoyed healthy growth, the gains are now softening, owing to the effects of the declining oil sector, he said.
Its new Vancouver store is beating its targets, although "the numbers are telling us that a lot of people don't know who we are. We're trying to explain that and just communicate that more clearly. … Our job is to get people to come in and discover us."
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Simons's store network
Quebec
Old Quebec
Promenades Gatineau
Galeries d'Anjou
Place Sainte-Foy
Galeries de la Capitale
Carrefour Laval
Montreal Centre-ville
Promenades St-Bruno
Carrefour de l'Estrie, Sherbrooke
Ontario
Square One, Mississauga (March 17, 2016)
Rideau Centre, Ottawa (August, 2016)
Alberta
West Edmonton Mall
Londonderry, Edmonton (2017)
The Core, Calgary (2017)
B.C.
Park Royal South, West Vancouver
Source: Simons