News: HBC to acquire Saks in $2.9 Billion Deal

Hudson’s Bay Company confirmed this morning its intention to acquire Saks Incorporated (operated of Saks Fifth Avenue and its OFF 5TH outlets) for $16USD per share, approximately $2.9 billion. Combined HBC will operate 320 stores (179 full line department stores, 72 outlet stores, 69 home stores, and 3 e-commerce sites) under the Hudson’s Bay, Lord & Taylor, and Saks Fifth Avenue banners.

"This exciting portfolio of three iconic brands creates one of North America's premier fashion retailers," said Richard Baker, HBC's Chairman and CEO. "I've had a long connection with Saks over the years, and am thrilled to bring one of the world's most recognized luxury retailers into the HBC family. With the addition of Saks, HBC will offer consumers an unprecedented range of retailing categories and shopping experiences. This acquisition will increase our growth potential both in the U.S. and Canada, generate significant efficiencies of scale, add to our powerful real estate portfolio and deliver substantial value to our shareholders."

Once the deal is finalized, HBC will recognize significant cost savings and growth opportunities both in Canada and the United States. Saks will continued to be based and operated from it’s base in New York City, but a Canadian roll-out was confirmed for both Saks Fifth Avenue and OFF 5TH.

In a later media call, Baker stated his intention for an eventual seven full line Saks Fifth Avenue stores in Canada, and a further two dozen OFF 5TH locations. Some of these locations could be converted from current Hudson's Bay locations. This move comes as Nordstrom prepares to open its first Canadian store next year.

[Click here for the official press release.]

Review: Toronto Shopkeeper Shops Chapters (iStore)

Is the bookseller starting a new chapter?

Location: Chapters Queensway (1950 The Queensway, Etobicoke, ON)

It's no secret that the last fifteen years have been a tumultuous time in the book industry. Retail big box behemoths Chapters and Indigo helped squeeze many independent bookstores out of business, while discounters Costco and Walmart drove down the cost of bestsellers to razor thin margins. The growth of e-commerce saw Amazon dominating online retail and now tablets are fundamentally changing the way many people read while challenging old business models.

Yet Indigo Books & Music (which has owned the Chapters banner since 2000) remains Canada's largest seller of books and under CEO Heather Reisman has been striving to reinvent itself as a multi-category creative department store. The central focus remains books, but new categories such as small electronics, toys, gifts, and home accessories are taking a bigger piece of the retail real estate. Non-book items now account for 22% of Indigo's sales.

Last year Indigo sold the Kobo e-reader brand that it helped to develop and recently announced the opening of Indigo iStore electronic boutiques with a focus on Apple products, tablets, and smartphone accessories. The first of 40 planned boutiques opened last month at Chapters' reorganized Queensway location.

Design: When you enter the store there is no way you can miss the gleaming white hulk of the iStore sitting front and centre by the entrance. It's meant to grab you attention and is well organized. Counters display tablets and e-readers while fixtures feature accessories, mobile phone cases, and chargers. The selection looks impressive enough to make the iStore a destination in its own right.

The rest of the store has been reconfigured with giftware now spread throughout the store in mini vignettes that complement rather than clash with the bookcases. The bargain books area, which used to be fairly prominent is pushed to the side, and the Paper Shop is newly enlarged next to a baby department.

Merchandise: Books remain the core of the store but the other categories make browsing enjoyable and likely to increase a customer's time in the store. A fun baby department resides next to the children's book area and is filled with plush toys and baby gifts. Nearby the Paper Shop features Moleskine products, journals, greeting cards, and gift wrap. Also, the store now carries the colourful and affordable Poppin line which manages to make stationary covetable.

Service: Two associates were manning the iStore and were eager to offer guidance. Staff were also in evidence throughout the store approaching customers. The associate at the checkout promoted the store's Plum Rewards program, which enables customers to collect points on purchases and e-mails them personalized book recommendations.

Online: Facing the online colossus of Amazon can't be easy, but the newly redesigned Indigo website is a pleasure to navigate. While many Canadian retailers have yet to face the challenges (and potential) of e-commerce, Indigo is a well established player and has recently launched a free ship-to-store option that provides complimentary shipping to any of their locations. Additionally, they offer free standard shipping for most purchases over $25 and a Toronto Quick Ship option for $9.95.

Confusingly (and frustratingly) the website offers often substantially lower book pricing than found in store. No doubt this is due to being competitive with Amazon. Terminals are also found throughout the store, enabling customers to place special orders directly in store.

The website also features an electronics department with Kobo e-readers, iStore branded accessories, tablet and smartphone cases, and Beats headphones.

Grade: 75%

Lost marks for: While the website should be a strong ace up Indigo's sleeve, the variance between in store and online pricing is an annoyance.

Gained marks for: Good staffing levels for a weeknight. The new store design is engaging and makes one want to browse (though I suspect committed bibliophiles would think differently) and the iStore is an innovative way of treating a business threat as an opportunity.

News: The Stockyards Taking Shape on St. Clair

New retail development rises on former industrial site.

Driving past the corner of Weston Road and St. Clair Avenue West you see a new retail centre rising from the site of a former abattoir. The area was once known for the slaughterhouses that gave Toronto its Hogtown nickname and is located just north of The Junction.

Constructed by Trinity Development Group Inc., the new 554,000 square foot complex is fittingly called The Stockyards and scheduled for completion by spring 2014.

The area began shedding its industrial past in the 1990s and now has numerous big box stores and housing developments. The Stockyards presents a lively street facade with the parking hidden from street view in a three storey parking structure, while retail faces the street.

 

Anchoring the development will be one of Canada's first purpose built Target locations. Ground floor retailers will include Best Buy, PetSmart, Old Navy, Linen Chest, The Shoe Company, The Children's Place, and The Source. The second floor will include Winners, HomeSense, Michaels, and Pier 1 Imports.

[Images via Trinity Development Group Inc.]

News: Honest Ed’s Reportedly For Sale

The National Post is reporting that Honest Ed’s, the kitschy discount emporium at Bloor and Bathurst has been discreetly put on the market. The store and several adjacent properties collectively known as Mirvish Village are being valued at $100 million.

Honest Ed’s opened in 1948 to instant popularity and has become a local institution with its cheeky handmade posters and its massive signature outdoor signage. The 165,000 square foot store will soon celebrate its 65th anniversary.

First the Mirvish owned Princess of Wales Theatre is planned to be demolished for a condo development and now Honest Ed’s is on the block. It makes one wonder what would Ed think?

[Image via Honest Ed’s]

News: Loblaw to Purchase Shoppers Drug Mart in $12.4 Billion Deal

Retail giant to gain 1,200 locations and increase urban footprint.

In a deal announced this morning, Loblaw Companies Limited will be acquiring Shoppers Drug Mart Corporation in a cash for shares deal that will see the pharmacy chain continue operating as a separate entity.

This strategic move comes as competitors such as Target and Walmart are increasingly targeting Loblaw’s core food business, and just weeks after Sobeys has announced their acquisition of Canadian Safeway stores.

"This transformational partnership changes the retail landscape in Canada. With scale and capability, we will be able to accelerate our momentum and strengthen our position in the increasingly competitive marketplace," said Galen G. Weston, Executive Chairman of Loblaw in a press release.  "This combination creates a compelling new blueprint for the future, positioning us to capitalize on important trends in society, from the emphasis on health, wellness and nutrition, to the imperatives of value and convenience."

Loblaw, Canada’s largest grocery retailer, will distribute its private brand food products at Shoppers Drug Mart and sees the deal as strengthening its urban store network. The combined company generated revenue of over $42 billion last year, and the deal is expected to result in $300 million in cost savings in three years.

The deal is subject to regulatory approval.

In a related story, last week Loblaw announced the launch of a new health and wellness chain called Nutshell with a Toronto location to open in the fall.

[Click here for the official press release.]

News: Erin Mills Town Centre Announces a $100 Million Redevelopment

Renovation to include contemporary features and a giant glass sphere.

For almost 25 years the iconic clock tower of Erin Mills Town Centre has towered over the growing Erin Mills neighbourhood of Mississauga. Change is in the air as the shopping centre launches a renovation that will see the clock tower disappear and be replaced by a giant glass sphere 283 feet across.

The $100 million renovation will be the centre's fist since opening in 1989 and is planned to coincide with its 25th anniversary. The glass sphere will slice through the roof over the mall's central square where a new infinity pool will be surrounded with seating and space for community events.

The development plans to revitalize the current food court and restaurants at the main entrance with the addition of a 54 foot high entrance structure and an outdoor patio with views towards downtown Mississauga.

[Click here for the official press release.]

[Click here for the official presentation video.]