Thursday, July 18, 2024

Canadian retailer Simons is expanding. Can it succeed where its peers couldn’t? | CBC News

Must read

Standing between the racks at a Simons store in Mississauga, Ont., Luke Gillet was on a mission to buy his dream wedding suit. 

“They have a crazy colour that I want to wear,” Gillet explained. “There’s a pink suit here that I was really hoping to find and it matches my fiancée’s dress, which has sort of a blush pink.”

Gillet is happy to support a Canadian-owned business, but that’s only one part of the retailer’s appeal, he said: “The selection is great. The fashions are current, the prices are really good.”

The Canadian fashion and homeware retailer is betting on happy customers like Gillet as it continues its gradual expansion. With a 10-store presence in Quebec, and a handful of others sprinkled between Vancouver, Edmonton, Calgary and Halifax, the brand is opening two locations in Toronto next year at Yorkdale Shopping Mall and the Eaton Centre — in addition to its Mississauga and Ottawa stores.

Yet, as the company relocates to a space haunted by the ghosts of big retailers past — Nordstrom, Eatons and Sears are all former tenants of the Eaton Centre space — it’s a stark reminder that department stores have struggled to gain a foothold in the Canadian market.

The aforementioned brands (and Target) have each met their demise in this country over the last two decades, some because of the challenges posed by transplanting a U.S. business into Canada.

Even as rising costs, picky customers and online competition roil an unpredictable retail industry, Simons says it’s doing things differently. Can it beat the big retail curse?

‘The reality is we have to stay competitive’

Shoppers ride an escalator in the Simons store at Londonderry Mall in Edmonton in August 2017. With a 10-store presence in Quebec, and a handful of others sprinkled from Vancouver to Halifax, the brand is opening two locations in Toronto next year at Yorkdale Shopping Mall and the Eaton Centre. (Jason Franson/The Canadian Press)

“I would not say that … because other department stores have failed in those places, that necessarily means that Simons is going to fail,” said Joseph Aversa, a retail management assistant professor at Toronto Metropolitan University.

“Simons went through a lot of challenges, right? In 2022, they experienced a fair bit of difficulty,” he noted. The retailer was family-run until that year, when it appointed its first outside CEO in Bernard Leblanc to steer the company out of the shadow of the COVID-19 pandemic.

Since then, the company has been “very calculated in terms of their expansions,” Aversa said. “They’ve grown relatively organically across across the country.”

Simons has seen steady growth in the last few years coming out of the pandemic, CEO Leblanc told CBC News in an interview, seeing a three per cent bump in sales growth from 2022 to 2023.

But the executive is well aware of the challenges that its forebears experienced in the Canadian market. The retailers that succeed in a market plagued by failure are the ones reinventing themselves by refreshing the customer experience, he said.

“That’s very much what we’re about … listening to our customer, being sure that we’re evolving, that we’re offering what they’re expecting,” Leblanc said.

While Simons stores in Toronto, Montreal, Quebec City and Vancouver will have the same inventory, the company will adjust its offerings based on buying behaviour.

He says it also tries to cater to its shoppers, which he says range from younger teenagers to mature adults, by bridging quality fashion and reasonable prices. Whether that will resonate as the company expands is yet to be seen, he acknowledged.

“I guess you never know, right? The reality is we have to stay competitive. We need to listen to what the clients are asking for. We need to continue to be obsessed in serving them and exceeding their expectations.”

‘The customer is changing’

A colourful assortment of neckties are seen on display in a department store.
An assortment of neckties are shown in the Simons store in Mississauga, Ont., on Wednesday. The retailer’s foremost competitor, Hudson’s Bay, has significantly cut down its footprint, announcing the closure of its Regina location after exits from Quebec, Alberta, Manitoba and Ontario. (Yanick Lepage/Radio-Canada)

Liza Amlani, the principal and co-founder of Retail Strategy Group, said that Simons does well in tailoring its products to suit customer tastes and sizes, understanding their shopping habits in-store and online, and having salespeople who know the product well.

U.S. retailers like Nordstrom made a fatal mistake in assuming that Canadians shop the way that Americans do, she said.

“We are different. We are not another state out of the U.S., we are another country. And across Canada, we’re very different: The Vancouver customer is very different from the Toronto customer,” noted Amlani.

She said the chain expanded too quickly in Canada, spreading itself thin instead of investing in one or two flagship locations that could draw in commuters — unlike the U.S., where Nordstrom locations are clustered together. Other analysts have noted that the chain overestimated how much Canadians would spend on luxury goods.

And, without a Canadian distribution centre, Nordstrom was pulling stock from the U.S. — costing money from freight and duties — or from its Canadian stores, which meant its stores were low on certain styles or sizes, Amlani said.

Simons’ foremost competitor, Hudson’s Bay, has significantly cut down its footprint, announcing the closure of its Regina location after exits from Quebec, Alberta, Manitoba and Ontario.

WATCH | Simons to open 2 new stores in Toronto: 

Retailer Simons is opening stores when others are shutting down

As department stores across Canada struggle to stay afloat, Quebec’s Simons is expanding, with two locations opening in Toronto next year — bringing the total number of Simons stores in Canada to 19.

Almani says Hudson’s Bay has fallen behind the times and dropped the ball on customer experience.

“The customer is changing, but the department store is not evolving with them,” she said.

For a brand like Simons, there are other risks when expanding into Canada’s retail market, Amlani said.

“We have a lot more choices as customers today. We have digital shopping, we have Shein and Temu — ultra fast-fashion players,” she said, referring to the Chinese online retailers, whose enormous inventory and low prices have upturned the industry. Customers are also shopping on Instagram and other social media sites, she said.

But she says she expects Simons to succeed in its expansion because it “has the trifecta down — the trifecta being product, customers and marketing. And what they’re doing is they are connecting all the dots,” Amlani said.

“Unless there is another department store that’s going to serve the needs of gen X and gen Z, we are going to see Simons thrive and succeed.”

Latest article