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From High-Street to the Mall: The Changing Face of Luxury Retail in Canada
Shifts in the locations of luxury retail brands across the country are leading to changes in consumer shopping behaviours and an assessment of their presence in major urban markets
By Craig Patterson
Theface of luxury retail in Canada is changing as suburban shopping centre landlords target top brands to open stores. Over the past few decades, luxury retail has been, for the most part, the domain of urban streetfronts in Canadian cities. Now we’re seeing a significant shift across the country where luxury retailers are locating in suburban malls — something that has been typically more of an American phenomenon.
The shift is changing the way consumers shop and has become a concern for some, given that luxury retail in Canada has typically been located in places such as Bloor-Yorkville in downtown Toronto, the Burrard/Alberni ‘Luxury Zone’ in downtown Vancouver, and the Golden Square Mile in downtown Montreal. And the luxury shift to malls is only expected to continue as landlords show strong sales and aggressively target luxury brands to open in suburban malls.
It’s a phenomenon that has been seen in the United States for decades, where suburban shopping centres typically house a city’s luxury retailers while downtowns struggle. Few downtowns in major American cities have a substantial clustering of luxury stores, save for a handful of places such as New York City, Chicago, Boston, Washington DC, and San Francisco.
Luxury in Toronto’s burbs
In Canada, Toronto is the first city to see such American-style competition in terms of luxury brands moving to the suburbs to opening stores. A key year was 2009 when Tiffany & Co. opened at the Yorkdale Shopping Centre in Toronto, spearheading a luxury expansion that has resulted in the suburban enclosed mall becoming home to the largest clustering of luxury brands anywhere in Canada.
That same trend will continue over the next two years in Montreal and Vancouver, as developers complete projects that will include a substantial offering of standalone luxury brand stores.
Montreal’s Royalmount project, expected to be completed in August of 2024, will include a Yorkdale-like offering of luxury brand stores with names such as Louis Vuitton, Gucci, Tiffany & Co., Saint Laurent, Versace, Jimmy Choo, and others. Royalmount will compete for wealthy shoppers with downtown Montreal, which is home to the 250,000 square-foot Holt Renfrew Ogilvy store containing a substantial number of luxury brand concessions.
While Montreal is home to wealthy households, many locals buy luxury goods in other destinations such as New York City, Florida, and Europe. Montreal also lacks a key luxury shopping demographic — Asian shoppers — which have buoyed high-end retail sales in Toronto and Vancouver.
Luxury disruption in Vancouver
In Vancouver, the overhaul of the Oakridge Centre on the city’s West Side will cause disruption to the downtown core as luxury brands sign leases for the newly rebranded Oakridge Park development. Prior to the pandemic, downtown Vancouver saw the opening of an impressive number of standalone luxury brand stores, while at the same time, the city’s downtown Holt Renfrew store thrived with its assortment of brands and concessions. Downtown Vancouver’s Holt Renfrew location is said to have broken records last year with sales surpassing $400 million.
That could change when Oakridge Park opens to the public in late 2024 or early 2025. The leasing team at QuadReal, which is developing the retail component of Oakridge, is pursuing big names such as Chanel and other brands owned by parent companies LVMH, Richemont and Kering.
One of the big advantages Oakridge Park will benefit from is its climate-controlled interiors with privately-owned spaces. Vagrancy and crime have increasingly become a problem in downtown Vancouver as the city’s drug trade is growing out of control. Wealthy shoppers could gravitate to Oakridge Park for a more pleasant experience that will also include restaurants and other experiences.
Yorkdale’s luxury expansion
Back in Toronto, Yorkdale is going to be adding even more luxury retail over the next couple of years when it repositions an additional 140,000 square feet of the existing mall for luxury brands. New brands will enter the market and some existing luxury brands in the mall will relocate to larger spaces, according to sources. Some of the existing luxury brand concessions in the mall’s Holt Renfrew store will also have the opportunity to step away to operate larger standalone spaces in the new area while being given the opportunity to carry more product (including fur and exotic skins, both banned by Holts in 2021). Yorkdale’s expanded luxury offerings will make it second only to South Coast Plaza in North America according to a well-known broker, while Yorkdale’s luxury push could take further market share from downtown Toronto’s Bloor-Yorkville, which is home to various luxury store flagships.
Edmonton’s shift
Luxury retailers had operated in other Canadian cities in years past. But many have recently shifted significantly to suburban centres. Downtown Edmonton, which has seen much of its retail offering removed since the onset of the pandemic, was once home to a Holt Renfrew store as well as the location for high-end brands such as Escada, Birks and Polo Ralph Lauren. Louis Vuitton’s exit in 2019 from downtown Edmonton’s Holt
Renfrew to West Edmonton Mall is said to have been the catalyst for Holts shutting its downtown Edmonton store a year later, given that about half of Holt’s sales were in the Vuitton concession. Though, things were already challenging in downtown Edmonton with Escada and Birks having shut prior.
Now West Edmonton Mall, located in the western suburbs of Edmonton, is home to a highly productive standalone Louis Vuitton store as well as big-name luxury brands including Gucci, Tiffany & Co., Saint Laurent, and Balenciaga. Other luxury brands are said to be on the way. Canada Goose, being another brand that sold well at Holts in downtown Edmonton, now has a large standalone store at West Edmonton Mall.
Calgary’s conundrum
Downtown Calgary has managed to hold onto its 150,000 square-foot Holt Renfrew store and its lease was recently renewed. At the same time, the suburban CF Chinook Centre has been looking to secure upscale retail tenants and was successful in scooping-up Louis Vuitton, which in 2018 relocated from the downtown Holts to a space at CF Chinook Centre. The suburban mall is also home to Tiffany & Co. and Burberry and a Saks Fifth Avenue store (which lacks designer brands) and until recently, housed Calgary’s Nordstrom store. The downtown Calgary Holt Renfrew store has attempted to hold its own and was recently successful in maintaining Gucci as a significant brand. Sources told Retail Insider during the pandemic that Gucci was looking to open at CF Chinook Centre. But it’s instead decided to open a large ‘world of concession’ at the downtown Calgary Holt Renfrew that will house Gucci’s assortment of women’s and men’s ready-to-wear as well as bags, footwear, accessories and other categories. Downtown Calgary’s Holts also houses concessions for two very key luxury brands that cannot be found at CF Chinook Centre - Chanel and Hermes, which will keep wealthy Calgarians coming to the core at least for the time-being.
Montreal at risk
Of Canada’s three largest cities, Montreal’s downtown is the most at risk with respect to the shift of luxury retail to the suburbs. In decades past, luxury brands were found on Sherbrooke Street West and on Crescent Street, which is certainly not the case any longer. Following the exit of Escada from Sherbrooke Street earlier this year and Holt Renfrew in 2022, only Tiffany & Co. remains with a storefront at the Ritz Carlton Hotel facing Rue de la Montagne. Sources say that location will shutter when Tiffany opens at Royalmount next year, ending the decades-long luxury retail status for Sherbrooke Street, entirely.
Toronto and Vancouver are expected to remain robust for luxury retail despite the rise of suburban locations, given that both downtowns attract Asian tourists and are home to top hotels, restaurants, and other attractions. Some brokers are saying that both cities are ‘two store markets’ that can support luxury retail in both downtown cores, as well as suburban malls. What that means for Toronto is that some of the first-tomarket luxury stores that have opened at Yorkdale could also open on Bloor Street or Yorkville Avenue, if they haven’t already.
Continued suburban luxury growth
It’s an interesting trend to watch as Canadian cities become more like those in the US, particularly when it comes to the availability of suburban luxury retail brand stores. At the same time, we’re not seeing the same trend in major European cities which boast high-density populations and a lack of competition from suburban malls. What’s resulted is a situation where large European cities have thriving high streets with luxury stores, not to mention successful department stores housing big-name luxury brand concessions. Given Canada’s similar history to the US with sprawling suburbanization, highway networks and suburban malls, we may continue to see a shift to a US-like model where luxury retailers open stores in the suburbs at the expense of downtowns.
