I wonder where in Toronto and Ottawa they're thinking...
From:
http://www.theglobeandmail.com/servl...Story/National
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Amid gloom, a retailer grows
Simons sees sector's woes as opportunity
MARINA STRAUSS
RETAILING REPORTER
Quebec fashion favourite Maison Simons is preparing to expand to the rest of Canada as it looks to capitalize on the upheaval surrounding the traditional department stores.
Simons, which runs seven department stores in Quebec, anticipates major overhauls at Sears Canada Inc. and Hudson's Bay Co., which have both struggled to make gains and now face new ownership arrangements.
"The market is in so much flux right now," said Peter Simons, president at Simons and the fifth-generation family member to run the Quebec City-based business.
"I do think everyone is trying to cope with the uncertainty surrounding other major players in the market," he said in a telephone interview. "Sears and the Bay -- whether they're going to merge or not, or whether they're going to survive or not. It's not a secret. . . . Everyone is concerned and they're talking about it and they're developing contingency plans."
Simons has hired real estate broke J.J. Barnicke to hunt for space in the Greater Toronto Area, and is eyeing a site in Ottawa that would be developed by Morguard Real Estate Investment Trust, he said.
And prime targets for expansion could be the large downtown department stores run by Sears, if they became available, he said. Industry observers believe those stores don't ring up enough sales for their size.
Sears and HBC, which owns the Bay and Zellers, are in the throes of change. HBC was snapped up recently by U.S. businessman Jerry Zucker, while Sears is in the midst of being taken private by its U.S. majority owner, controlled by hedge fund star Edward Lampert. Industry insiders believe that the new operators will eventually want to unload some of their stores.
Simons is ready to jump. It has developed a strong following in its home province, offering mid- to high-priced fashions that tend to suit customers' tastes by tracking sales patterns through technology. In this way it is quick to reorder the hits and dump the weak sellers.
It focuses on customer service, with on-site alterations, tailors in every store and a system of reserving new merchandise.
It invests heavily in its stores and their design, spending considerable amounts on artwork, for example, Mr. Simons said. The downtown Montreal store boasts a suspended glass sculpture by artist Guido Molinari that cost "at least a couple of hundred thousand bucks." He believes customers like to be pampered in an attractive environment. "If they're treated well, then they do spend more maybe."
And Simons sends its merchandise team around the world to scope out the latest styles and bring them quickly to the shop floor, developing exclusive products. At any time, it could offer $20 private-label T-shirts and $4,000 faux crocodile Paul Smith suits.
"We have a culture of service," Mr. Simons said. "We approach service in a unique way. We don't focus on the selling, we focus on the experience."
In his bid to expand, Mr. Simons started thinking seriously about the move at the beginning of the year, he said. Already he is looking at opening his first non-Quebec store in Ottawa at a possible extension of the St. Laurent shopping centre.
Simons needs big locations -- 80,000 to 100,000 square feet -- for its stores. "Space like that isn't easy to find," Mr. Simons said. "It has to be developed. There is very little new shopping centre development. We're looking around, looking for opportunities that make sense."
And he's looking for opportunities that result from changes in the department store landscape. "I think there is a lot of very valuable real estate there," he said of the Sears downtown stores. "But it's only valuable if you can make money operating it. I'm an operator. I'm not a real estate guy and I'm not a finance guy. You can't just keep losing money in locations and pretend they're worth something to you."
He said Simons can count on its solid relationship with the major landlords, among them Cadillac Fairview Corp. and Ivanhoe Cambridge, which is an arm of the Caisse de dépôt et placement du Québec. "They're thinking about us and we're thinking about them."
But Simons will be patient, he said. The Ottawa store, which still needs to get municipal approvals, could open by the end of 2008.
Privately held Simons, which has more than $200-million of annual sales, expects each of its new stores to be in the black in the first year of operation, he said.
Another Quebec retailer, Les Ailes de la Mode, made a disastrous foray outside of Quebec and was forced to retreat. But Mr. Simons said he will be cautious in his expansion. "My thing isn't just about big rapid growth. It's overdone."
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