Canadian Retail Thread

[SSLL]

Yep, I think that's why they have the discount night Tuesdays and Wed (? or is it Mondays?) instead of just one day of the week like the rest of its cinmas. I went once, and really like it there though
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Wednesday » June 15 » 2005
Cinema giants merge
Onex's Cineplex swallows Famous Players, giving company 1,300 screens nationwide

MARY LAMEY
The Gazette

Tuesday, June 14, 2005


CREDIT: ALLEN MCINNIS, THE GAZETTE
Not a bidder Guzzo unlikely to buy excess theatres: Vincent Guzzo, who opens a cinema in Marche Central on June 28, isn't interested in any theatres made available by yesterday's merger.
Canada's two largest cinema chains are joining forces, with Cineplex Galaxy LP swallowing larger rival Famous Players for $500 million, a deal that will consolidate Cineplex's grip on movie screens across the country.

The purchase will give Cineplex, a unit of turn-around king Gerry Schwartz's Onex Corp., 1,300 screens in 132 theatres nationwide and a 63-per-cent market share. It also will relieve U.S. media giant Viacom Inc. of an expensive Canadian headache. The sale has been rumoured for months.

The deal comes at a price, however. Before giving the transaction its blessing, the Competition Bureau of Canada told Cineplex to sell 35 theatres in markets where the two chains compete. They include Gatineau, Quebec City, Montreal and 14 other cities.

"Given the degree of concentration in the industry and the barriers to entry into the market, it is essential that these theatres be sold off to ensure that this merger does not result in a substantial prevention or lessening of competition," said Gaston Jorre, the Competition Bureau's senior deputy commissioner of competition.

There is speculation that among those to hit the auction block will be Cineplex's outlets in Cote des Neiges, the Cavendish Mall, Delson and Dorion, as well as Famous Players' Place Versailles and St. Bruno cinemas.

Finding buyers for the local theatres might be difficult, said one player who already has decided to take a pass.

"We looked into buying Famous Players in Quebec." said Vincent Guzzo, president of Cinemas Guzzo.

"In the end, we didn't have the guts," Guzzo said.

Guzzo is putting the finishing touches on his 12th theatre complex, an 18-screen, 4,400-seat megaplex in Marche Central. The cinema is scheduled to open June 28.

"If Famous Players, with all the big money Viacom had to throw at it, couldn't make those theatres work, what hope do I have?" Guzzo asked.

AMC Entertainment International, Canada's other established exhibitor and owner of the 22-screen theatre at the Pepsi Forum, is said to be looking for a graceful exit from the market. The Kansas City-based chain was privatized last year after being acquired by investment firm Marquee Holdings Inc. for $2 billion U.S.

The merging of industry giants does not worry Guzzo at all. He has allowed Famous Players and Cineplex to duke it out for downtown market dominance, choosing instead to focus on suburban theatres with lower rents and plenty of room for parking.

"Now instead of having to point my guns at two competitors, I can point them both at one," he said during a tour of his newest theatre.

"The problem with these guys is that they tried to buy their way out of their problems. The locations they chose were so expensive that they had to grab 100 per cent of the market just to survive. They jacked their ticket prices up, but you can only do that so long, before the public begins to complain."

In a conference call with analysts, Ellis Jacob, CEO of Cineplex, said management is confident that it will be able to realize substantial synergies once the transaction is completed.

Anticipating the unease the creation of such a dominant market force will cause everyone from the ticket-buying public to landlords and the Hollywood studios, Ellis sounded conciliatory.

"At the end of the day, this acquisition would not work if we don't have our partners on side."

Famous Players, soon to celebrate its 85th birthday, has 81 theatres and 787 screens. In 2004, the company had revenues of $520 million. Cineplex Galaxy operates 86 theatres and 775 screens. It had revenues of $354 million last year.

Units in Cineplex Galaxy Income Trust Fund, traded on the Toronto Stock Exchange, rose 15 cents to $14.35.

[malek]

most theatres have both tuesdays and wednesdays discounted, amc is no exception.

all of Guzzo's plexes are well placed and are always packed. they also had the lowest price at the door till a couple of months ago or so (it was 9$, now 10$).

[harls]

Cavendish theater is pretty lame-o.. same with Place Versailles.. both are outdated and are in crappy malls..

I love Guzzo's chairs.. they're huge and comfortable.

[SSLL]

I guess in Québec it's discounted on Tuesdays and Wednesdays, but in Ontario, I know only Tuesdays are discounted (at AMC and others).

More Mills malls, I wonder where in Montreal, Vancouver, and Calgary they'll be?
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Caisse set to be a force in mega-malls
By ELIZABETH CHURCH
Tuesday, June 14, 2005 Updated at 8:30 PM EDT
From Wednesday's Globe and Mail

The Caisse de dépôt et placement du Québec plans to invest up to $1-billion to roll out three more mega-malls in major Canadian cities in the next four to six years with its U.S. partner Mills Corp.

The move follows the success of the joint venture's first project, Vaughan Mills, a huge 1.2-million-square-foot shopping, discount and entertainment complex north of Toronto and would include sites in Calgary, Vancouver and Montreal.

Paul Gleeson, vice-president for development of the pension fund's retail landlord Ivanhoe Cambridge, said in an interview Tuesday that the new projects would be similar in size and feel to Vaughan Mills and would likely include many of the same major retailers. He said he hopes construction on at least one site will begin next year, with an opening expected in the fall of 2007. While planning work is being done in all three cities, he said the Calgary location is the most advanced at this time.

“Hopefully we will have these three under way in the next four to six years at least,” he said.

Mr. Gleeson estimated costs for each project would run between $300-million and $350-million, based on his experience at the Toronto site.

Since opening its doors last fall, Vaughan Mills has attracted more than 6.5 million shoppers. More than half of those visitors travelled more than 16 kilometres to come, Mr. Gleeson said, confirming that the mall is attracting customers from much farther afield than a traditional regional mall. “We are drawing from an extremely wide trade area,” he said. “We are quite pleased with how it has performed.”

The new mall, which is anchored by U.S. merchant Bass Pro Shops Outdoor World, also attracted 510 tour buses in its first seven months of operation.

Mr. Gleeson, who is speaking today at a meeting in Montreal of the International Council of Shopping Centers, said he also will announce the opening of a new retailer at Vaughan Mills. He would not provide further details, but industry insiders expect that U.S. clothing discounter Burlington Coat Factory Warehouse Corp. has finally decided that it will move into the mall.

Burlington was supposed to have been among the first major anchors when the mall opened.

But it never set up shop, pulling out at the last minute until it could confirm some other nearby Canadian locations at an acceptable price to the company, sources said.

While Vaughan Mills took eight years to get off the ground, Mr. Gleeson said he is optimistic that the next three malls will go up more quickly. Once land and municipal approvals are complete and leases signed, he said a new mall will take about 18 months to construct.

He said Vaughan Mills represented a new concept for Canada that combines entertainment and retail facilities, but its success should make the latest projects easier to sell.

“The retail community understands the product now,” he said. “We want to roll the project out and capitalize on the momentum that we have from Vaughan Mills.”

Toronto-based retail consultant John Winter says that is a wise move, given the way consumers have reacted to the Toronto site.

“I think the performance in Toronto will make it easier to rent up the other sites,” he said.

Mr. Winter said Vaughan Mills' success shows how tired shoppers are of the same old power centre concept, ruled by large parking lots and big-box outlets. “There is a real appetite for good, new centres.”

Still, that appetite may only be so big. Mr. Gleeson said the exclusive agreement Ivanhoe Cambridge has with Mills Corp., an Arlington, Va.-based developer, is only for four sites. He said there may be room for a plan B that involves malls in other locations, but he said to work, they would have be supported by a population of at least one million within its catchment area and be far away from the joint venture's other malls.

“Right now we want to focus on the highly populated areas,” he said.

[SSLL]

I think this type of mixed-development would be great in Canada's bigger cities! Think of the possibilities...Cities that coudn't support a 300k square foot store (like Quebec city, Winnipeg or Halifax) could get one in mixed use development with affordable housing attached!
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Here's a pic
Sat 18 Jun 2005

Giant IKEA thinks small to expand in town centres

PETER RANSCOMBE

THE furniture giant IKEA yesterday unveiled radical plans for the first in a series of smaller stores in town centres across Britain.

The new shops are a departure for the Swedish retailer, which has previously opted for huge out-of-town warehouses.

An application to build a smaller store at Hillingdon, in West London, is expected to be submitted for planning permission within the next fortnight.

Scott Cordrey, IKEA's UK property manager, said: "The concept will be very different to anything we have built before in the IKEA world.

"This will be a benchmark for retailers in the M25 area, both in flexibility and environmental measures."

The new store, which will include a restaurant, will be about 20,000 sq m in size and laid out over three levels. The development also will include 240 one- and two-bedroom flats, with 170 of them classified as affordable housing.

The chain intends to build between eight and ten of the new smaller stores within the next three years.

A spokeswoman for IKEA said they have no immediate plans for a new store in Scotland, but that they have not yet chosen locations for the smaller shops.

The company already has two large branches in Scotland - one just off the Edinburgh city bypass and another at Braehead in Glasgow.

Last year, John Prescott, the Deputy Prime Minister, refused the furniture chain permission to build a £30 million store at Stockport, near Manchester, because it went against government policy on out-of-town shopping developments.

IKEA appealed to the High Court but the decision was upheld last March. In a statement released after the High Court decision the company said it would continue with its expansion plans.

The smaller stores are seen as a way around the planning policy. The firm has described its new format as "IKEA as we know it" but that it would involve "compromises on range presentation and office space".

Leigh Sparks, professor of retail studies at Stirling University, said: "The smaller size of the stores will inevitably mean a compromise on the number of products available. How they handle that will be an interesting choice, and what works and what doesn't work is something they'll have to find out through experimentation."

Prof Sparks thinks the new stores may make use of IKEA's home delivery service and could act as a shopfront for items that may not be held in stock in the smaller stores but would be available to order.

He added: "Much will depend on the mix of products in store. There is a danger that if existing customers go to the new stores and are dissatisfied with the range they find there then it could damage the brand."

Neil Mason, a senior retail analyst with Mintel, said: "This is an attempt by IKEA to modify its format to get planning consent and make itself more available to consumers in the UK.

"They've been a victim of their own success in some ways - they're just so popular. They have a winning formula and I see no reason why they can't repeat that with their smaller format stores."

He added that the Swedish firm's plan to start selling goods online also would appeal to shoppers who wanted to avoid the crowds in its existing 13 large stores.

[Holden West]

I'm baffled. Our IKEA experiment failed miserably.

IKEA opened a similar mini-store in the mid 1980s in Victoria at 1010 Yates St at Vancouver St. in the Plimley Motors Building (now Moxie's Grill).

It was an interesting novelty at first but the thrill wore off when people got sick of being told most large items would have to be delivered from Vancouver. The store closed after a few months. Perhaps they also underestimated the number of modern design minded Victorians that would buy the big ticket items like furniture and custom shelving and cabinetry.

Today, IKEA charters a special bus that regularly leaves Victoria for the Richmond IKEA. I believe the deal is the fare is deducted from your IKEA purchase if you buy over a certain amount--$200 or something.

[SSLL]

Hmm...I think the difference (from Victoria's former store) woud be that the store's would be 20,000 square meters, which is as big as the older Ikeas in Canada (Richmond's is 20k, Montreal's is 23,700, Burlington's is 22,200, and North York's is 24,600 square meters). In fact, it'd be bigger than the one in Ottawa (which at a tiny 12,500 square meters is the smallest in North America, and one of the world's top ten smallest). So I guess we couldn't call them small stores, rather, small footprint, more versatile stores. It's just it'd have a smaller footprint (being spread over three levels), and would share its space with commercial and residential uses. I think it's a great idea to have in inner cities with Ikeas already. I'm surprised Victoria (or Winnipeg or Halifax) doesn't have enough drawing power now to warrant a smallish Ikea.

[Holden West]

Holy crap--that's a huge difference. Here's a picture of the former IKEA store as it looks today (the photo probably covers half the space). As you can see, it's a much smaller century-old building.

http://www.salescene.com/moxies.html

IKEA rumours continue to surface every few years here but presumably IKEA head office has run the numbers and concluded Richmond serves the Island adequatley. Nanaimo might be able to use one if it continues to grow.

I agree--I hope any new ones here have a smaller footprint with complementary retail and a location closer to the downtown core. Not a giant sprawl-monster.

[someone123]

Part of the issue is that IKEA does pretty well even without the stores in most markets. I'm guessing they're doing even better now with online shopping.

The question they're faced with isn't really whether or not an area can support a store, but whether or not a store will bring in enough new business to justify its existence.

[Doug]

I would guess that the most likely location for a Mills mall in Calgary would be either the northwest or north central part of the city, probably along the Stoney Trail extension. Calgary hasn't built a new enclosed suburban mall since 1982, when Deerfot Mall, Sunridge and Deer Valley all opened at the same time. The last three enclosed malls were downtown: Eau Claire Market (1993), Eaton Center (1990) and Bankers Hall (1989). Of course Chinook expanded in 1984, 1987 and 2000, Southcentre in 1988 and 2001, Market Mall in 1987 and 2004, Northlands in 1988 and Sunridge in 2005. Still, compared to most other Canadian cities Calgary has few enclosed suburban malls, especially considering that it has by far the highest retail sales per capita in the country.

[SSLL]

I don't know much about Calgary, or where Calgary Mills will be going. Does anyone know any real estate insiders? With regards to the quads, Market Mall's in the NW, Marlborough Mall and Sunridge are in the NE, Soutcentre's in the SE, and Chinook's in the centre. Deerfoot Outlet mall also in the far NE, so maybe it'd be best to be in an undermalled area. What's in the SW? And where is the largest concentration of people?

I wonder where in Montréal and Vancouver a Mills mall should go.

[Rusty van Reddick]

^ Don't be surprised if a "Calgary Mills" is in Okotoks or Airdrie. The one in Chicago was opened in Gurnee, which was practically exurb in 1989 or whenever it opened. These places go FAR from the standard suburban centres.

"Airdrie Mills" actually had that particular corporate ring to it.

[srperrycgy]

I agree with Stoney and Deerfoot as a potential location for a "Mills" Mall. I'm sure the developer would pony up for a couple of interchanges. There are a couple of others off the top of my head:

- west of Springbank Airport by Calaway Park

- Corner of the future East Freeway and the TCH.

Not really sure about anything to the South.

I'm not crazy about the "Mills" naming though. A little bit dull to me.

[SSLL]

But Gurnee is almost equally in between Chicago and Milwaukee, an area of more than 10 million people (even in 1989), and was near Great America, a popular theme park too. Calgary has one million people now, so maybe closer than further away from people is the way to go...

[Rusty van Reddick]

^just saying that Gurnee was a hamlet at the time with no other big (or small) retail.

All changed now, was visiting a friend who bit the bullet for a house in the burbs (this is a 100 year old house but still, it's a suburban nightmare), in Gurnee, and my God.... it has changed.

[neilson]

Halfway Between eh?

Red Deer Mills anyone?

[SSLL]

That wouldn't be unsmart, since Edmonton's not got a value outlet mall either. West Edmonton's just a regular mall. So in between would catch nearly 2.5 million people! How long would that be to drive from either? An hour?

[neilson]

Red Deer to Edmonton = 100 miles.
Red Deer to Calgary = 99 Miles.

Red Deer to shopping? I think YES!

[SSLL]

I think if you add a casino next door, you could have your next megaresort!

[SSLL]

That's not good news for Toronto's Virgin Megastore plans (at Metropolis). Isn't there one nearby it already? I hate how HMV is driving everyone else away, it's getting near anti-competitive. Tower Records cited HMV's dominance as one of the two reasons it closed its two stores in the GTA, the other reason being their own financial troubles.
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HMV to Open Canada’s largest store dedicated to music and DVD

For Immediate Release. Toronto, ON. June 28, 2005

HMV Canada Inc, Canada’s leading music retailer and fastest-growing DVD chain, announces today that it will open the country’s largest store dedicated to music and DVD, on the site currently occupied by Virgin Megastore in Vancouver, B.C.. As a result, Virgin’s only Canadian Virgin Megastore, located on Vancouver’s Burrard Street, will cease from trading under the Virgin brand name on September 4th, 2005. as Virgin Entertainment Group has decided to withdraw from the Canadian marketplace to enable resources to be fully focused on its retail business in the United States

The 40,000 square foot, three-level store is located on the corner of Robson Street and Burrard Street in central Vancouver, the city’s busiest and most prestigious retail destination.

When it opens for business on September 4 2005, the new HMV flagship location will offer the most extensive selection of CD’s and DVDs in a single store in Canada, with access to a range of more than 400,000 different titles.

With eight stores already located in the greater Vancouver area, and a further two stores opening in Burnaby the summer of 2005 in Lougheed Town Centre and Metrotown Centre, HMV will be the city’s number one music retailer and fastest-growing DVD chain.

Humphrey Kadaner, President of HMV Canada, commented:

“Vancouver is a key market for HMV. Not only is it Canada’s third largest city, but Vancouver also has a great music and movies tradition, making it a fitting location to open HMV Canada’s biggest store to date. Our prime retail location on the corner of Robson and Burrard puts HMV right at the heart of a city which is preparing to ‘welcome the world’ for the 2010 Olympics, and we are delighted to offer Canada’s biggest selection of music and DVD from our new store.”


Employees of the Vancouver Virgin Megastore will be offered continuous employment with HMV. Virgin Entertainment Group wishes to thank all of its staff, customers and suppliers for their support of the Vancouver Virgin Megastore.

About HMV
With over 80+ years of music retailing history, 370 stores worldwide and 102 stores in Canada and growing, HMV is the world's premier retailer of music. HMV is Canada's leading music retailer and it's fastest growing DVD destination. HMV has proven itself as an innovative leader in Canada since 1986 and has been named Canadian Music Retailer of the Year for the past 17 years and most recently named Canadian DVD Retailer of the Year - making HMV the only retailer in Canada to receive both honours in the same year. HMV.com, which launched in July 1999, is now powered by Amazon.ca, and offers Canada's largest on-line music and DVD selection.