By Craig Patterson

Several prominent retailers will be closing stores this month in Canada, as the retail landscape shifts and new brands enter the market. The retail industry is complicated — real estate can be costly, and sometimes leases expire without renewal. In January, typically, some companies file for bankruptcy while others reconsider their operations following the busy holiday season, so there may be more to come this month as we expand our reporting.

Hugo Boss ‘Mink Mile’ Canadian Flagship to Close

Staff confirm that on January 20 Canada’s Hugo Boss flagship at 83 Bloor Street West in Toronto will close permanently. The impressive three-level store opened in late 2009 to much fanfare, replacing a women’s store on Cumberland Street in Yorkville.

With 35-foot frontage on the Mink Mile, the retail space spans four floors consisting of a ground floor spanning 3,586 square feet, a second level with 3,541 square feet, a third floor with 3,169 square feet, and a basement level spanning 3,605 square feet (building total: 13,900 square feet). CBRE Toronto’s Urban Retail Team is listing the space for lease.

Hugo Boss will relocate its Canadian flagship to Toronto’s Yorkdale shopping centre this year, where it will open a new 6,600 square foot store in space previously occupied by AllSaints (which recently relocated in the mall). The current Hugo Boss store at Yorkdale, which is located next to a gorgeous new Bottega Veneta flagship and is across from an expanding Holt Renfrew store, has been secured by a luxury brand to be announced at a later date.

J. Crew CF Toronto Eaton Centre to Close

The J. Crew store at CF Toronto Eaton Centre in Toronto will be closing permanently on Sunday, January 6. The 8,315 square foot store boasts a men’s shop with a separate entrance in a prominent location on the third level of the busy shopping centre, which is considered to be CF Toronto Eaton Centre’s ‘most desirable’ level that features soaring ceiling heights under a glass atrium and street front access at its north end (which is anchored by Nordstrom) as well as pedway access south over Queen Street to Hudson’s Bay/Saks Fifth Avenue.

The CF Toronto Eaton Centre J. Crew store opened in the fall of 2012 and was the second in Toronto for the brand, following the opening of a women’s only store at Toronto’s Yorkdale (which was J. Crew’s first Canadian store and the first international location for the US-based retailer).

J. Crew has closed several stores in Canada over the past couple of years. In the fall of 2018 the brand closed two stores — one at CF Rideau Centre in Ottawa and at CF Chinook Centre in Calgary and prior to that, two stores in the GTA (CF Fairview and CF Markville) as well as a unit at West Edmonton Mall. The Edmonton store was J.Crew’s only full-priced store in the city and when the brand opened an outlet store at South Edmonton Common (carrying much of the same product as in the mall), sales at West Edmonton Mall tanked.

J. Crew continues to operate a network of full-priced and outlet stores in the country, though some question if the brand will eventually pull out of Canada entirely. Canadian operations have struggled, though sources confirmed that the CF Toronto Eaton Centre store was profitable. When J. Crew entered the Canadian market in August of 2011 (via Yorkdale), some complained that its pricing was too high compared to its US stores.

Enda B in Vancouver Shuts Operations

The storied Enda B. retail group, based in Vancouver, shut its operations at the end of December. That included a 4,000 square foot store at 4346 W. 10th Avenue in Vancouver’s prestigious Point Grey area, as well as a 1,560 square foot DKNY-branded store at Vancouver’s soon-to-be overhauled Oakridge Centre.

Enda B. was an upscale multi-brand women’s retailer that was founded in 1983 with a small store in Point Grey Village, which grew to include a larger space on W. 10th Avenue. In 1998 Enda B. opened a DKNY-branded store at 2625 Granville Street, which eventually relocated to the upscale Oakridge Centre on Vancouver’s West Side. Enda B. also operated a DKNY store at West Edmonton Mall which closed a couple of years ago.

The second-generation family-owned business got started back when Vancouver was something of a fashion backwater. A handful of other prestige retailers operated in the city at the time — Alberto’s Boutiques and Shoes operated several stores (in 1987 they were amalgamated to create the multi-brand Leone concept at the Sinclair Centre on West Hastings Street) and Holt Renfrew operated a 50,000 square foot store at CF Pacific Centre. In 1985, luxury multi-brand retailer Boboli opened on the prestigious South Granville strip with luxury multi-brand Bacci’s opening next to it, also housing one of two Canadian locations for Italian brand Byblos.

Fast-forward to today, Vancouver is a luxury retail powerhouse with a 190,000 square foot Holt Renfrew which is said to sell about $400-million annually as well as Nordstrom’s top-selling store, not to mention an ever-expanding assortment of standalone luxury boutiques in the city’s downtown ‘Luxury Zone’. Some mono-brand boutiques are among the top performers globally in Vancouver, buoyed by designer-spending Asian locals and tourists.

*December decorations at Boboli. PHoto: Boboli via FAcebook*

Boboli Vancouver to Close Men’s Business

The prestigious multi-brand fashion retailer Boboli at 2776 Granville Street in Vancouver won’t be closing, but it will be losing its connected men’s store that features an iconic arched stone doorway. The men’s store closes mid-January and a new wall will be created to separate the two spaces.

The building with address 2762 Granville Street is being offered for lease by brokerage CBRE Vancouver (Mario Negris and Martin Moriarty have the listing), which is marketing a 2,260 square foot main level as well as a 1,674 square foot second floor. The neoclassical arched street-facing stone entrance doorway contrasts with the stark glass facade — the doorway was originally an upper-floor window moulding on an office building that was salvaged from the 1985 Mexico City earthquake, and hopefully the new tenant is able to retain it.

Boboli will continue to operate a women’s-only store at 2776 Granville Street, which offers fashions from some of the world’s most prestigious designers. At one time, Boboli also housed a Max Mara boutique at 2756 Granville Street on the other side of the 2762 Granville men’s store, which closed in 2013 after a dispute between Boboli’s then co-owners who separated their businesses (the other becoming Vestis Fashion Group). Max Mara now has a standalone flagship nearby which is operated by Vestis.

Walmart Closing Store at Toronto’s Cedarbrae Mall

This month, Walmart is closing its store at the Cedarbrae Mall in Toronto. The shopping centre, owned and operated by First Capital Realty, is located in Scarborough and also features anchors Canadian Tire, No Frills, JYSK and Goodlife Fitness, as well as a range of stores catering to the local community.

It’s uncommon for Walmart to close stores in Canada, though it has a history of exiting malls. Walmart entered the Canadian market in 1994 after acquiring department store chain Woolco, which operated stores in many malls. Over time, Walmart left many of those malls to open (oftentimes larger) standalone locations.

Hopscotch Chain in Receivership

Toronto-based healthy fast food business Hopscotch, with locations in Toronto, London ON and Edmonton, has been placed into receivership, according to publication Insolvency Insider. Hopscotch, which is owned by 2576230 Ontario, 2511981 Ontario and 9241922 Canada was placed in receivership on December 19 on application by RBC.

By the spring 2018, Hopscotch was regularly in arrears and as a result, in May, RBC contacted Wyatt Booth (an officer and director of the company) to discuss the financial situation. During the call, Mr. Booth advised that Cara Restaurant Group (now ‘Recipe Unlimited’) had expressed an interest in buying the business. Several months later, Mr. Booth further advised that the restaurant had suffered a severe flood in August, which resulted in substantial damage to its food inventory and equipment. He mentioned that two private investors would be acquiring 5-10% of the company, which would give the restaurant the financial relief required after the August incident, according to Insolvency Insider.

RBC told Mr. Booth that there were important items that RBC required information on, including financial reports. When RBC met with Mr. Booth in September of 2018, however, he was unable to provide requested financial information to RBC such as total sales for each Hopscotch location, monthly expenses and confirmation of rent payments, according to Insolvency Insider. In October of 2018, RBC made formal written demand for repayment of all indebtedness, arguing that Hopscotch has been unable to secure alternative financing or otherwise repay RBC despite ample time being given.

Spergel (ICIN) was appointed receiver. Legal counsel for RBC is Minden Gross LLP, while Garfinkle Biderman LLP is acting on behalf of the Debtors (Hopscotch) and Aird & Berlis LLP represents the receiver. [Subscribe to Insolvency Insider].

Conclusion: We’ll be analyzing the Canadian retail industry in depth this year as the industry continues to transform. We expect that there will be more closures to announce as headwinds hit some business models — high rents are proving to be detrimental to some retailers, which is resulting in strategy shifts that may include more of a focus on e-commerce as well as pop-up retail. At the same time, it’s important to keep in mind that some retailers are doing very well in Canada, including a mix of national and international brands. This year will see many more international brands enter the Canadian market, though not likely as many as 2017, which was a record-breaker with more than 50 international brands entering Canada by opening stores.