By Retail Insider

Mall Landlord Brings Motion to Evict Hudson’s Bay Stores for Unpaid Rent

Things haven’t been running smoothly for the Hudson’s Bay Company recently, and that’s an understatement. According to a French language report by Marie Eve Fournier in La Presse last week, landlord Cominar has brought forward a motion in Quebec courts to terminate the leases for three Hudson’s Bay Company stores in Quebec due to non-payment of rents. The Hudson’s Bay Company says that the move by landlords is a form of intimidation and ‘bad faith’ and that the retailer is looking for resolution.

Cominar REIT says in court filings that HBC hasn’t paid rent since April at Rockland Centre in Montreal (monthly rent $86,200), Mail Champlain in Brossard (rent $110,200/month), and at Centre Laval in Laval (rent $20,500/month). Notices of default were sent in June and notices of termination followed last month. In total, damages and unpaid rents claimed amount to $3.68 million for Rockland Centre, $26.95 million for Mail Champlain, and $2.21 million for Centre Laval. All three Bay stores in those malls are currently open.

*hudson’s bay store in Mail Champlain. photo: Mail Champlain*

Another French language report last week in La Presse noted that landlord Oxford Properties is suing HBC for more than $2.29 million in unpaid rents at two shopping centres including Galeries de la Capitale in Quebec City (monthly rent of $220,000) and Promenades Gatineau near Ottawa ($145,900/month rent). The same report notes that HBC had not paid rents for eight of the 11 Oxford-owned malls in Canada containing Hudson’s Bay stores.

Hudson’s Bay claimed that the Oxford-owned malls are no longer “first class” and are not doing enough to attract shoppers. As a result, Hudson’s Bay says it is withholding rents.

In April, at the worst of the pandemic, the number of transactions at the Promenades Gatineau Bay store fell by 99.1% (from 16,090 to just 149) compared to the same month of the previous year. Sales were down a whopping 99.5% (from $1.07 million to $ 7,926). Five months later, in September, transactions were still 35% lower than a year earlier (9,962 versus 15,337 12 months earlier). Sales were down nearly 29% (from $1.07 million to $759,000) over the same period.

The return to previous sales numbers were even slower at the Galeries de la Capitale, with sales in September being 39% lower than a year ago (from $1.73 million to $1 million). As for the number of transactions, it was down 43% from 22,425 to 12,684 over the same period.

Dorval Property Corporation, a Toronto real estate company that owns Les Jardins Dorval in Montreal, is also suing HBC for unpaid rents amounting to almost $ 660,000.

Larco, owner of Park Royal in West Vancouver, is also suing HBC four outstanding rents estimated to be about $365,000. Hudson’s Bay’s monthly rent is about $61,000 at Park Royal.

Hudson’s Bay is said to be in material default for its remaining shuttered real estate once occupied by home furnishings retailer Home Outfitters. The Hudson’s Bay Company states that it is not insolvent, though things appear to be very concerning.

In the United States, 24 Lord & Taylor and 10 Saks Fifth Avenue locations are the target of a US $846.2 million foreclosure lawsuit by Wilmington Trust. Hudson’s Bay held the Lord & Taylor locations despite selling the retailer to Le Tote last year. The complaint alleges the borrowers missed the April 1 payment on a $846.2 million loan and have failed to make payments since. The April payment was the first one due after the COVID-19 outbreak caused widespread shutdowns.

Saks Fifth Avenue stores targeted for foreclosure under the loan include the following locations:

Tysons Galleria near Washington DC in McLean, Virginia,
Phipps Plaza in Atlanta,
Fashion Show Mall in Las Vegas,
Dadeland Mall in Miami,
Walt Whitman Shops in Huntington Station, New York,
Chicago Place (700 N. Michigan Avenue) in Chicago,
Beverly Hills, California (9600 Wilshire Blv.),
Somerset Collection near Detroit in Troy, Michigan,
North Star Mall in San Antonio, Texas, and
Beachwood Place near Cleveland in Beachwood, Ohio.

Employees from HBC’s offices in Brampton Ontario are being moved to offices on Lawrence Avenue in Toronto. The company notes that it’s part of a “new way of working” as the world shifts amid the COVID-19 pandemic.

The Hudson’s Bay Company is the oldest continuously operating corporation in North America. It once owned much of Canada’s land mass and is now a retailer with 89 stores across Canada as well as an e-commerce site. Recently Hudson’s Bay announced that it would shutter stores in downtown Edmonton and in downtown Winnipeg, marking the end of a history where the Hudson’s Bay Company founded those communities and anchored retailing for decades.

We will continue to follow this story.

*shuttered bloor street banana republic. photo: craig patterson*

Banana Republic Shutters Mink Mile Flagship After 25 Years

Gap-owned Banana Republic has shut its store at 80 Bloor Street West in Toronto. The store operated there since 1995 and was one of the first three Banana Republic stores to open in Canada (the first being at West Edmonton Mall and the other at CF Toronto Eaton Centre).

The Banana Republic store on Bloor spanned two levels and more than 6,000 square feet in a space that was once occupied by an Emporio Armani store (between 1990-95). Roots is the other retail tenant at 80 Bloor Street West, and Harry Rosen’s five-level flagship store is located adjacent at 82 Bloor Street West. A major proposal could see 80 and possibly also 82 Bloor Street West demolished for a new mixed-use tower housing retail space as well as hundreds of residential condominium units.

The Gap has been quietly closing stores across Canada with a particular bright spot being Old Navy which has done well here. The future of the Gap’s Bloor Street store was also said to be in question prior to the pandemic.

Toronto’s prestigious Bloor Street West is seeing an unusually high number of vacancies, which shouldn’t be a surprise given the COVID-19 pandemic. A J. Crew store closed late last month and the beautiful Club Monaco building at 157 Bloor Street West is also on the market (the retailer has also been on Bloor for a quarter of a century). UK luxury brand Mulberry closed its store at The Colonnade at 131 Bloor Street West in the summer and several more retailers are said to be looking at pulling the plug on their Mink Mile operations. It’s not all bad news as brokers say there is interest and leasing activity in the area, which in November of 2019 saw Eataly open at the overhauled Manulife Centre.

*lee valley tools ottawa. photo: lee valley tools*

Lee Valley Tools Launches Mobile Shopping Tool for Customer Safety

Ottawa-based retailer Lee Valley Tools is innovating in the face of COVID-19 while restructuring its operations. This month the company launched a mobile shopping tool that integrates with its website allowing for mobile contactless shopping at Lee Valley’s 20 stores across Canada.

After the COVID-19 store shutdowns in the spring, Lee Valley Tools saw an opportunity to transition from express to curbside pick-up with the launch of the mobile app adding another level of safety to the in-store shopping experience. "The health and safety of our customers and staff is our number one priority and our new easy-to-use mobile feature provides another layer of protection while shopping in-store during these unprecedented times," said Jason Tassé, Chief Operating Officer, Lee Valley Tools. "We're thrilled to launch this mobile tool in all our stores across Canada to give our customers a user-friendly way of making the browsing and purchase process contactless".

*screenshot of lee valley tools website.*

The mobile feature was designed to be easy to use as customers don't need to download it on their mobile device. Rather they can visit LeeValley.com when they enter the physical store and click on the barcode icon, select their store location, and start shopping. The online feature also allows customers to scan an item's bar code and see a full description of every product offered by Lee Valley Tools before deciding to purchase.

The contactless shopping option is available at all 20 Lee Valley Tools store locations across Canada starting October 1 and is compatible on all mobile devices.

*new diesel storefront at yorkdale shopping centre. photo: norman katz*

Diesel Opens Yorkdale Storefront, Only Standalone Full-Priced Location in Canada

Italian clothing brand Diesel has opened a new storefront at Toronto’s Yorkdale Shopping Centre. It’s now the only standalone full-priced Diesel store in Canada after other locations have shuttered since last year. Diesel has had several different locations at Yorkdale since 2012.

SLIDESHOW (swipe)

INTERIOR IMAGES OF NEW DIESEL STORE AT YORKDALE SHOPPING CENTRE. PHOTOS: NORMAN KATZ

The new 2,435-square-foot Yorkdale Diesel features an LED facade that makes the store quite noticeable. The Diesel store is located between Innisfree and Oak + Fort in a retail space vacated by Reiss last year.

Diesel once had a bigger presence in Canada. Last year the brand shut several units including a flagship on Yorkville Avenue in Toronto as well as a large store on Rue de la Montagne in Montreal. Diesel still operates outlet stores in suburban Toronto and Montreal. The brand is also carried at multi-brand retailers in Canada such as Hudson’s Bay.

*EXTERIOR OF FRANK AND OAK STORE. PHOTO: FRANK AND OAK*

Frank And Oak Buyer Looks to Take Brand Global, Looks to Acquire Other Canadian Retailers

After filing for creditor protection in June, Montreal-based fashion retailer Frank And Oak was acquired this month by New York City-based Unified Commerce Group. In a paywalled report in the Globe & Mail on Sunday, information was provided by Unified about the future of Frank And Oak which currently operates nine stores after shutting 11 locations recently.

Many of the stores were reportedly unprofitable, as was the company which was saddled with pricey leases for some high-profile locations.

Frank And Oak started as an online men’s fashion business in 2012 and was funded by Hicham Ratnani and Ethan Song. Mr. Song resigned from the company in March of this year and Jeremy Brown, formerly CFO at Sephora, is now working with Mr. Ratnani during Frank And Oak’s transition.

An expansion into Europe and Asia is a possibility according to Unified Commerce Group Co-Founder and Chief Financial Officer Greg Freihofner with China being a particular market of interest. It’s unclear if the expansion would involve physical stores or if the retailer would operate purely online.

Unified Commerce Group also said in the interview that it was looking at possibly buying other struggling Canadian retailers.

Oxford Properties Shopping Centres Partner with Food Banks Canada to Raise Funds to Help Alleviate Hunger

Yorkdale, Square One, Scarborough Town Centre, and Oxford Properties’ shopping centres across the country have launched the #PassThePlate2020 campaign in partnership with Food Banks Canada to help the organization reach its $150 million COVID-19 response fundraising goal to alleviate hunger in Canada.

As part of the effort to raise money for Food Banks Canada, the shopping centres have launched a social campaign encouraging Canadians to share a video or photo featuring a plate with the hashtag #PassThePlate2020. Oxford Properties will donate $5 for every post, equivalent to ten meals, to a maximum of $10K per shopping centre to Food Banks Canada. Canadian celebrities have shared videos of themselves passing the plate to launch the campaign and encourage Canadians to do the same.

“Food banks around the country have been seriously impacted by the pandemic, having to manage with fewer volunteers while adapting their operations and serving new clients affected by crisis,” says Bradley Jones, Head of Retail, Oxford Properties. “Our shopping centres play important roles in their communities, and we will use this reach to mobilize the wider community to take action against increasing food insecurity accelerated by the pandemic. Pass the Plate can inspire donations at a variety of levels as we partner with Food Banks Canada and work towards alleviating hunger.”

“We’re concerned for what’s ahead. The pandemic’s economic impact, especially as the income supports come to an end, will impact demand for food banks nationwide. With Oxford’s support we hope to increase awareness for our fundraising campaign and help deliver the nutritional support people need as we move into the holiday season,” said Chris Hatch, Chief Executive Officer, Food Banks Canada.

Food Banks Canada represents ten provincial associations, more than 700 affiliated food banks, and more than 3,000 community agencies. Oxford Properties’ commitment comes in response to Food Banks Canada’s “I ATE” campaign urging Canadians to make monetary donations with the goal of raising $150 million to help alleviate hunger in Canada. Food Banks Canada still needs more than $28 million to raise to meet this goal.

Additional ways to donate to Food Banks Canada include adding on a donation to a gift card purchased at any of Oxford’s GTA shopping centres, donating the balance of a gift card, or through a mobile device by scanning a QR code which will be posted throughout the centres. Oxford is committed to raising $175K in support of Food Banks Canada.

To donate or learn more about Oxford’s Pass The Plate campaign, please visit FoodBanksCanada.com

Question and Answer with Muji’s North American President Toru Akita

Retail Insider recently asked Muji’s North American President a few questions about the retailer’s Canadian operations. Muji opened its first store in Canada in Toronto in 2014 and the company now operates nine stores — five in the GTA and four in the Vancouver/Lower Mainland.

RI: How has MUJI been doing in Canada since it entered the country several years ago?

Toru Akita: Since opening the first MUJI store in Canada in November 2014, we have seen steady growth and developed a loyal customer base. We have since increased the number of stores in Canada to nine, across several provinces. We are grateful to our Canadian customers and supporters who have made this possible.

RI: Stores in BC and in downtown Toronto were expanded with a broader product assortment. Might we see more of the Ontario stores expanded as well?

Toru Akita: As we are able to expand the floor space in our stores, we can provide products and services closer to those offered in Japan — therefore we’re always thinking about which stores can be expanded and where we can offer more products. At the moment, we are considering the impact of COVID-19 on the lives of our communities, and any future expansions will have this in mind as we seek to become more useful to our customers.

RI: In terms of product offerings, will we continue to see new categories in Canadian stores?

Toru Akita: We are constantly reviewing and reconsidering the products that we offer in each region, and will continue to introduce new products in our Canadian stores, especially in response to changes in society and lifestyles after COVID-19. We want to create a store where all of the items necessary for life under this new normal are available in good quality and at a reasonable price.

RI: Is there a timeline for when Muji expands into the Alberta and possibly Quebec markets?

Toru Akita: We don’t have any plans to expand into these provinces for the time being.

RI: Might we see Muji grocery stores or hotels in Canada over the next decade?

Toru Akita: There are so many amazing MUJI services in Japan and elsewhere that have not yet been introduced to Canada, including grocery stores and hotels. Before we bring these major new categories to the Canadian market, we’ll need to do more work to understand how they could fit into the lifestyles, interests, and needs of Canadian consumers.

*SCREENSHOT OF KING & BAY’S WEBSITE SHOWING VIROSHIELD MASKS.*

King & Bay Innovate Once Again in the Face of COVID-19

Toronto-based retailer King & Bay have announced the launch of ViroShield — a face mask that protects 99.94% against COVID-19 with first-to-market technology.

The clothing company — which launched the charitable Mission2Mark program at the beginning of the COVID-19 pandemic — is once again on the frontline in the fight against COVID-19. The ViroShield face mask is unlike any other due to its three-layered design and the presence of the HealthGuard® AMIC coating — a specially formulated non-silver broad range Anti-Microbial and Anti-Viral formulated using cosmetic based chemistry which destroys SARS-CoV-2 - COVID-19 strain viruses — on its external layer. The under layers include a melt blown fabric and 100% cotton single jersey.

Other ViroShield face mask features:

Anti-odour and hygienic
Non-irritating with soft, lightweight, and breathable fabric
Extra soft ear loop, minimizing pressure on the ear
Durable to laundry wash without shrinking

King & Bay is distributing these masks in bulk, mainly for organizations (including retailers) to protect their employees at work. Organizations who are interested can contact King & Bay at MyKingandBay.com

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