WILL SAKS FIFTH AVENUE OPEN IN CALGARY?

Hudson's Bay, Downtown Calgary. Photo: Google Streetview screenshot 

Saks Fifth Avenue could open in Calgary, and it could open either downtown or at the Chinook Centre. A Calgary store could follow Saks openings in Vancouver and Toronto, which are expected to open first according to HBC CEO Richard Baker.

Calgary cold be considered a prime city for Saks Fifth Avenue. It has over 1 million people. Salaries are high and income and other taxes are relatively low compared to the rest of Canada.

We would expect a Calgary Saks store to be, at least initially, located within existing Hudson's Bay store space. More specifically, we'd likely see Saks either within the flagship Downtown Calgary Hudson's Bay store, or somehow integrated into the current Hudson's Bay store, now under renovation, at Chinook Centre. Locating within existing Hudson's Bay space would be much more cost-effective for Saks as HBC owns its Downtown Calgary store and has an excellent long-term lease at its Chinook Centre store. 

As an aside, we're not sure if Hudson's Bay's opening one or more "Saks departments" within its existing stores would be a good idea. Saks stores are noted for their customer service and attractive store interiors. Hudson's Bay stores have not traditionally been known for either. The Saks brand could be damaged if it is placed too commonly within existing Bay stores, and we think segregating the two would be better for the Saks brand. With Richard Baker's recent assertions that Hudson's Bay would become "Canada's Harrod's" with the inclusion of Saks, we're concerned that random Saks spaces within Hudson's Bay stores could seriously harm Saks Fifth Avenue's image both to Canadian shoppers as well as internationally. 

Hudson's Bay, Downtown Calgary. Photo: Google Streetview screenshot

Saks Fifth Avenue, Downtown Calgary:

The Downtown Calgary Hudson's Bay store is about 450,000 square feet over six levels. Its 75,000 square foot floorplates allow for some flexibility with the possible inclusion of Saks occupying one or more floors. Saks could also possibly occupy some of several floors or even include smaller "Saks departments" throughout the downtown store. 

The Bay store faces several challenges for Saks. It's separated from Downtown Calgary's main shopping Centre, The Core, by an adjacent shopping plaza called Scotia Centre. Scotia lacks the attractive interiors of the neighbouring Core, and its connection to Hudson's Bay lacks both attractiveness and convenience of entry. Calgary's downtown retail is dominated by above-ground pedestrian walkways and because of this, a Saks within the downtown Bay could be less than ideal. 

On the flip side, bringing Saks into the Downtown Calgary Bay could bring more shoppers eastward from The Core. A benefit to the location of Downtown Calgary's Bay is that it is located across the street from the upscale shopping strip called Fashion Central, which includes upscale retailers such as Wolford. Saks could be an interesting addition if located across from Wolford at the corner of 8th Avenue Southwest and 1st Street Southwest. Furthermore, Saks could also increase the demand to remodel Scotia Centre to include better retailing, services, access and interiors.

Wolford at Fashion Central, Calgary. Hudson's Bay is visible in the right of the photo. Photo: Google Streetview screenshot

A Saks in Downtown Calgary would join a 147,000 square foot Holt Renfrew store and would compete with a 31,000 square foot Harry Rosen store in the menswear category.

Saks Fifth Avenue, Chinook Centre: 

Hudson's Bay's Chinook Centre store is about 203,000 square feet. A full-sized Saks store would ideally be in the 75,000-130,000 square foot range. Given this, we would expect a smaller Saks shop-in-store at the Chinook Hudson's Bay store, if at all. Chinook Centre will be expanding near the current Hudson's Bay store and from the plans we have reviewed, we don't see an allowance for another anchor store. Chinook Centre is one of Canada's top malls, and next year it will open Canada's first Nordstrom store. The 140,000 square foot Nordstrom will be a huge draw to the mall, and Saks could be a welcome addition as a fourth anchor store for Chinook (joining Hudson's Bay, Nordstrom and a recently opened Target store). 

Hudson's Bay, Chinook Centre. Photo: Google Streetview screenshot

There would be at least two benefits to opening Saks at Chinook. One is the availability of ample parking in a city that loves its cars and has expensive downtown parking. The other is the lack of competition from Downtown Calgary's Holt Renfrew store, which includes some of the same concessions carried at Saks, ie. Louis Vuitton, Chanel, Dolce & Gabbana, and Prada, among others.

Given the affluence, population and low taxes in Alberta, we'd be surprised if Calgary didn't see a Saks location either downtown or at Chinook Centre.