ANALYSIS: SAKS FIFTH AVENUE'S 2nd LARGEST STORE TO REPLACE HBC AT YONGE & BLOOR

/ 44 Bloor Street West, Toronto, ON M4W, Canada/
[Image Source]

On Friday we reported that Saks Fifth Avenue's Canadian flagship would be built at the corner of Yonge and Bloor Streets in Downtown Toronto, replacing a 342,000 square foot Hudson's Bay store. The new Saks reportedly be the second-largest in the world, surpassed only by its 646,000 square foot Manhattan flagship. The surrounding shopping area is expected to be elevated with the new Saks, potentially leading to luxury retailers moving or even relocating Eastward towards Saks on Toronto's Bloor Street. The approximately $100 million that HBC CEO Richard Baker is willing to spend on the store will hopefully help alleviate downfalls with the current space, including low ceilings and awkward access points.  

 Saks' Manhattan flagship has exceptionally high ceilings, creating sense of drama for the store. This is unfortunately not the case for the Yonge and Bloor Hudson's Bay. It has considerably lower ceilings, having been built in the 1970's when lower ceilings were an acceptable trend. We lack knowledge on how to modify low ceilings and we welcome feedback as to if there is any way this could be remedied. The current Bay store, as well, has relatively awkward access points that involve having to take a half-flight of escalators from the street level to the main floor of the store. The store is also awkwardly accessed from the busy subway station level below, and Saks will sit directly above the intersection of the Yonge and Bloor subway lines. It will be interesting to see how the new store will be configured in light of these ceiling and access limitations.
High ceilings are a feature of the Manhattan Saks store [Image Source]

Richard Baker says Toronto's Saks will be "twice the size" of Holt Renfrew's Bloor Street flagship. The retail portion of Holt Renfrew's Bloor Street store features is somewhere in the 120,000-150,000 square foot range, as part of the store's total area of about 185,000 square feet (including storage and other uses). We base this 185,000 square foot estimation on Morguard Properties' website, noting that Holt Renfrew occupies almost 176,000 square feet with the Holt Renfrew Centre. Holt Renfrew also occupies more retail space within the adjacent 60 Bloor Street West building, including about 3,800 square feet of ground-floor space as well as a few thousand more dedicated to personal shopping suites within the office building at 60 Bloor.

 Based on our rough calculations of Holt Renfrew's size, Bloor's Saks Fifth Avenue could occupy somewhere in the 240,000-300,000 square foot range and possibly more, all the way up to the 342,000 square feet of retail space currently occupied by Hudson's Bay. Regardless, the Bloor Street Saks will likely become Canada's largest luxury department store, surpassing the size of the recently announced Ogilvy/Holt Renfrew store to be created in Montreal.
Rendering of an expanded Holt Renfrew on Bloor Street West. Image: Urban Toronto

Holt Renfrew, itself, could expand its Bloor Street premises. Last year we reported that the store was to significantly expand to a size in excess of 200,000 square feet. The project is currently on hold and is expected to see modifications, and we're waiting to learn new details on the store's expansion. 

 The area surrounding the new Saks will undoubtedly be elevated thanks to its new neighbour. The 'luxury zone' of Toronto's Bloor Street West has, lately, been concentrated on Bloor Street between Bay Street and Avenue Road. Holt Renfrew and Maison Birks fall outside of this boundary, both being between Bay Street and Yonge Street. With Saks' arrival east of Yonge Street, as well as new retail being constructed at neighbouring 1 Bloor Street East, we could see more luxury retailers moving eastward towards Saks.
Rendering of retail at 1 Bloor Street East. Photo: Urban Toronto

Lack of retail space on Bloor Street has been a contributing factor to the lack of luxury retail in Toronto in comparison to similar-sized cities like Chicago. Chicago's Michigan Avenue, Oak Street and surrounding streets have seen a continuous influx of luxury retail that arguably surpasses that of Toronto. Sources tell us that one of the challenges brokers are having placing luxury tenants in the Yorkville area is the lack of potential flagship retail space, and that could change as the desirability of Bloor Street's eastern portion is heightened by the new flagship Saks. 

 Next week we'll discuss where some of Saks Fifth Avenue's other Canadian stores could open, in light of this now well-read Globe & Mail article written by Marina Strauss last week. 
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