Saks launching in Canada with Toronto stores
January 28, 2014
Toronto--Hudson’s Bay Company announced Monday that Saks Fifth Avenue will officially enter the Canadian market with the opening of two stores in Toronto.
HBC said it has agreed to sell its downtown Toronto flagship retail complex and Simpson’s Tower to an affiliate of The Cadillac Fairview Corporation for $650 million, which means they will be part of the Toronto Eaton Centre.
The retailer will lease back the space from the company for 25 years, with the option of renewal for just under 50 years, and will open the first Saks in Canada there.
The multi-level Saks store will take up 150,000 square feet, according to the company, while the Hudson’s Bay store will be 600,000 square feet in size. It’s slated to open in the fall of 2015.
HBC has also agreed to lease space in Toronto’s Sherway Gardens, where the second Saks store will be. That location is expected to open in early 2016.
Funds from the deal with Cadillac Fairview will be used to reduce HBC’s debt and invest in growth initiatives. It’s expected to close next month.
Cadillac Fairview is wholly-owned by the Ontario Teachers’ Pension Plan.
“The opening of our first Saks Fifth Avenue stores at Toronto Eaton Centre and Sherway Gardens brings Canadian shoppers the full array of luxury fashion collections and exceptional service for which Saks is renowned,” said Richard Baker, HBC’s governor and CEO. “We especially appreciate Cadillac Fairview’s strong commitment to the Queen Street location and adjacent Toronto Eaton Centre, providing us with the opportunity to be a major part of Toronto’s premier luxury shopping destination.”
Hudson’s Bay acquired Saks Inc. in an all-cash transaction valued at $2.9 billion last summer, indicating then that it would open Saks locations in Canada, as well as more Off 5th locations in the United States.
Other major retailers targeting the Canadian market include Nordstrom, which will also move into the Toronto Eaton Centre in fall 2016 and open five other stores in Canada, and Target, which began opening stores in Canada in mid-March and had 124 stores across the country by the end of the year.