The Hudson's Bay Company could soon be "brown bagging" it.
According to the Globe and Mail, HBC may be introducing the Bloomingdale's brand to Canada as early as this fall.
If the deal comes to fruition, Bloomingdale's, a high-end American retailer known for its popular brown shopping bags, wouldn't be a stand-alone store, but rather a store within select Bay locations.
While both companies are staying mum on the matter, shoppers that Global National correspondent Christina Stevens spoke to Tuesday felt it was a winning move.
Analysts agree, saying the Bloomingdale's brand could lure more shoppers into The Bay, and as a result, the latter would rise above competitors.
"I think it's a pre-emptive strategy to test Bloomingdale's in Canada, and it's almost a risk-free strategy," says Ken Hardy of Western University's Richard Ivey School of Business in London, Ontario.
"The Bay now has to protect itself because they've got a strong competitor on the lower end with Target, so they might as well get in on the upper edge with Bloomingdale's."
Don Gregor, the national vice-president at Aurora Realty Consultant says this is the beginning of a trend. "The Bay is starting to do this. They are starting to shop the market for the best in foreign retailers, and they are now a house for other retailers to come into," referring to The Bay adding Britain's Topshop as fashion boutiques in some locations.
Gregor also says some of The Bay's flagship stores are too large. The addition of Topshop — and possibly Bloomingdale's — help fill up the floor. "Will we see big anchors become mini-malls within the mall? I think so — it makes a lot of sense."
"The Bay and the owners of The Bay are sitting very pretty. They have fantastic real estate from coast-to-coast and they could invite other brands to come in. Could they sublet 100,000 square feet to any of the American players? Absolutely," adds Gregor.
"There are a lot of international brands we never hear of. There are fantastic brands in Spain, in the U.K.... Would they come over here? Possibly."
A water-resistant, plastic, reusable version of luxury retailer Bloomingdale's famous 'Little Brown Bag.' Photo courtesy of Bloomingdale's.
Bloomingdale's, which sells clothes, shoes, fashion accessories and home goods, could also fill a shopping void in our country. "There is a gap in the fashion market where The Bay is positioned, and where Holt Renfrew is positioned, so adding a Bloomingdale's store within a store will help fill that gap," says retail analyst John Winter.
All this speculation comes as other American retailers look to expand to the Great White North, thanks to our better economy and strong retail sales. J. Crew, Victoria's Secret, Crate & Barrel, Bath & Body Works, and Marshalls have all recently set up shop in Canada to much fanfare.
The news also comes just before Target gets ready to open in Canada. Many HBC-owned Zellers locations are closing this year to make way for the popular American discount retailer in 2013.
And this could be the beginning of a retail revolution in Canada. "It's not just Bloomingdale's. It's Neiman Marcus, it's Nordstrom, it's Macy's, it's everybody. They are all looking at Canada as an opportunity to expand their market," says Gregor.
However, the lack of prime retail real estate in Canada has proved to be an obstacle for some American retailers. "If they are going to come to Canada, all these players have to find real estate and that is very difficult to do in Canada," Gregor adds.
"They need 150,000 to 200,000 square feet, and they can't find that in a Canadian mall."
But vacancies are on the way. In March, Cadillac Fairview Corporation Limited, which owns 25 Canadian shopping centres, paid Sears $170 million to end the leases of three large stores. This has fuelled speculation an American retailer — specifically Nordstrom — would take over the spaces in Vancouver's Pacific Centre, Calgary's Chinook Centre and Ottawa's Rideau Centre to open its first Canadian stores sometime next year.
Sears is expected to vacate these properties by the end of October, two of which used to house Eaton's.
While all the competition could be tough on smaller retailers, it could be good for consumers, Winter says. "Because everyone improves, because their competitors have to pull up their socks and do better too."
Hardy adds, "We have this wealthy upper-end segment (of the population) who has not been hurt by the recession. And so, I think there are people eager to see this brand that we haven't had."
Hardy also believes jobs will be added with new retailers coming in.
Bloomingdale's is owned by Macy's Inc., which also runs Macy's, a chain of more of than 800 department stores in the U.S. Macy's is likened to an American version of The Bay.
Bloomingdale's, which touts itself as being "like no other store in the world," has 41 locations in the U.S., and one in Dubai.
HBC, Canada's oldest company, recently completed its acquistion of Lord & Taylor, America's oldest department store. The upscale specialty retailer has about 50 locations across nine American states that compete with Bloomingdale's, though Lord & Taylor's prices are lower. There are 92 Bay locations in Canada. The conglomerate operates specialty retailer Home Outfitters as well.
HBC also runs Fields, a chain of 167 small, value-priced stores, but the company announced in February that they would be shutting down this fall. However, it was coincidentally revealed Tuesday that FHC Holdings Ltd. of Vancouver would purchase 57 of these stores. Fields is mostly located in rural Canada.
Follow Christina on Twitter: @StevensGlobal
The Nordstrom store in Alderwood in Lynnwood, Washington in June 2011. Photo by Herman Chau, Global National.
The Macy's store in Alderwood in Lynnwood, Washington in June 2011. Photo by Herman Chau, Global National.
The Target store at Bellis Fair Mall in Bellingham, Washington in August 2011. Photo by Herman Chau, Global National.
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