Attention shoppers: Get ready for a price war on clothing, housewares and other goods as Saks joins a growing wave of U.S. retailers heading north of the border.
With the news Monday that Hudson’s Bay Co. is set to purchase Saks Incorporated for a cool $2.9 billion, analysts say 2014 is shaping up to be the year of the consumer.
HBC says the company will open seven full-line Saks stores in Canada, as well as up to 25 Saks Off Fifth outlet stores, which sell designer threads at discounted prices.
The company says the sale is expected to close before the end of the year, and experts predict that stores will begin opening north of the border next year.
Last year, American luxury retailer Nordstrom announced plans to open its first Canadian store with a location at Calgary’s Chinook Centre in the fall of 2014. The company will also open stores in Vancouver, Ottawa and Toronto.
While Nordstrom and Saks will compete with The Bay, as well as Canadian luxury retailer Holt Renfrew, the outlet stores will be up against new U.S. arrivals Marshalls and Target.
Analysts say the increase in competition will result in not only greater selection for consumers, but also more competitive prices.
“I think there will be quality obviously at the high end and perhaps all levels, greater product selection, and a little push on pricing at all levels,” Steve Tissenbaum of the Ted Rogers School of Retail Management told CTV News Channel. “It will be an exciting time.”
HBC has yet to announce the cities that will be home to Saks or Saks Off Fifth locations. HBC chair and chief executive Richard Baker said Monday the company may turn some Bay stores into Saks locations or perhaps even build entirely new stores.
“We’re going to move as quickly as we can,” Baker told analysts on a conference call.
Shoppers in Canada’s biggest cities will likely benefit most from the push north. Much like the Nordstrom locations, economist Mike Moffatt of the Richard Ivey School of Business said the Saks locations will likely be headed to larger cities.
“Expect to see some Saks stores coming to Toronto, Vancouver, markets like that,” Moffatt told News Channel. “The Canadian retail market outside of border cities is looking really strong.”
But are Canadians ready for a luxury goods boom? Recent retail statistics suggest yes. According to Statistics Canada figures released last week, retail sales in Canada jumped 1.9 per cent in May, five times what analysts had predicted.
Retail sales have remained flat since 2011, and the uptick could be a strong signal that Canadians will welcome a price war with open wallets.
“We’ve been waiting for the recession to come to a big end, for things to pick up,” Tissenbaum said. “So it’s is a good time (for increased competition) because things are getting better. Canadians continue to spend.”
