MARKET WATCH

New Holt Renfrew posting big gains
Sales in several departments see sharp rise
By Lisa Schmidt, Calgary Herald
September 24, 2010

Calgary's Holt Renfrew may still be riding some new store buzz, but the retailer's top executive says service brings customers back.

And apparently in droves, as Mark Derbyshire cites a list of big gains across several of its lines in the downtown location, which tripled the size of its old store when it opened a year ago.

Jewelry sales -- bolstered by its chain-leading Tiffany boutique -- up 44 per cent. Watches are 67 per cent higher.

Women's shoes, now showcased in a prime main floor location, are up 64 per cent.

"We're seeing terrific increases," Derbyshire said in Calgary on Thursday.

He is forecasting double-digit comparable store sales improvements heading into next month.

"That's where we're trending today. The people of Calgary have truly welcomed us well in this facility."

Holt Renfrew will mark its one-year anniversary of the new Calgary store with a gala on Oct. 8 -- an event headlined with a visit by Los Angeles socialite-turned-designer Nicole Richie, kicking off a month of special events.

Holts' opening was among a raft of big name brands to set up or expand in Calgary over the past couple of years, banking on a quick rebound from the economic downturn.

This year, Holts finds itself in the company a new downtown Brooks Brothers store, plus the addition of a greatly expanded Harry Rosen store, which opened earlier this month.

Business is expected to be brisk in that category, say some market watchers.

"You've got the value retailers at one end of the spectrum doing really well, and you have the luxury and high-end retailers thriving," said Mike Kehoe, retail specialist with Fairfield Commercial Real Estate.

"The money is out there; there's a lot of disposable income."

And that is likely to keep attracting new retailers.

"A lot of these guys haven't ever been here, they've always been in Vancouver, Toronto, Montreal and now they've kind of now discovered Calgary," said Rob Walker, a Calgary-based commercial realtor specializing in retail for Colliers International.

But that new competition doesn't faze Holts, which first opened in the city in 1953. Derbyshire, who took over the top position eight months ago, said the retailer sets itself apart with high-end service to match its high-end style.

"Relationships are the backbone of any business," he said.

And the store continues hiring more staff, including seven new "roving concierges" -- known as Holts hosts -- to help guide shoppers through the Calgary store.

Staff now sport a bright magenta name badge, helping foster that personal service, he notes.

"You come in because it's all new and it's exciting, but how do you maintain that?" Derbyshire said.

"It's a list of many things that create that extraordinary experience . . . what brings you back in the future is still the exciting and world-class product that has been hand-selected for the people of Calgary."

"We buy this store with Calgary in mind, how Calgarians want to dress and how they embrace fashion."

FAST CARS, LUXURY GOODS & STUNNING HOMES

The rich return

Luxury shopping is making a comeback
Daniel Gross, Slate.com
Published: Monday, May 31, 2010

Are the rich coming back? Just in time for Sex and the City 2, there are signs that the orgy of luxury shopping that made the latter years of the credit bubble so much fun are back.

Item 1: fancy food. On May 20, "Breaking Views" columnist Rob Cox said that "the corridors of wealth and finance are alive with new optimism." His main tell? Whole Foods reported a solid quarter, "the best we have reported in several years," as CEO John Mackey put it. Same-store sales were up 8.6 percent, and Whole Foods boosted its outlook for the whole year. The stock price has doubled in the last year.

Item 2: fancy homes. "Luxury Sales Bounce Back," screams the headline in a Friday Wall Street Journal article about high-end residential properties. In both San Francisco and Manhattan, the Journal reported, the number of homes that sold for more than US$2 million in the first quarter of 2010-49 and 402, respectively-was higher than the comparable 2005 figures.

Item 3: fancy stuff. On Thursday, Tiffany reported an excellent first quarter, with global sales up 22%. Much of the growth was driven by Americans' newfound discovery of the allure of the pale blue boxes-and the overpriced metal bits that are stuffed inside them. "Sales in the New York flagship store rose 26% and comparable Americas' branch store sales increased 13%. Internet and catalog sales in the Americas rose 23%." A few blocks south on Fifth Avenue, Saks reported that after seven straight quarters of decline, same-store sales finally rose in first-quarter results, up 6.1%. Total sales were US$667-million. At Nordstrom, same-stores sales in the first quarter were up 12% from the first quarter of 2009, and net sales came in at US$1.99 billion, up 17% from the year-before quarter.

These data all point to signs that the rich may be back. But back from what? The Whole Foods-$2 million condo-Tiffany-Saks-Nordstrom crowd has experienced a reflation in assets, net worths, and egos. (If sales of Botox and cosmetic surgery start to rise, this reflation will be evident elsewhere.) But the same-store sales figures may be somewhat misleading. The truly rich never went away, even during the depths of the recession. And these big luxury brands don't just cater to billionaires and hedge-fund magnates-there just aren't enough of them to support hundreds of stores. No, the shoppers who enabled mass luxury marketers to thrive were the not-quite-rich, the coastal $250,000-plus earners who deny they're rich, the haute bourgeoisie who frequently act rich, and the not-at-all-rich who used home equity and credit cards to fake it at certain stores. While they may have emerged from their stunned, locked-down stupor, these consumers are not at full strength.

Tiffany's sales were $633.6 million in the first quarter, about what they were in the first quarter of 2007. At Saks, sales in the first quarter of 2010 were still down 23% from the first quarter of 2008. Neiman-Marcus reported that sales in its most recent quarter bounced back, but they were still 19 percent below the sales figure from the 2008 first quarter. And so on. For home values and high-end retailers-as for the stock market-2007's results may represent a high-water mark that won't be surpassed for several years.

In order to return to full financial health, these companies will have to convince their core audience of the anxious affluent that it's OK to blow US$130 on organic vegetables or US$475 on a pair of shoes. And while the economy is growing, many of the affluent are still anxious-about their volatile retirement investments, about job security, and about home values. They're feeling much better than they were in 2009. But it may take another year or two of solid growth, market gains, and healthy bonuses before they start to party like it's 2007.

Photo By: Minimalist1