Winnipeg Retail

[esquire]

^ Oh boy, let's drive out to Kenaston and go shopping!

[CoryB]

Outlet malls often have stores for specific brands, ie Adias, which you can find easily in other stores however there is often not a dedicated store for that brand locally. There are also some stores that only exist in outlet malls but most of the product exists elsewhere with the kitchen stores coming to mind. Add in that most "outlet" stores actually have product specifically made for them, often with some compromises to keep the cost down, which is not available elsewhere. For example, Coach "outlet" purses would have less intricate designs and lower quality of materials. This isn't to say the products are trash but a well informed consumer could spot the differences.

And if you are not liking the idea of Outlet of Seasons, just hope that this one being in the lead puts the ice to the other three outlet mall projects in different stages of development for Winnipeg.

[esquire]

^ Good point, maybe this will be the outlet mall to end them all in Winnipeg. The fact that it is actually in the city is a small win I suppose, considering that in most places they tend to locate clear out of town.

It just all reminds me of the late 80s in Winnipeg when a ton of shopping space was built (mostly neighbourhood and regional mall expansion) only to see them all get clobbered when the early 90s recession hit. It ended up being the end of the line for a bunch of malls including Unicity, and some like Garden City, Northgate and nearly all of downtown Winnipeg's retail areas have been floundering ever since.

[buzzg]

Originally Posted by CoryB

Outlet malls often have stores for specific brands, ie Adias, which you can find easily in other stores however there is often not a dedicated store for that brand locally. There are also some stores that only exist in outlet malls but most of the product exists elsewhere with the kitchen stores coming to mind. Add in that most "outlet" stores actually have product specifically made for them, often with some compromises to keep the cost down, which is not available elsewhere. For example, Coach "outlet" purses would have less intricate designs and lower quality of materials. This isn't to say the products are trash but a well informed consumer could spot the differences.

And if you are not liking the idea of Outlet of Seasons, just hope that this one being in the lead puts the ice to the other three outlet mall projects in different stages of development for Winnipeg.

Originally Posted by esquire

^ Good point, maybe this will be the outlet mall to end them all in Winnipeg. The fact that it is actually in the city is a small win I suppose, considering that in most places they tend to locate clear out of town.

It just all reminds me of the late 80s in Winnipeg when a ton of shopping space was built (mostly neighbourhood and regional mall expansion) only to see them all get clobbered when the early 90s recession hit. It ended up being the end of the line for a bunch of malls including Unicity, and some like Garden City, Northgate and nearly all of downtown Winnipeg's retail areas have been floundering ever since.

I agree with both of you actually. I'd love to see Seasons/Outlets do well enough that not all the other power centres there can survive anymore and the hand has to be readapted... maybe more condos or something.

[CoryB]

Outlets at Season is more a threat to new retail that existing retail, at least on my read of things. The bigger risk to the Kenaston retail center is the impending closure of the Safeway or Sobey's without a clear replacement other than Save On Foods. The entry of Save on Foods might actually prop up some of those Safeway/Sobey's cross the street setups in a bid to keep out competition. That said, Safeway of old was willing to shutter stores and continue to pay landlords if they had a compelling reason to such as the long labour dispute in Thunder Bay.

[cllew]

Don't even have to go to Thunder Bay to see Safeway freeze a location. Safeway did that with the store on Portage and Westwood after they closed it when the new one opened up at Portage and Cavalier.

The Safeway store on St. Mary's Ave and Dunkirk that was closed when the St. Vital Safeway opened and was converted into one of the Safeway Wholesale (Macdonalds Consolidated) Family Foods locations to keep that location from going to a competitor.

[horrorbro123]

Laura Will Be Closing Polo Park St Vital Centre And Kenaston Boulevard Next Month On September 13th

[cllew]

Laura could not get a rent reduction from Cadillac Fairview for the Polo Park location? They were going to close 20 locations and ask for rent reductions for another 26 locations.

CF was reported to be lending the chain a few million to keep it going for the next fashion season so I would have thought they would want to keep the stores in their malls open.

[laumag]

Originally Posted by cllew

Laura could not get a rent reduction from Cadillac Fairview for the Polo Park location? They were going to close 20 locations and ask for rent reductions for another 26 locations.

CF was reported to be lending the chain a few million to keep it going for the next fashion season so I would have thought they would want to keep the stores in their malls open.

I bought a pair of jeans at Laura Plus Polo Park and was asking the Manager what the future held for them. According to the Manager, this store will remain open since it is the only plus size store in the mall and they were waiting for their 2015 Fall items to arrive. The atmosphere was not one of gloom and doom. Polo Park is the only property owned and managed by Cadillac Fairview in Manitoba.

[CoryB]

Originally Posted by Globe and Mail

Mall owner Cadillac Fairview, which housed 39 stores owned by the company, has agreed to provide up to $10-million in restructuring financing, which will help Laura’s to purchase clothes for the fall season.

Source

It seems doubtful that Cadillac Fairview would provide a loan and have them closing stores in their properties, especially the tenant starved Polo Park. Care to cite a source that the Winnipeg locations are closing?

[DMitch]

Hey folks -

Long time lurker, first time poster; huge Canadian retail buff.

I've found the documentation that Laura's restructuring team forwarded to the courts. Really interesting stuff. Seems like they suffered through a few seasons of poor merch that didn't resonate with their customer base; realized it and were working to turn the boat around.

Their key lender (Salus) is American based and has been incurring substantial losses and is actually in the process of liquidating their loan portfolio. To the point where they were in the process of lining up liquidators to dispose of Laura's assets before Cadillac Fairview and other lenders stepped up to see what could be done to stabilize the business.

Laura's contesting this in the courts, and with Cadillac Fairview's support is working to restructure.

Cadillac Fairview's $10 million is subject to a court issuance for an 'interim financing charge.' If all terms are approved then CF will basically advance them a life-line; ensuring payment of fall merchandise that's already been designed / produced / is on the water from Asia.

CF has long associated with Laura; I and from the looks of the court docs, I can't see them wanting to be involved with any of the locations that are going to be closing (unless there are a couple of dogs that are deemed not viable). I can see the 46 leases affected (20 store closures / 26 requests for reduced rent) hitting the likes of Rio-Can / Smart Centres / etc.

It will be really interesting to see how this plays out. They do fill a void in the market - but really for how long is anyone's guess. They've stumbled in recent years and haven't been able to differentiate themselves enough from a lot of the international competition that's arrived or is in the process of setting up shop in Canada (White House | Black Market, Lane Bryant, Chicos, etc.).

Docs below:

http://www.kpmg.com/Ca/en/services/A...tial-order.pdf

[CoryB]

Laura took over the distressed Liz Claiborne locations into the Winnipeg location on Kenaston when that chain exited the Canadian market. It would be surprising to see a number of those same locations on the list of 20 closures and 26 rent reductions they are seeking.

Also in some other geographic locations Laura has a far higher stores per population rate than Winnipeg so it would make sense to look for savings there.

It would truly be odd to see CF fronting the financial cost of their restructuring while also taken on the burden of their location closures. We have covered it many times before, Polo currently has too many unleased units and increasing that count is going to put strong downware pressure on rates there.

[Simplicity]

Originally Posted by CoryB

Laura took over the distressed Liz Claiborne locations into the Winnipeg location on Kenaston when that chain exited the Canadian market. It would be surprising to see a number of those same locations on the list of 20 closures and 26 rent reductions they are seeking.

Also in some other geographic locations Laura has a far higher stores per population rate than Winnipeg so it would make sense to look for savings there.

It would truly be odd to see CF fronting the financial cost of their restructuring while also taken on the burden of their location closures. We have covered it many times before, Polo currently has too many unleased units and increasing that count is going to put strong downware pressure on rates there.

It's really not that odd when you look at CF's stake in this. If Laura pulls all their stores immediately, you've got lots of vacancy and no cash flow. On the other hand, if CF provides the DIP, they get to pay themselves rent from it and immediately go to the front of the line if the liquidation ultimately occurs. I actually see this as a smart move from CF, but I don't see anything altruistic about it. They want to make sure that the rent doesn't go unpaid as the restructuring occurs. In the meantime, they'll be privy to the ins and outs of the restructuring that lets them know if they should be seeking alternative tenants or holding on for an actual turnaround.

[vjose32]

I think the solution to Laura's rent reduction is easy. Why have 3 different stores in a mall, why not just one? They would save lots by only renting one location instead of 3.

Just came across a fast food chain called Mary Browns, there was talk of them coming to Manitoba 3 years ago and so far nothing. Anyone know anything?

[pegcity]

Originally Posted by vjose32

I think the solution to Laura's rent reduction is easy. Why have 3 different stores in a mall, why not just one? They would save lots by only renting one location instead of 3.

Just came across a fast food chain called Mary Browns, there was talk of them coming to Manitoba 3 years ago and so far nothing. Anyone know anything?

I passed by it months ago, spring time I believe, there was a "Mary Browns Coming Soon" sign on a window in the Kildonan Crossing strip mall (Safeway, Dollar Tree, Royal Fork Buffet). I passed by it again in July and the sign is still up, can't see any progress, all the windows are covered up with the coming soon signs.

They also had news about franchise opportunities for Carl's Jr in Winnipeg couple of years ago. Ontario has a few, BC, Calgary and they just opened up a franchise in Saskatchewan.

Qdoba recently opened up a 2nd location in the Kenaston Smart Center across from Safewy and Home Depot.

[buzzg]

Originally Posted by pegcity

I passed by it months ago, spring time I believe, there was a "Mary Browns Coming Soon" sign on a window in the Kildonan Crossing strip mall (Safeway, Dollar Tree, Royal Fork Buffet). I passed by it again in July and the sign is still up, can't see any progress, all the windows are covered up with the coming soon signs.

They also had news about franchise opportunities for Carl's Jr in Winnipeg couple of years ago. Ontario has a few, BC, Calgary and they just opened up a franchise in Saskatchewan.

Qdoba recently opened up a 2nd location in the Kenaston Smart Center across from Safewy and Home Depot.

Qdoba is delicious... for sure my favourite new fast/fast-casual chain to enter MB in recent years.

EDIT: Ok, forgot about Freshii now.

[wags_in_the_peg]

Qdoba is good, agreed (but not as good as Burrito Splendido)

[CoryB]

Heard that Qdoba has a plans for multiple locations over a staged rollout.

[h0twired]

Originally Posted by wags_in_the_peg

Qdoba is good, agreed (but not as good as Burrito Splendido)

Agreed.

For me it goes...

- Burrito Splendito (love their fresh tortillas)
- Burrito Del Rio (best salsa in the city)
- Qdoba

[esquire]

WFP story confirms that Simons is looking for space in Winnipeg... Polo Park, St. Vital or bust. From the sounds of it, nothing is imminent but they're paying attention.

http://www.winnipegfreepress.com/bus...323173841.html

It does appear that a lot of retailers will only consider those two malls for new locations... I'm sure this limits the number of new retailers that enter the local market, but then again it's not as though we're badly underserved in that regard.