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TORONTO’S BAYVIEW VILLAGE EXPANDS UPSCALE NICHE

By Susan Thorne

Davids is one of the specialty stores that make up Bayview’s distinctive tenant mix.

While consumer spending is strong these days in Canada, retail’s high end remains a small and highly localized niche.

There is a very limited customer market, for one thing. Not only is Canada’s population far smaller than that of the United States, but it is also more heavily concentrated in the middle-income earnings brackets, with wealthy shoppers making up a much smaller segment of that population, according to information from the J.C. Williams Group, a Toronto retail consultancy. Geographically the market is thin, too: Upper-income Canadians are largely concentrated in the major cities of Montréal, Toronto and Vancouver.

Nevertheless, there is a thriving upmarket retail sector, represented by distinctly Canadian players such as Holt Renfrew in Toronto and Ogilvie’s in Montréal (high-end fashion department stores), and specialty menswear purveyor Harry Rosen Ltd.

One shopping center that serves well-off clientele successfully is Bayview Village in Willowdale, Ontario (a northern suburb of Toronto), owned by the Orlando Corp., a Toronto-based property developer. First built in the 1960s as an unenclosed strip center anchored by a Kmart and a Loblaw’s grocery, the mall was enclosed in the 1970s and has just completed an expansion, adding 100,000 square feet of retail space.

Bayview certainly looks the part of a premium shopping venue, with handsome beige terrazzo flooring and cream-colored marble throughout the spacious, softly lighted common areas. The real secret of this center’s success, however, is a strong sense of its own identity and that of its customer market. Bayview’s target customer is a female shopper over 30 in the C$100,000-plus household income range, probably a resident of the nearby Bridle Path, Rosedale, Forest Hill or Post Road neighborhoods, who shops for herself and her family at the center as often as three or four times per week, spending well over C$200 per visit, according to center manager Anthony Facchini. The center offers these discerning shoppers a gourmet assortment of retail offerings.

“We specialize in new, exciting and unique concepts, whether from the U.S., Canada or Europe,” said Facchini, who describes Bayview as “streetfront shopping with a roof” — a distinctive grouping of shops more like an upscale Main Street than a cookie-cutter regional mall. Some are one-of-a-kind owner-operated businesses like Ricci (jewelry) or Janan (shearling and leather garments), while others carry well-known names such as Rodier (the Paris-based apparel retailer) or Vivian Shyu (a Canadian fashion designer). The cluster of dining options includes a sushi bar and an Il Fornello, a good quality regional Italian restaurant. There are three different spas as well.

While it has some traffic-generating popular banners such as Banana Republic, Bayview generally avoids multi-unit retail tenants in favor of retailers with few or no other Ontario or Canadian locations; chains are usually represented by flagship stores. The Gap store was its first location in Ontario, for example, and remains among its top four in sales volume per square foot nationally. Bayview’s Chapters bookstore ranks in the top three in sales for that brand in the Greater Toronto Area, a center release states, while the LCBO (Liquor Control Board of Ontario) store is the largest wine and liquor outlet in the province. Restoration Hardware’s first eastern Canadian store occupies one of the mall’s new additions, and Shoppers Drug Mart, the leading Canadian drugstore, has its one and only Shoppers Health and Beauty store (a small-format, cosmetics and health-oriented concept).

Toronto’s Bayview Village has carved out a niche in the lower segment of the upper-income bracket.

Bayview has been doing all the right things, according to John C. Williams, president of the J.C. Williams Group.

“I’ve watched Bayview from Day One and I’ve always admired the way they’ve operated, carving out a definite niche in the lower upper-income bracket,” Williams said. “They’ve been leaders in the marketplace.”

Williams said the proactive, hands-on approach of management has contributed to Bayview’s success.

“They’re always upgrading — the tenant mix, the mall, the anchors — and renovating,” he said. Location is also a strong point because Bayview is close to affluent neighborhoods while sufficiently far from Bloor Street — Toronto’s international couturier corridor — to capture the high-end local market, Williams observed.

Fashioning a unique and properly positioned merchandise mix involves significant effort for Facchini, who works with retailers to achieve the best store design and concept for his center. Stores typically have one-of-a-kind decor and fittings; even the chain tenants are tailored to the upmarket ambience, like the A&W burger outlet that has been styled with a retro diner look. Some retailers have created special one-off adaptations of their concepts and merchandise just for Bayview, such as the Bocci shoe chain’s store carrying the name Sofia, and the Atelier Sandra Angelozzi apparel store, which is in fact owned by French fashion chain Femme de Carrière. Bayview maintains exclusivity with a radius restriction in the terms of leases, which prevents tenants from locating in competing shopping areas. Two regional malls, Fairview and Yorkdale, are located within three miles of the center.

Bayview’s C$25 million renovation, which expanded some existing stores and added new tenants, has paid off handsomely, with double-digit sales increases in comparable-store sales for women’s wear, without adversely affecting tenants who were there before the expansion, Facchini said. Some individual merchants have experienced seismic sales jumps: the LCBO, which expanded from 10,000 to 25,000 square feet, has seen year-over-year sales more than double. The mall is now approaching annual sales of C$700 per square foot overall and C$800 per square foot for ladies fashions.

Not even the threat of economic slowdown can rain on this parade. A recession or downturn is unlikely to affect the truly affluent, Williams opined, though it might affect the segment of society that has become newly wealthy on the real estate or stock markets. “Those in the highest income brackets are less vulnerable [to economic cycles] than people think.”

 

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