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The next level

As rents soar, Canadian retailers look skyward

By Susan Thorne

If you want to see where retailing is headed in Canada, just look up. Main Street retailers are discovering the advantages of having a store on more than one level.

Along Vancouver's busy Robson Street, for example, new two-story retail outlets (ground floor plus a second floor) have proliferated in the past two years, and more are on the way. Banana Republic, Planet Superstar, Armani Exchange, Levi, Marks & Spencer, BCBG, Club Monaco and MEXX are some of the double-decker retailers in this district, said Vera Wynn-Williams, coordinator of the Robson Street Business Association, which represents 250 merchants in three blocks of the busy thoroughfare.

Toronto's Eaton Centre plans to add more streetfront stores on Yonge Street.

"We're a very compact area where rents have soared -- they're probably the highest in Canada," Wynn-Williams said. One recent lease deal for storefront premises on Robson carried a rent of C$180 per square foot, she said. "Because frontage is important and very expensive, retailers have been expanding up."

The fact that many stores are adopting larger formats and want more square footage also is fueling the trend, she added.

"Everybody wants the street exposure and the visibility that goes with it, but they also want the cheaper real estate upstairs," commented Gordon Harris, ICSC's Canadian national chairman for public and community services and a partner in the Harris Hudema Consulting Group, Vancouver. Practical reasons aside, he said, expanding vertically creates visual excitement lacking in a one-story, big-box store.

"When you've got more than one floor, you can look down when you're upstairs, look up from below, or look around at the level you're on -- there are more options than in a big warehouse, where you can't find where you want to go," Harris said.

But making the second floor interesting is a challenge, he pointed out. "You need to create compelling reasons to go there. The merchandise does it, the presentation does it and the animation of the store does it."

Music retailers such as HMV Canada and Sam's (two Toronto-based music chains) as well as Tower were among the first to take the split-level approach in Canada. "These stores have done a great job of drawing you into the upper floors. When you enter from the street, you walk right into an escalator -- they've made it almost impossible not to go up!" Harris explained.

The concept works well for selling music, he observed; a second level enables the store to serve different customer markets by locating classical CDs on one floor and popular music on another, for example.

The showpiece Virgin music store on Robson Street (Canada's only Virgin outlet to date) has given its two-level floor plan a dramatic focus by featuring an in-store radio broadcast studio that is suspended in space above the ground floor. The cantilevered booth lets shoppers watch a disc jockey or performer in action from both floors of the store.

"A multilevel store creates more dynamic shopping and a better shopping experience," said Marcel Proskow, a principal with MAXAM Design International, Calgary, the retail design firm that created the store's look. "It's more inviting and exciting," he said.

But having different levels isn't enough; floor spaces and sight lines must be kept open so people can see what is there, he said, and the store must be "inviting, comfortable and easily accessible."

Proskow said he favors escalators where possible: "People need to see that it's easy to get up, but you can have stairs for coming down." The Virgin store has created further visual interest with its eye-catching open-sided escalator with belts and chains exposed.

Getting the goods

Still, persuading shoppers to go from one level to another may be easier with some types of merchandise.

Music retailers such as HMV Canada find multilevel retailing particularly effective.

"Books are that kind of product -- if an entire subject that is interesting to a customer is on another level, they're motivated to go up or down," said Helena Aalto, director of public relations and investor relations for Toronto-based Chapters. The chain, which is Canada's largest book retailer, has two-level or multistory stores in Ottawa, Toronto and Vancouver.

Nonetheless, Chapters makes conscious use of design to showcase its stores' different levels.

"Sometimes we use an atrium or a big cutout in the floor so that somebody can clearly see that there's a lower level," Aalto said. "The ways up or down have to be very clear and accessible, so customers will understand them quickly when they come into the store."

Many of Robson Street's apparel retailers put men's clothing on the ground floor and women's merchandise upstairs.

"Our philosophy is that women are going to take the time to go up," said Natalie Thelemaque, manager of the MEXX store, a unit of trendy MEXX Canada, based in Montréal. "With men, if access is easy, they may shop, but if not, they're going to leave."

Window displays and signage signal that women's clothes are available, she added.

Split-level or multilevel retailing is also growing in popularity in malls. Harry Rosen, the Toronto-based upscale men's clothier, has added a two-level store in the Calgary Eaton Centre, Proskow said. The recent refurbishing of Place Montréal Trust in Montréal added a large Super Athletes World store (at street level plus two upper stories), a two-level Indigo Books and Music and a new Planet Hollywood, which has a street-level entrance, but has most of the footage on the second floor.

"In a shopping center you get a double advantage: You can front the store on two different streets, so it's two different store locations so far as traffic is concerned," said Richard Talbot, a retail expert with Thomas Consultants, Mississauga, Ontario. But such double (or triple) exposure may not be appropriate to every retail concept, he cautioned. "In the Eaton Centre, for example, you have a lower level that's lower-priced, a middle level that's midpriced and an upper level that's higher-priced."

Retailers with a specific price point, such as a high-end jeweler, have had problems attempting to straddle two or three stories, Talbot said, a reminder that using vertical retail space needs to be carefully and strategically considered.