Holt Renfrew & Co. management is not sitting idly by folding cashmere sweaters while U.S. competitors Saks and Nordstrom roll into Canada over the next two years. Canada’s biggest luxury retailer, in the midst of expanding its retail footprint by 40% by 2015, just announced it will open its first men’s standalone store in Toronto this fall beside Harry Rosen on the city’s tony Bloor St. strip. FP retail reporter Hollie Shaw spoke with Holts president Mark Derbyshire at the launch of the retailer’s newly expanded Yorkdale store in the city’s north end about the looming luxury war, the importance of superior customer service, and the long-awaited launch of the company’s e-commerce website.
Q We have seen how heavily an explosion in grocery square footage has pressured food retailers in Canada this year. Do you think something similar will happen on the high end when Saks and Nordstrom open here?
A I think it’s an exciting time. I do think [the luxury market is growing]. Luxury is not new to Canada. Many of our brands have been here for decades and there has always been competition. Our core customer is a customer that is very well travelled. Whether the competition is in the boutique down the street or the cities where they travel. There has always been lots of competition for that top customer of ours.
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Q If people have any criticism about the current business, it’s that you cannot buy merchandise off of your website and the selection on there for browsing is limited. With companies like Net-à-Porter taking market share and the growing presence of international luxury retailers and brands online, do you feel pressure to do the same? Are you going to launch a sales website this year?
A [Smiles] This is yet another story. We want to launch it in the right way. In terms of its relevance to our business, it’s very important to us. What customers are interested in is an experience — something that is all about luxury, style, fashion. They want to leave that site not only fulfilling a transaction, but feeling better for the time they have spent on it. That’s a big challenge in today’s world. The [online] team we have assembled is a fantastic team. It is going to be one of the most innovative sites I can imagine. I am building up high expectations, and that’s good.
Q You are undergoing vast changes in your stores, offering multiple new in-store boutiques and services as part of your expansion. What strategy was behind the service?
A It’s all about us creating an intimate shopping experience with [store within a store] boutiques. We designed this not to be a department store — when we built our strategy it was really all about us departing from being a big-feeling shop. We wanted the intimacy. Everything we do focuses on how you look and feel. Yes it’s about selling product, but more importantly it’s about how you feel. Four years ago, I wanted us to create a strategy that was going to guide us over the next five to seven years. I met with over 100 customers one on one. We had focus groups. I met with those that loved us and I met with the skeptics to get a sense of how they were all seeing things. As part of that strategy, we always anticipated an expansion of competition. We knew the world would get more competitive, not less. This is the first Paul Smith shop in all of North America. We are leading vendors into some of these spaces.
Q So new in-store free services — complimentary shoe shines, complimentary facials for women — that is presumably about making customers feel good. Do you think it translates to higher revenue?
A Absolutely it is a positive. For [the customer] it is about the experience. There’s a service — you feel like you have been pampered, you feel like you have treated yourself. But it’s about you feeling great — that’s why we don’t charge. If a transaction comes out of that, obviously we’re in business. Transactions come as a result of a relationship. I think this lets us start to build a relationship with you. And when you have a need for something, you are going to go to a place where you have a relationship. [As a retailer], you have got to be very serious about those relationships. We launched a cobbler in store here for men and women to stretch their shoes, or repair shoes or weatherproof shoes while they do their shopping. It goes to taking good care of good things; if it’s a great pair of shoes, it’s how to keep them looking great. You just feel good.