One of Canada’s oldest family run businesses is planning a huge expansion in the next five years. Right now Simons consists of seven retail locations, with new stores set to open in Vancouver, Edmonton, Ottawa, and Mississauga over the next couple years. By 2019, locations in Calgary, Winnipeg, Scarborough, and in Toronto’s Yorkdale Mall will also have their grand openings.
Simons has been around since 1840, and has survived as a family-run business through five generations. They’ve chosen to stick close to home by staying in Quebec up until very recently, and current CEO Peter Simons says although the plan to expand is ambitious, he doesn’t feel the need to rush into it. According to him, “you don’t think in next-quarter increments when you’re a private company of five generations. You think in 25-year increments.”
The retailer is planning to spend up to $200 million over the next four years, and they expect the expansion to boost their annual sales by more than $350 million. Retail analyst Randy Harris of Trendex agrees that Simons’ gradual expansion has the potential to make it a “national powerhouse” in the Canadian apparel market.
“A lot of retailers, while they’re worrying about Nordstrom and Saks, have got to be equally worried about Simons,” Harris says. Their mid-market pricing and strong private label offering should be appealing to shoppers looking for something new. Simons also sells some home goods, is introducing shoes, and plans to open a new restaurant concept called Eve. But unlike other department stores, they don’t sell cosmetics or larger home goods like appliances and furniture.
It’s been a rough few years for Canadian retailers, with brands such as Mexx, Smart Set, and Jacob closing or reducing operations. There’s also been an influx of foreign competitors trying to enter the market (who can forget Target’s recent crash and burn?). But Simons’ understanding of the specifically Canadian consumer could give them an advantage over American companies.
Online shopping is another big competitor for bricks and mortar locations, and Simons makes less than 10% of its current profit from online sale. They do expect their online sales to grow, but Simons says he doesn’t think shopping online will ever trump the experience of receiving customer service in person. “There’s still going to be this almost primordial desire for human contact, a quality human contact,” he says.
Despite that, another independent retail analyst, Brynn Winegard, thinks Simons should have focused on beefing up its omni-channel offering, which is an industry term referring to the use of stores, its website, mobile apps, and any other possible ways to shop. “We’ve seen a lot of failures in the retail space in the last little while,” she said. “The ones that have had good success really come to life in their online and non bricks-and-mortar space.”
Since Simons is relatively unknown outside of Quebec (although it’s somewhat of a tourist attraction for Canadians visiting the province), their first priority will have to be marketing. The challenge will be keeping shoppers’ interest after the novelty of a new store wears off.
