NEW YORK — Holt Renfrew is bucking the depressed department store trend.
Despite a flagging economy, the nine-store Canadian chain is outperforming projections and moving forward on major store expansions. And since taking the shoe business back in-house two years ago, footwear has become a key growth category.
“Our business is still in the infancy stage. … We are still so underdeveloped and underpenetrated that it has worked in our favor during this softening economy,” said Pat Di Bratto, SVP and GMM of accessories, footwear and jewelry. “For spring, we had planned to be down 2 percent, but we are running up 8 percent, so we are thrilled.”
Since taking over the footwear business from Montreal-based Browns in 2007, Holt Renfrew has dramatically expanded its assortments.
“There are many collections that were already on our floor — Gucci, Prada, Manolo Blahnik — but they were not there to the extent they are today,” said Christian Lavergne, senior buyer for women’s designer footwear. “We also added some footwear-specific labels, such as Jimmy Choo, and other designers including Lanvin that we were already carrying in ready-to-wear.”
The retailer also has worked hard to up its exclusive mix. “Some design houses have made a decision to be with us alone is Canada. … We can take them national, and we own the luxury market share nationally,” explained Di Bratto.
“Now we hear from our customers that they no longer have to go to Bergdorf Goodman, to Neiman Marcus. They can find what they need here at Holt Renfrew,” noted Lavergne.
However, the retailer does still compete south of the border. “The high-end American department stores have always competed with us through e-commerce if not through brick-and-mortar,” said Di Bratto. “We create our price architecture to create price parity to the U.S.”
That caused problems last fall, when American department stores went on fire sale. “It did create concern. Some of our customers were calling us to match price, but we were not in a position to match [those markdowns],” said Di Bratto. “We’ve asked the brands to help us in controlling what happens in the U.S. It’s unfair competition to the U.S. retailers and it does touch us in some way.”
Holt Renfrew initially relaunched the shoe floors with more than 70 brands in the flagships, but for fall ’09, it will pare down the number of labels offered. “We have brought in so many brands over the last two years, and some of them still require some growth,” said Lavergne, citing YSL as a label with untapped potential.
The company remains committed to bringing in new designers, although Lavergne admits that bolstering emerging talent can be a challenge. “When we add a new brand, it needs to be able to stand alone,” he said.
Designer Jerome Rousseau found Holt Renfrew incredibly nurturing when it picked up his spring ’09 collection. “They are so supportive and open to new ideas and designs,” said Rousseau. “They really listen to the theme behind a collection and try to recreate that in their assortment. That is so important, especially to a young designer.”
New offerings on tap for this fall include Alexander Wang, Salvatore Ferragamo for Yohji Yamamoto and contemporary label Elizabeth & James.
Contemporary brands have seen increases since business softened, and the Holt team is responding accordingly. “It’s the aspirational customer that we’ve lost in terms of unit sales, and we are wooing her back in terms of price architecture, fashion position and what you would call ‘contemporary,’” said Di Bratto.
“Our contemporary business has gone from being 13 percent of the total to 20 percent,” Di Bratto said. But she was quick to add, “We are not moving away from our luxury position. It’s our DNA.”
Looking ahead, footwear will take center stage in two planned retail expansions. The ribbon-cutting on a new Calgary, Alberta, location will take place in October, where shoes will occupy 140,000 square feet on the first floor. “The Alberta region is where the oil is, and we have a strong customer base there,” said Lavergne. The Toronto flagship is also undergoing a renovation that will significantly grow the shoe department by the end of 2010.
“Although the economy has softened here, we have not been in the same situation as the U.S.” said Di Bratto. “There’s a great appetite from our customer, and it’s exciting for us to be satisfying that.”