If you have not heard of Simons, the Quebec City-based fashion retailer, you are about to hear a lot more. In March, Simons will open its fourth store outside of the province of Quebec just west of Toronto in Mississauga’s Square One Shopping Centre. J.C. Williams Group has been watching Simons ever since they moved onto St. Catherine’s Street in Montreal and blew us away with their brand of fashion and fun. Our Montreal team are regular shoppers and keep us up to date.
This is a company that we really want to succeed in the brutally competitive world of Canadian retailing. They have operated continuously since 1840 and remain family owned and operated. While they do not report their financials, estimates of their current sales are around $300 million; soon to grow to $400 million. While this is a good size, it is dwarfed by competitors like HBC, which reports $4 billion in their traditional department store business.
In the past five years, they have started to aggressively expand and solidify their position in Canada. Simons has had a transactional website since 2010, well ahead of most Canadian retailers, and have moved outside of their home province with thoughtful store expansion across the country. Wisely, they heavily promote the fact that they are Canadian owned and operated—believing that this is meaningful to Canadian shoppers. While we are very optimistic about this company, we recognize that the odds are stacked against them. However, here are some of the positives that we see for them:
- Unique product – they have a strong private label program that caters to various style/price levels from cute/young/inexpensive to a more classic/moderate range. While Simons carries national brands, this strong program and their fashion flair ensures that they have unique products that are relevant to the Canadian shopper.
- Strong Online Business – while they admit this is fast growing but not profitable, a strong online presence is absolutely essential to any retailer that wants to compete. Their expertise online is apparent with a site that is easy to navigate and shop.
- Stores Worth Shopping – this may be their key differentiator and where Simons shows its flair. Simons is committed to taking their stores beyond boring. They feature art installations in their stores that become part of the ambiance for the shopper. While design does not have value without products that are worth buying, it creates an atmosphere in which the customer wants to spend time.
So can Simons survive and thrive? At this point, we believe they have a lot of the important ingredients. However, since they do not publish their financials, it is impossible to tell how productive they are. On the negative side, art installations in stores make their build-outs much more expensive and their relatively smaller size makes profitability online difficult. On the positive side, they are getting backing from bankers who do know their profitability and landlords who are looking to them as a new, exciting anchor. Our money is on them – for now.