Simons reaches out across Canada with $200-million expansion plan
|Montreal Gazette 19 Jun 2015 at 13:51|
Founded in 1840 by John Simons as a dry goods store in Quebec City, it found a new calling in 1952 in fashion. Now, Peter Simons, the fifth generation family member to lead the company, is taking the business across Canada.
Simons intends to roll out at least eight new stores over the next three years or so, from Vancouver to Ottawa, with an investment of about $200 million.
It’s a heady expansion plan, and one that does involve risk, Simons said in an interview in a small, windowless office at the downtown Montreal store. Quebec City remains the headquarters for the company.
Tall and personable, wearing a slim Tiger of Sweden suit and dress shirt and tie from one of the store’s in-house brands, Simons exudes calm confidence even as he speaks of risk and a ruthless retail environment.
“It’s a big push. It’s a big risk. We’re trying to build a national brand,’’ Simons said, adding no private retail chain has done it in decades. “We’re not kidding ourselves — we’re going up against the best of class.”
The family-owned company currently operates nine stores, all in Quebec, except for one at West Edmonton Mall, which opened in 2012. Peter Simons is CEO; his brother, Richard, is vice-president, merchandising.
Next up, in August, is the opening of an 80,000-square-foot store at Les Promenades Gatineau, to be followed in fall by a bigger store in West Vancouver. Then in 2016, Square One in Mississauga and Ottawa’s Rideau Centre are set to open. For 2017, Alberta is in the cards, with The Core in Calgary, and Londonderry in Edmonton. And more Toronto area stores follow, with dates to be announced, for Scarborough and tony Yorkdale mall.
Backing up the investment are the Bank of Montreal and Banque Nationale, Simons said.
There is no public offering or foray into the U.S. in sight.
“This would not be happening,’’ he said of expansion without the banks. “We’re trying to stay private.”
Revenue for 2014 was in the $300 million plus range, he said, with projections for $400 million plus in the next year or two.
Simons acknowledges the intense competition in retailing, with no end in sight to new players. New or coming soon are U.S. department stores Nordstrom and Saks, and fast fashion retailers COS, a division of Swedish H&M, and Japanese Uniqlo.
“Sure, it’s competition. It’s a ruthless environment,’’ he said.
“We’re trying to create a unique proposition that fits in, that offers something different. “We’re going to do it through our store environments, and also through social and interpersonal experience.
“And we have a unique assortment that I think we can continue to strengthen. People are sophisticated today — they shop across the spectrum.”
Simons’ bustling fashion floors are said to be like Boxing Day: shoppers seem drawn in by nine well-priced house brands — trendy Twik for young women, Icône for urban chic, polished menswear with Le 31 and Maison Simons for home, among them — as well as international contemporary and designer brands. About 40 to 50 designers and the same number of buyers keep the assortment fresh.
Maureen Atkinson, an analyst with J.C. Williams Group in Toronto, says the word in retail circles is that “they’re blowing it away.”
“The landlords love them,’’ she said. That’s because mall owners make premium rents on premium sales per square foot. Atkinson added Simons is being welcomed or courted by malls that want to distinguish their properties.
“Their stores are outstanding in terms of being well designed,’’ she added. And the product mix is different.
“Obviously, it’s all new for consumers,’’ Atkinson said. “It’s this hot new store.”
Asked about his company’s edge, Simons had a similar point of view, listing store design, unique product mix, but also community engagement.
Each store is unique, Simons said, and draws on local artists for effect.
“It’s fair to say, humbly, we’ve always been very attentive to the architecture and the environment of our stores,’’ he said.
The second edge, he said, is that his is a private family Canadian business.
“It’s going to let us deliver better service — to play out our role in the community in a unique way,’’ he said.
“Everyone wants to come to Canada to do business, but no one wants to be a citizen here.
“Companies are part of the social fabric and implicit is what I call a social license to operate.”
Being a citizen, he says, means the company supports institutions like orchestras. In Vancouver, it is working with Douglas Coupland for a 40-foot installation in the store tentatively called Bow Tie as well as with Salish Nation artist Jody Broomfield and artist Bobbie Burgers.
“These are efforts that enrich the community. Companies have a role to play in supporting artists,’’ Simons said.
In Quebec, Simons has collaborated with designers Denis Gagnon and Philippe Dubuc, issuing special collections. Next up is a small collection with graphic designer Jill Lecours on calligraphy pieces that will go across the country.
Simons is also undertaking an environmental audit of the business, and is “hoping to make unique choices — not obvious choices for public companies to make.”
He does not consider Simons a department store in the classic sense. “We’re a larger scale specialty boutique,” he said. Indeed, shoes are few, though a growing business in the newer stores, and cosmetics and “hard goods” are not part of the mix. A restaurant concept called Ève is being introduced, however.
“It’s about space and priorities, and trying to keep your focus,’’ Simons said.
The maximum number of stores Simons sees in Canada is about 20, perhaps 25, and he does not envision larger surfaces than the current 100,000 square feet maximum selling space.
“There’s a limit to how much you can do. It’s not like in the old days. We’re not building stores on every street corner.”
Web sales are growing rapidly, but not over 10 per cent yet, he said. Simons sold $800 its first day on the web, in 2010, “so any number over that is magical to me.”
“The web isn’t a new channel. It’s a basis for providing service to customers. We’re really going to experiment much more diligently with how the stores and web integrate together,’’ he said, adding in 24 months all employees will have iPads to access information about products.
Of course, performance for the company has been best in Quebec, and Simons says he is not looking for better numbers elsewhere.
With 175 years in Quebec, he said: “All the sort of good will and relationships you’ve built up, you just don’t replicate that, you build that.
“We have a lot of work to do. My job is to keep our feet on the ground and stay very humble.
“We’re a private company, we’re trying to build a national brand.
“We’ve been here for five generations. I’m hoping we’re going to be able to leverage that to make a difference.”
Peter Simons, CEO of La Maison Simons, poses for pictures in the downtown location in Montreal on Tuesday June 16, 2015. Peter Simons is the fifth generation member of his family to head up the business, founded in the Quebec City area in 1840. The fashion specialty chain is expanding across Canada. (Allen McInnis / MONTREAL GAZETTE)
Allen McInnis / Montreal Gazette
On the next big thing in fashion:
“I think there’s a move toward more responsible consumption, it’s going to be better quality, more thoughtful consumption.
“There is artisanal work going on. There is a new economy being born in Brick Lane in London, in Brooklyn. Artisan is big loaded word, but it is certainly a different perspective to business, and scale and story.”
On bricks and mortar:
“I love bricks and mortar because I like people. And people get together in a bricks and mortar environment. Right now, we’re in a period when there’s a new equilibrium coming.”
On Montreal fashion designers and shows:
“We have some great talent in Montreal — but the fashion shows were not always workable for the professionals. I was hoping to buy, but with thousands of people to see globally, you can’t sit there for half a day to see three collections.
“Maybe there has to be a little more attention on the professional side.”
On what makes a good shopping experience:
“There’s some magic in the end. It’s a combination of factors. I continue to believe in the physical environment as a base. It’s tough for stores to execute. People like a sense of discovery.”
On being a private company:
“A public company works with other people’s funds. When you’re doing something with your own resources you consider all aspects, not just shareholders. I hope we’ll build something better.”
THE SIMONS STORY: A TIMELINE
1840 — John Simons, son of Scottish immigrant Peter, opens a dry goods store near St. John’s Gate in Quebec City.
A shot of Simons on Côte de la Fabrique in Quebec City, taken in 1952. Courtesy Simons
1870 — The store moves to its current location on Côte de la Fabrique in the Upper Town.
Simons on Côte de la Fabrique in Quebec City. COURTESY SIMONS
1952 — Donald Simons takes over the business, and transforms it into a fashion store.
1961 — Donald Simons buys a field in the suburb of Ste-Foy from Steinberg’s grocery store magnate Sam Steinberg. It will be the site of the Simons store at Place Ste-Foy.
1960s — In-house brand Twik is born, modelled on Twiggy, Brigitte Bardot and Françoise Hardy. A designer department called Contemporaine is opened, with fashions from Lanvin, Cardin and Courrèges.
Pant fever in an ad for Simons in 1965. COURTESY SIMONS
1981 — A third Quebec City store opens at the Galeries de la Capitale.
1999 — Simons ventures into the Eastern Townships and then downtown Montreal, at the site of the former Simpson’s department store. Donald’s sons, Peter and Richard, spearhead the expansion.
Shoppers walk into Simons on Ste-Catherine St. W. in Montreal on Tuesday, May 5, 2015. The retail landscape on Ste. Catherine St. is changing. (John Kenney / MONTREAL GAZETTE)
john kenney / Montreal Gazette
2000s — Growth continues with new stores at Promenades St-Bruno and Carrefour Laval, as well as expanded stores in Quebec City.