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 it moved onto St. Catherine’s Street in Montreal and blew us away with its brand of fashion and fun. Our Montreal team are regular shoppers and keep us up to date.
This is a company we really want to succeed in the brutally competitive world of Canadian retailing. It has operated continuously since 1840 and remain family owned and operated. While it does not report its financials, estimates of its 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 its traditional department store business.
In the past five years, it has started to aggressively expand and solidify its position in Canada. Simons has had a transactional website since 2010, well ahead of most Canadian retailers, and has moved outside of its home province with thoughtful store expansion across the country. Wisely, it heavily promotes the fact it is Canadian owned and operated—believing this is meaningful to Canadian shoppers. While we are very optimistic about this company, we recognize that the odds are stacked against it. However, here are some of the positives that we see:
- Unique product: It has 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 its fashion flair ensures it has unique products that are relevant to the Canadian shopper.
- Strong Online Business: While the retailer admits this is fast growing, but not profitable, a strong online presence is absolutely essential to any retailer that wants to compete. Its expertise online is apparent with a site that is easy to navigate and shop.
- Stores Worth Shopping: This may be its key differentiator and where Simons shows its flair. Simons is committed to taking its stores beyond boring. It features art installations in its 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 it has a lot of the important ingredients. However, since it does not publish its financials, it is impossible to tell how productive it is. On the negative side, art installations in stores make build-outs much more expensive and its smaller size makes profitability online difficult. On the positive side, Simons is getting backing from bankers who do know its profitability, and landlords who are looking to them as a new, exciting anchor. Our money is on Simons – for now.
Maureen Atkinson is the senior partner in charge of market research at J.C. Williams Group