Retail: Trading Sears For La Maison Simons?
Zena Olijnyk
From the September 2005 issue of Canadian Business magazine
For fashionistas, a trip to downtown Montreal isn't complete without a spree at La Maison Simons on St. Catherine Street. Whether to check out end-of-season deals on cool designer threads--a salmon pink Juicy Couture linen jacket marked down to $60 from $250, for example--or to pick up the latest in hip, moderately priced fashions, shoppers can bet the store will be packed.
Out-of-province fans often wonder if the "junior" department store chain, headquartered in Quebec City, will ever expand outside la belle province. The answer, says president Peter Simons, a member of the fifth generation to run the family business since its founding in 1840, is a definite maybe. "You never say never, " says Simons, who admits he's had many offers to venture beyond Quebec. And opportunity could soon open up. Industry watchers speculate whether the Sears Canada location at the downtown Toronto Eaton Centre might become available. The troubled retailer plans to reduce costs by cutting staff and shedding unproductive retail space.
Right now, however, Simons has no specific expansion plans--he's concentrating on internal growth at the chain's seven stores. One reason for looking inward: size. "A Simons store at 80,000 square feet is almost a development," says Simons. "It has to go with a development. That's a little tougher for landlords; there aren't many malls being developed now." Besides, Simons is not a believer in growth for growth's sake; he's more concerned with whether it will deliver above-average return on capital. Simons points to what happened when Quebec department store retailer Les Ailes de la Mode tried to reach beyond its grasp. In August, the Fairweather Group in Toronto bought Les Ailes for $6.2 million; it had been unsuccessful in restructuring after seeking protection from creditors in December 2003.
