What's in Store for Canadian Shoppers: J.C. Penney, Lowe's, Kohl's, Macy's and More

One of the greatest rewards for surviving the recession relatively unscathed is now those American retailers we always yearned for during cross-border shopping trips are finally coming to our own backyard.

We ran down a few of the headliners coming our way in a recent article, but there were so many, we couldn't fit them all in one place. It's insane how many American retailers are either coming, or rumoured to be coming, up north, and there are significant economic trends that are the reasons behind the migration.

Let's start with the strong Canadian dollar, the one that's forcing American retailers to extend their Canadian operations past the web, since their own dollar is still so weak by comparison. Retail spending per capita in Canada now equals that of the U.S. at just under $14,000US. Retail spending in Canada jumped by 5% between 2009 and 2010 and that's without many of the cost-cutting measures retailers have had to use to keep recession-weary shoppers in stores south of the border. As a result, many American retailers see Canada as an opportunity to make money at the full sticker price again.

Canada also presents an opportunity to expand internationally using existing supply chains without the risk of having to establish a whole new infrastructure further afield. Plus, the Canadian market represents a plethora of untapped potential. The U.S. has more than 23 square-feet of shopping mall floor area per capita compared to Canada's 14 square-feet per capita. Right now, the retail market is overextended for the current state of the U.S. economy, while Canada's market is under-served compared to its population, especially in the medium-to-large metropolitan centres.

If these American brands can maintain some operating efficiency, then they can make significant profits. Shopping centre spending is up to $580 per square-foot in Canada, compared to $309 per square-foot in the U.S. So, now that they're here, here's what you can expect from them:

SLIDESHOW: WHICH U.S. STORES ARE HEADING NORTH?

J.C. Penney
J.C. Penney is reportedly considering its first foray into the Canadian market according to The Globe and Mail. Various commercial real estate companies with interests in some of Canada's biggest malls (Colliers International, Cadillac Fairview) are rumoured to have had discussions with the American department store giant about moving into some of their many well-known mall properties.

However, there have been no formal announcements or confirmations from J.C. Penney about a move north of the border just yet. It sounds like there are things that need fixing at home first. May 2012 saw their shares go into free-fall after first quarter losses. The stock declined nearly 20%, which is the biggest decline for the company in the last four decades, counting the 1987 stock market crash. J.C. Penney blames the first quarter fall that ignited the 20% drop in sales and share prices on a poor reception to their announcement that they will be abandoning their numerous and frequent sales, promotions and coupons each year for a steady diet of low prices.

This decision, which critics call "incalculable damage" was made by J.C. Penney's new CEO Ron Johnson, a former Apple executive who expanded the dimensions of the Apple Store and created the Genius Bar. He also used to work at Target along with new J.C. Penney President Michael Francis who,as Target's Chief Marketing Officer, orchestrated Target's Canadian expansion.

Having Francis on board may mean good news for Canadians, as he can take his expansion playbook to J.C. Penney, but first it looks like the company will need to stop the bleeding stateside. If J.C. Penney does come to Canada in the very near future, Canadian customers may enjoy their plans for a store-within-a-store that's all Martha Stewart Living products, thanks to their 16.6% stake in Martha Stewart Omnimedia Inc. Johnson plans 80 to 100 stores-within-stores as part of his controversial corporate overhaul plans. Hey, it worked for Target didn't it?

Kohl's

In a way, Kohl's is in the same boat as J.C. Penney. They have approached commercial real estate agents about their options up north. There was a time when it looked like they would even beat Target in the race to Canada. But since then, nothing further has been announced as far as an E.T.A. in the true north strong and free.

"At this time, we've not announced any plans to open a new store in Canada. Kohl's has an ongoing real estate assessment process. At any given time, Kohl's is reviewing sites in communities nationwide. We do not comment on real estate speculation," Kohl's spokeswoman Vicki Shamion told the Milwakee-Wisconsin Journal Sentinel.

Instead, it's thought that they will expand their e-commerce initiative to Canada, as it is doing gang busters in the U.S. Should this happen, Canadians will have access to store specific and exclusive brands, such as Chaps by Ralph Lauren and Simply Vera by Vera Wang.

In an unrelated interview with the same paper, Kohl's CEO Kevin Mansell said Kohl's would ramp up efforts toward expansion based only on consumer demand.

Macy's

This department store, most recognizable from The Miracle on 34th Street and their annual Thanksgiving Day parade, has finally made inroads into Canada, but not with actual stores...yet.

A year ago, Macy's announced it would allow Canadian shoppers to buy its products online. Unfortunately, they've also made the unpopular decision of including duty as part of the cost, along with exorbitant delivery charges. Just check out the following example left by an unsatisfied customer on Smartcanucks.ca, a $35 dress came with delivery charges of $42 along with $12 duty.

Delivery to Canada is made possible by a third-party management service called FiftyOne, which prompted one Smartcanucks.ca poster to joke, "I guess that's why their name is FiftyOne, it is the average price of shipping to Canada."

The Wall Street Journal actually asked Macy's about their plans for stores of the non-virtual variety up here, but their spokesperson remained mum on the details, saying only that international expansion was of interest, but there were no current plans to open any stores outside the U.S. This is in direct contrast to what The Globe and Mail reporter Steve Ladurantaye tweeted just a week later:

"Macy's also looking for Canadian retail space, says law firm Weirfoulds."

Since then, nothing has come of it, so who knows?

Tanger Outlets

If you want designer brands at deep discounts and are willing to drive hundreds of miles to get them (C'mon, admit it, many of us are) look no further than Tanger Outlets. The North Carolina-based company has some pretty high-profile residents in their malls, including Coach, Polo Ralph Lauren and food company Harry and David.

Canadians can now have at these designer wares, thanks to an unprecedented deal between parent company Tanger Factory Outlet Centers and Canadian real estate company RioCan to open 10 to 15 Tanger Outlets in Canada. The first one saw them buy and rename the Cookstown Outlet Mall near Innisfil, Ont. for $62 million.

Steven Tanger, president and CEO of Tanger Factory Outlet Centers, told the Toronto Star the Cookstown deal "accelerates our plans with RioCan for outlet centre development in Canada."

In celebration of its new name, its new look and what the company called "A Victoria Day Weekend of Savings," the Tanger Outlet at Cookstown offered summer fashion giveaways, a special gift with purchase, 20% additional savings offers and a celebrity appearance by actor Peter Facinelli, known for his role as Carlisle Cullen in The Twilight Saga and as Dr. Fitch "Coop" Cooper on Nurse Jackie. While schmoozing with the actor, shoppers enjoyed the savings discount book, TangerClub frequent shopper program, gift cards and seasonal TangerStyle 20% coupons that could be used on brands, such as Coach, Aldo, Tommy Hilfiger, adidas, The Children's Place, Stride Rite, Puma, Villeroy & Boch, Levi's Outlet, Reebok and more.

More Tanger Outlets are scheduled for Ontario in 2013, including one in Milton, Ontario at the Highway 401 and James Snow Parkway interchange. Another location will be near Scotiabank Place and Highway 417 in the western edge of Ottawa. The rest of the planned locations will be scattered near Montreal, Calgary, Edmonton and Vancouver over the next seven years.


Intermix

Intermix is an icon if you're a fashionable female. The women's fashion company will be opening it'a first international 2,500 square-foot flagship location on Bloor Street in Toronto this fall, with more stores coming down the pipe. Yorkdale Shopping Centre (also in Toronto) has been rumoured, along with the usual suspects of Montreal and Vancouver.

"Why shouldn't we be in every international city in Canada?" said Khajak Keledjian, Intermix's CEO.

Yes, why shouldn't they, especially when so many women are in love with their edgier brands and their I-can't-believe-they-got-away-with-this sales? Intermix comes at fashion with a high-low paradigm, mixing everyday affordable clothing with designer pieces from Stella McCartney, Fendi, Valentino, Jimmy Choo and Givenchy.

Sari Sloane, Intermix's VP of Fashion, told Post City Magazines this "high-low" concept helps women put together an "unexpected, highly-styled combination of clothing."

Saks Fifth Avenue

Do we really need to say anything more? Yes, it's true. This New York fashion legend could be setting up shop in Canada. They already ship to this country online, but now brick and mortar stores could be in our future very soon.

The first rumour had the full-fledged retailer moving into the newly expanded Yorkdale Shopping Centre in Toronto, but then The Globe and Mail had it that this was actually their off-shoot discount operation -- Saks Off 5th.

Either way, right now it's just a consideration and nothing has been formally announced. We'll have to wait for this crown jewel, which was featured as one of three clothing buyers on the fashion designer reality show Fashion Star. Other Canadian locations have also been mentioned, particularly Vancouver's Robson Street.


Lowe's

Lowe's has been in Canada since 2007, making it the old man of the U.S. chains that have made the trip up here. Customers applaud their customer service, which sees the department handling returns and replacements with no questions asked:

"Carpet wasn't what we wanted. Lowe's quickly agreed to replace the carpet and did so at no additional cost," posted John on SmartCanucks.ca.

"I needed a replacement receipt (or so I thought) for a Moen kitchen faucet I bought at Lowe's in 2009. Working with my bank I was able to identify the date of purchase and the amount of the receipt. Lowe's customer care was great at taking my particulars and an image of my receipt was emailed to me in a couple of days. All very professional and courteous," posted Cam on the same site.

"Oh yeah, it turns out that all I had to do was call Moen, tell them which faucet and finish I had and the replacement part was couriered to me immediately and no receipt required and an excellent experience with well trained and knowledgeable staff."

One customer even went as far as to say Lowe's was better than Home Depot and Canadian Tire combined. "Way better than Home Depot, Rona, and the dreaded Canadian Tire in the same area. Neat and tidy store, well stocked, friendly and helpful staff," wrote Lynda R about their Brampton, Ontario store.

No one in Canada seems to care that they pulled their ads from the short-lived reality show All-American Muslim last year.

Walmart

Of course Walmart's been operating in Canada for years, but with the influx of new American retailers poised to take a bite out of their market share, the consumer behemoth has invested in changes of its own.

In April 2012, Walmart Canada CEO Shelley Broader announced that more of the retail giant's products will be available for only a loonie. A dollar was chosen because in addition to the country's largest grocery chains, Target and the rest of America's invading retail hordes, Walmart's dollar store rival Dollarama is also expanding.

It seems Walmart is being challenged on all fronts, so, along with slashing prices, they'll also be spending more than $750 million to open, relocate or remodel 73 stores. They're also expanding their grocery offering, putting food in existing stores that don't already have it.

Walmart has never competed with Target outside the U.S, which means they don't know what they don't know when it comes to the reaction to the brand by Canadians, but they are confident they will be able to stem the coming tide.

"We have a tremendous amount of consumer research and we understand the nuances and the details of what customers are purchasing today," said Broader.

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