“In retail if you don’t evolve and change, ultimately you start to crumble. We are seeing situations where retailers haven’t invested, when everything else has evolved around them”
Product selection is taken seriously and Simons still loves the
buying side of the business, even though he handles less of it now and has much more to occupy his mind these days. Today the company is at a crossroads as Simons rolls out an ambitious campaign to establish the 175-year-old family-run company as a national brand, with a network of specialty stores in major centres in Canada. Plans are in the works to open six new stores within the next two years, with the goal of increasing the total number of Simons stores to about 20 by 2018 or 2019. These bold expansion plans “should send a shudder through
the bones of most retailers in the middle of the market,” says Randy Harris, president of Trendex North America, publisher of the monthly newsletter Canadian Apparel Insights. “I think a lot of people have been waiting for Simons to break out of Quebec for a long time.” Almost 20 years ago Peter Simons and his brother, Richard, became the fifth generation to take over leadership of the family company founded as a dry goods store by Scottish immi- grant John Simons in Quebec City in 1840. Since the brothers took over the reins of the company from their father, business has grown from an estimated $12 million in annual sales, when operations were exclusive to the Quebec City region, to more than $300 million in annual revenue from a network of nine stores: eight in Quebec and one at West Edmonton Mall, North America’s largest shopping centre and Simons’ first foray outside its home province two-and-a-half years ago. The business plan has as much to do with taking on new or
existing competition as it does with dealing with the compa- ny’s growth and making sure the family enterprise can survive the dramatically evolving consumer and technological land- scape. “You can’t sit in your little backyard and say, ‘I am the biggest
fish in a little lake,’ ” says Simons, who looks aſter much of the management and operational aspects while Richard Simons, vice-president of merchandising, oversees most of the buying. “It is a big ocean out there and there are a lot of sharks all trying to eat our lunch. We are trying to build a national brand and I felt we needed to be larger to compete and survive.” As part of its pitch to illustrate its unique identity, Simons
points out that it is the oldest family business in operation in Canada and that it supports local design and architecture firms and artists, not to mention the 100 or so designers it has on staff among its 2,000 employees.
30 | CPA MAGAZINE | MAY 2015 By no coincidence, Simons’ announcement of expansion for
the next few years came on the heels of news of a fresh wave of competition in the upscale retail Canadian market over roughly the same time period. Big-brand names such as Seattle-based Nordstrom, Inc. and Saks Inc., now part of Toronto-based Hudson’s Bay Co., are moving ahead to open a swath of stores north of the border, and domestic luxury purveyors Holt Renfrew & Co. and Harry Rosen Inc. are repositioning, upgrad- ing and expanding. As well, because of its multiple price points, Simons is competing not just with chains selling luxury items but with multinational players that have a strong presence in Canada, notably Zara, the flagship store of Spain’s Industria de Diseño Textil S.A. (Inditex); Sweden’s H&M Hennes & Mauritz AB; and Los Angeles-based Forever 21. But for the most part, retail analysts are positive about the company’s prospects, saying the unique Simons brand and store experience set it apart from its competitors. Harris does not see full head-on competition from new
entrants such as Nordstrom and Saks, which will likely vie with each other, because he estimates an overlap with Simons will only be in the order of 15% to 20%. Simons benefits from a buzz in areas where it does not have stores, especially in metropoli- tan markets among 20- to 30-year-olds clued in to social media and fashion trends. The fact that its stores and brand are clearly differentiated from its competitors stands the company in good stead, along with its “very logical, some would say methodical” way of adding new locations, says Harris. And some say Simons did not have an option. Simons has
competition and must show that it can parlay its Quebec success into other markets where it really isn’t well known, says Maureen C. Atkinson, senior partner with retail consultants J.C. Williams Group in Toronto. Taking on different management responsibilities dictated by a national, rather than a mainly regional, presence is an added challenge. “It is obviously relatively risky, but there is also risk in not
changing, in continuing to do the same thing you have always done,” she says. “In retail if you don’t evolve and change and grow then ultimately you start to crumble, and I think in some cases we are seeing situations where retailers haven’t invested, haven’t taken those chances, when everything else has evolved around them.” One factor working in Simons’ favour is the fact that it is a really good operator, says Atkinson, who predicts that
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