The GUARDIAN
May 26, 2004
Doug Gallant

Finding a home

Consumers in Prince Edward Island will see a number of changes in the retail sector over the next 12 months, not the least of which will be the entry into this market of two large national retailers, Sears and Home Depot.

Sears has had a presence on PEI for many years but that has been limited to a catalogue order office, a large furniture and home appliance store and a photo studio.

The company will break ground this summer on a full-fledged Sears department store. Approximately 135 jobs will be created by Sears in the process.

Developer Tim Banks of the APM Group said the new Sears store will measure some 108,000 square feet in area, which makes it just slightly larger than Sears' Champlain Place store in Dieppe, NB.

"They are developing a new big-box concept," Banks said "We've been working on this for the last 13 months and the Charlottetown location will be the first of its kind." Banks said the new Sears store, which will rise on a parcel of land on the west side of the the Malpeque Road near the Charlottetown bypass, will bring a number of new product lines to the city, in particular new clothing lines.

Sears will serve as the anchor store for a retail development Banks says will include a number of other national retailers. Banks would not disclose the identity of the other tenants at this time, saying those tenants will make themselves known when they fell the time is right.

He would say, however, that when Sears announced plans to construct this new store in Charlottetown they began to receive inquiries from a number of other national retailers in very short order. "I think it's a case where other major retailers see Sears constructing  a large new store in Charlottetown and recognize that Sears wouldn't be doing this if they did not think the market was there to support it,"  Banks said. "They too, then decide to take the plunge, I think you'll see a few of these other national retailers in our marketplace by next summer."

Construction is slated to begin on the Sears store in mid-August with an opening date in the spring of 2005.  Construction has already begun on the site of PEI's first Home Depot store, which is taking shape on a parcel of land adjacent to Charlottetown's Wal-Mart store.

Home Depot is the world's largest home improvement retailer. Currently, they operate stores in seven Canadian provinces, 49 US States, Puerto Rico and Mexico. By the time the Charlottetown store opens they will be in every province except Newfoundland.

Home Depot stores cater to do-it-yourself enthusiast, as well as home improvement, construction and building maintenance professionals. Nicholas Cowling, manager of public relations for Home Depot Canada, said the Charlottetown store will open before the end of the company's fiscal year which closes Jan.31.

Cowling said Home Depot's Charlottetown store will be an 80,000 square foot store, It will also boast an additional 10,000 square foot garden centre. "We're really excited about coming to Prince Edward," Cowling said. "We're really looking forwarding to introducing people to what Home Depot has to offer and becoming part of the community."

The Charlottetown store, which will create approximately 120 jobs when it opens, will carry in the vicinity of 45,000 different products. At 80,000 square feet, the Charlottetown store is only 10,000 square feet smaller than the largest store Home Depot is now building.

"We used to have 120,000 square foot stores but we've gotten much better at merchandizing," Cowling said. "Our stores are better designed now, they have wider aisles, they flow better." He said the stores are also laid out so departments that logically belong together are grouped together, For example, if you're doing a home renovation, you'll find that departments most commonly used by homeowners for that purpose are in the same area.  "If you're engaged in a major building project, you'll find that all of our building materials are located in another area."

Cowling said one of the reasons for Home Depot's popularity with its customers is because it doesn't just sell products, it also provides a full range of at-home services. "If you need an interior decorator we can provide that. If you need landscaping services we can provide that. IF your house needs a new roof we do that. We also pave driveways, paint houses and renovate basements. There isn't another national retailer doing that."

Cowling noted that Home Depot does not have these people on staff. "When we go into anew area we find out who the best people are in the area for these kind of jobs and we sub-contract them.  We contract people who are bonded, properly insured. We generate a great deal of business for them."

The store has a number of skilled employees who serve as project manager to make sure all projects go smoothly. "And the customer only deals with the project manager. The project manager deals with the contractors and the sub-contractors."

Another popular feature of Home Depot is their seminar series. "We have seminars in our stores every weekend. Those seminars cover everything from how to make your home more energy efficient to how to put down a new floor. We also have a 'green thumb college' for gardeners."

Seminars on flooring are among the most popular of these sessions, he said. Cowling said Home Depot takes a very active interest in the communities it serves across the country. "We're involved in a number of national initiatives. We're the largest sponsor of the Habitat for Humanity program in the country. We also have a Home Depot playground program in which we bring together as many as 200 people and build a playground in a single day. We built 10 playgrounds last year and so far this year have built two more. this coming winter we're also looking to help build some community rinks."

The company also has a "teen depot" program in which the store's associates take on small local projects. "Our philosophy is we would be nowhere without our customers so we like to give back to the community. We also find our employees are happier when they're doing something for the communities in which they live. It's great for our customers and our employees."

The Charlottetown mall will see three new stores open in the coming months - two clothing stores and a store specializing in electronic games.  A spokesman for RioCan, the Toronto-based real estate investment trust that manages the mall, recently confirmed Dynamite and EB Games will open stores in the mall this spring. Not long after, Le Chateau will become a tenant of the mall.

Dynamite is a Montreal-based clothing chain with more than 80 stores across the country. The store caters to a younger, fashion-conscious clientele. The electronics chain EB Games is one of the world's leading specialty retailers of video game hardware and software, PC entertainment software and accessories. In operation for more than 25 years, the chain currently operates more than 1,500 stores around the globe.

Customers can "test-drive" the latest platforms and software titles, get gaming guidance and opinions from knowledgeable sales associates, reserve advance copies of upcoming releases, and trade-in their previously played games for credit to buy new games.

Le Chateau opened its first store on St. Catherine Street in Montreal 40 years ago and today operates more than 150 locations across Canada and four more in the United States. The popular chain, which has more than 2,000 employees company-wide, was founded by Montreal businessman Herschel Segal who had a unique vision of what he wanted his store to be.

"He knew that you craved something as unique as you were...something daring and new," a corporate profile on the store states. "That's when he vowed to bring you the fashion you wanted. And he figured you didn't want to have to pay a fortune for it."

Today, Le Chateau is a publicly-owned fashion powerhouse that manufactures more than 3.5 million high quality garments a year in its own Canadian production facilities. The store's designs reflect its own vision and creativity as well as the influences of today's great designers.

Business closures overshadowed positive developments in downtown Charlottetown last year but Bob Young is trying to breathe new life into the city's downtown core. Young, who currently operates two businesses at the Shops of the Confederation Court mall - the Only Deals Dollar Store and Critters, a pet store - will open a Tru-Value Hardware store at that mall towards the end of this month.

Downtown Charlottetown, which once had three hardware stores, has been without a hardware store since Home Hardware closed its doors early in 2003. Young's Tru-Value Hardware will be located on the mall's lower sale floor, just across the corridor from his town other businesses.

Downtown residents have identified a hardware store as being one of the top items on their consumer wish list. The new store will be approximately 7,000 square feet in area and will carry a full line of basic hardware items, the kind of items a typical home-owner would look for, as opposed to a contractor. He said a third of the store will be devoted to what he called "convenience hardware" items.

But the rest of the store will resemble a department store. "When Eatons closed, the downtown core lost its last real department store. It created a void," said Young. "We're going to try to rectify that. We're going to take two thirds of the store and create something that's more of a department store than a hardware store."

Young believes there is a market for a hardware store of this size in the downtown core. Mike Arnold, President of Dyne Holdings which operates the mall, said the need for a hardware store in downtown Charlottetown is clear. Arnold said discussions have been ongoing with three other retail businesses which would also like to locate in the mall but he is not disclosing the names of those businesses at this time.

While several new retailers have indicated their intention to enter this market over the next 12 months they may be the last for awhile.

"We're a very small market when you look at the big picture," Banks says. "We've got a total population of 135,000 people, not much bigger than that of Moncton, and you have to travel quite a distance to get to the population within our market."

Banks, one of the largest developers in the region, said while the national retailers have come to PEI  there isn't a large regional component, although he suspects that will change over time.  "I think it may be stagnant for awhile in terms of overall growth," Banks said.

So what does he see happening in the Island's retail sector?

"I think you're going to see some demographic changes in terms of who retailers are looking at as their customers." He also suspects more retailers will want to develop their own properties as opposed to leasing space in malls.

"A lot of retailers today want to invest in and own their won properties. We've seen that with retailers like Wal-Mart, Canadian Tire, Atlantic SuperStore and Sobeys. They've all ended up on their own sites. many retailers now feel they can't afford the high overhead that comes wiht leasing big space in a big mall."

Another change Banks sees is a trend towards major retailers "growing" their own stores from within. "Many stores are expanding the product lines they carry in order to be more competitive. You can go into grocery stores and find clothing. If you go into any large drug store you'll find that drugs are now just a small component of the inventory."

Banks said many stores are also making a concerted effort to "freshen up" their locations. "And as the market gets more competitive  you'll find retailers become increasingly conscious about how their stores look to the public."

As to what will happen in downtown Charlottetown, Banks said he does see some great opportunities for revitalization, particularly with the development of the new federal building. At the same time, he stresses that revitalization will only happen if the city relaxes what he sees as its overly restrictive bylaws on issues like building density and building height.

"The city has to allow higher density in the downtown core. The city also needs to offer incentives to developers ." Banks pointed to the city of Moncton as an example of how to encourage developers."

"They're  the leaders in Canada when it comes to revitalizing the downtown core. And they've done it with a creative set of bylaws that allow developers to work within the downtown core."

He said his firm has a one-acre parcel of land on Pownal Street zoned for 26 units. In many other Canadian cities that same parcel of land would be zoned for up to 60 units. "We don't get any more for rent than developers in those other cities do but we end up paying far more for the land in the end than they do because we don't get to put as many units on it. That's why you haven't seen any new high-rises built in our downtown here

The most prosperous growth in the region, he said, has taken place in Moncton. "Halifax and St. John's have also seen significant urban renewal. Less is happening here because the atmosphere is not there for developers. Our city bylaws prevent developers from building."

Banks believes that will change, too. "I was invited to meet with the new downtown committee set up by the mayor. I made a presentation and they were interested in the message I had. I believe (Charlottetown) Mayor Clifford Lee wants to move forward. The rest of the country is moving forward fast, we can't afford to be left behind." Lee said he recognizes the city's existing bylaws place certain limitations on what can be done downtown.