1st Hudson's Bay lease sold in Winnipeg as shoppers, experts consider how best to fill large empty spaces
YM Inc. to take over lease at Winnipeg Outlet Collection in old Saks Off 5th location
The empty anchor location in the Winnipeg Outlet Collection mall may gain a new tenant now that a deal has been struck with YM Inc., which owns brands such as Urban Planet, Bluenotes, West49 and Suzy Shier.
Legal filings show the clothing retailer has been approved to buy five leases across Canada of former Hudson's Bay company locations, including the now-empty Saks Off 5th space.
The deal, valued at $5.03 million, includes five leases: Vaughan Mills in Vaughan, Ont., Tanger Outlets in Kanata, Ont., Outlet Collection in Winnipeg, CrossIron Mills near Calgary, and Toronto Premium Outlets in Halton Hills, Ont.
Hudson's Bay put its leases up for sale earlier this year, after it filed for creditor protection and closed its 80 stores and 16 under the Saks banner. Following the closure, it's unclear how hundreds of thousands of square feet of retail space left behind by the other stores within the malls will be filled.
In Winnipeg, many of those stores were located within malls where they were considered the anchor tenant. The previous Polo Park location occupies 212,086 square feet over three floors, while the previous St. Vital Centre location is 122,000 square feet over two floors, representatives for the malls said in emails to CBC News.
Outlet Collection declined to comment on the sale, and a response from YM Inc. hasn't been received as of publication time.
Not a new problem: CEO
Loren Remillard, president and CEO of the Winnipeg Chamber of Commerce, says he's confident the empty spaces will find a new life soon. He said businesses had experience in the past with repurposing large retail spaces when Sears went bankrupt.
"We've successfully navigated through those times and found new tenants, new offerings in those malls," he said. "We'll get through this."
"Those spaces will be filled with maybe some more traditional retail or some new offerings that currently don't exist. The fact is where consumers are, the malls and the businesses in those malls will adapt to meet them there," said Remillard.
Shoppers at Outlet Collection Winnipeg have their own wide-ranging dreams for the currently empty space.
"A larger retail, maybe a slightly higher end retail," said Johanne Ferguson. Her husband would like it to have some nice restaurants.
Others were in favour of entertainment hubs. "Maybe Golf Town, it will be like a one-stop shop, you can go in there and shop and at the same time play golf," said Leo Malabanan.
"I think we could add activities to malls, like bowling or a mini golf sort of thing," said Jori Wasilewsky.
"An old school arcade would be really fun," says Morgan Campbell.
Tiana Duvnjak also envisioned games for the space.
"Even like at the Forks they have two ping pong tables and it's always busy. I think that sort of thing or even a pool even, I think a lot of people would use that."
New ideas for old spaces
Remillard says one strategy to use large spaces like these anchor tenant location is to break them into smaller, more affordable units that allows retailers to lease space and operate in the mall environment.
He says another approach is to turn these spaces fitness centres or entertainment hubs.
"What you really need to do is to create a reason for people to visit the mall. And that's where we need to take a look at how we maybe not just backfill the space, but reinvent the space."
The third approach he sees is to convert some of these large retail areas into affordable residential units.
"Ultimately, it really comes down to understanding what the market needs are right now and making sure you're adapting the space to meet that."
With the advent of e-commerce, he says shopping behaviours among consumers have certainly changed, but he doesn't agree that brick-and-mortar is going away.
"People still want to be able to go into a store, try on that outfit, try on those shoes, interact with the electronic device they want to purchase. They may ultimately end up doing that online, but there's still a consumer need to be able to feel and have a tactile experience with what you're trying to buy."
Craig Patterson, founder and publisher of the Retail Insider adds alternative uses include entertainment hubs like pickleball courts, food halls, or even residential or mixed-use developments.
He says with e-commerce rising, malls are also focusing on experiential attractions to draw people in such as indoor rides, waterparks, or activity zones for kids.
"In some shopping centres, we're seeing a pickleball court, whether or not that's in the parking lot outside or even in a larger space within the shopping centre, which would be I guess better for winter here in Canada," says Patterson.
Holes in cities' downtowns
Winnipeg isn't the only city wrangling with the question of what to do with these now-vacant spaces. After the Hudson's Bay stores closed, a dozen bidders made offers on a total of 39 properties. One of the bidders who wanted those spaces was B.C. Billionaire Ruby Liu.
She paid $6 million for three leases at malls she owns — Woodgrove Centre in Nanaimo, Mayfair Shopping Centre in Victoria and Tsawwassen Mills in Delta. That deal got court approval last month and the leases were transferred back to Liu.
Liu was also chosen by the Bay to buy 25 other leases, but landlords are fighting that sale because they say she has not filed a business plan that is credible or realistic. The company has now reached deals to sell the leases of six store locations, as legal wrangling continues on the deal with Liu.
Patterson says the closure of the downtown location of Husdon's Bay in other cities like Vancouver, Calgary, Ottawa and Montreal will be a "blight on the downtowns for a while."
"I think we're going to see a lot more vagrancy in the downtown cores because of the closure of these department stores. And I think that'll probably last for a while. And I think that's going to be very unfortunate, especially in busy markets like Toronto and Vancouver," says Patterson.
"I mean, downtown Winnipeg is a very prime example, a very raw example. Losing that stunning looking Hudson Bay building, on Portage Avenue. It's just such a shame that it's gone."
Meanwhile, many shoppers in St. Vital Centre are still wondering what might fill the space there. Shopper Jamal Tajdil says he would like bigger food courts, more green and open spaces within the malls where people can get together.
Another shopper, Walter Pierce, says a daycare and/or a fitness centre will be beneficial to fill those empty spaces.
Kishan Patel says he would like Canadian Tire or Lululemon, as "that would make this mall even higher, because we have JD sports already coming in, and if Lululemon comes in here, it's much better."
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