Warehouse One upgrades shopping-centre presence

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This article was published 01/11/2019 (2199 days ago), so information in it may no longer be current.

Warehouse One has built an unpretentious chain of more than 120 stores featuring popularly priced, no-frills jeans and casual wear.

It has stores in towns like The Pas; Moose Jaw, Sask.; and Timmins, Ont., and does well in second- and third-tier shopping centres.

But the Winnipeg-based chain is starting to dabble in some high-rent neighbourhoods.

In the next few weeks, it is relocating its store on Dakota Street across the road into St. Vital Centre. As well, it’s hiring up and will open its fourth Edmonton store, at West Edmonton Mall.

Industry dynamics are creating new opportunities. Malls across North America are having to be more creative to fill spaces after anchor tenants like Sears and Zellers have closed under the pressure of the growth of e-commerce and changing consumer habits.

Reliable, well-run chains like Warehouse One that are comfortable with their niche and don’t blow their brains out trying to move up-market are now getting the chance to prove they can carve out a piece of business for themselves right beside competitors with higher-priced offerings.

Though it’s moving into the fancy malls, Warehouse One is not trying to become something it’s not — it’s all about value.  

Neil Armstrong, CEO of the chain, said: “For us, in this retail climate, there are now opportunities that may not have been available at the same level of value.” 

That’s likely another way of saying Warehouse One can get a better lease rate in the malls than was the case in the past. And for a chain like Warehouse One, moving its St. Vital store across the street into the mall is like hitting the jackpot.

“It’s a chance to increase revenue by 50 per cent overnight,” Armstrong said. “Sure, we’ll be paying more in rent, but we’ll have the additional revenue to cover it off.”

It’s the same thing at West Edmonton Mall. Warehouse One’s bread and butter has been offering jeans for $49 to $59, but at the same time, Armstrong said, the chain has significantly improved the product over the past few years.

It may not be a prestige brand, but Armstrong is confident it will get its share of the business from the traffic in the busy malls of Winnipeg and Edmonton.

“Traffic is what you pay for at the malls,” he said. “If we can get people to walk across the lease line, we will be pretty darned successful.” 

That same challenging retail environment — coupled with the chain’s own disciplined operating philosophy — has meant it actually has fewer stores today than it did two years ago.

One of the store closings was at its longtime head office, which has moved into a much larger head office/distribution centre in the south end of the city.

The chain is owned by Stern Partners (owners of the Winnipeg Free Press), which also owns a handful of other retail chains including Ricki’s, Bootleggers and Cleo.

Last year, Stern Partners acquired one of the largest buildings in the city, the 427,000-square-foot former national distribution centre for TruServ Canada. Warehouse One and Ricki’s, which is also based in Winnipeg, have both moved management and distribution operations into that space.

Armstrong said the other chains will move distribution and e-commerce operations over the course of the next year, creating a new retail distribution hub in the city.

Martin.cash@freepress.mb.ca