‘It’s a great deal for Manitoba’

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This article was published 13/06/2018 (3013 days ago), so information in it may no longer be current.

One of the largest buildings in the city, which has been sitting empty since Lowe’s acquired Rona, will become a hub of activity next year after being acquired by Stern Partners, the owners of several Canadian retail chains, including Warehouse One, Ricki’s, Bootlegger and Cleo.

The chains will consolidate distribution and e-commerce operations at 1530 Gamble Place, and Warehouse One and Ricki’s will also move their head office operations to the building. The new distribution centre is expected to eventually create close to 200 new jobs in the city.

Stern Partners, the same group that owns the Free Press, will also lease some space to a third party in the 427,000-square-foot building and will look to do further development on the 28.6-acre property.

Warehouse One is scheduled to move in January 2019 and Bootlegger, Ricki’s and Cleo will move in later in 2019 into early 2020.

Bob Silver, owner of Western Glove Works and a partner in Stern Partners, said, “I think it’s a great deal for Manitoba. We’ll be bringing new jobs to the city.”

Silver said the consolidation comes at a time when the operations’ various corporate offices were coming to the end of current leases and its current distribution centre in Laval, Que., was becoming increasingly inefficient and cramped for space.

“It made sense for us to look at doing things differently,” he said, “Especially since the space requirements for e-commerce is much greater than space requirement for distribution to stores and is the future of retail — not that bricks and mortar is going away… but if you are not keeping pace with growth in e-commerce, then you have some problems.”

The building served as the national distribution centre for TruServ Canada for many years and several iterations of that brand. In 2010, the chain, including the warehouse, was acquired by Rona Inc., and in 2016, Rona was acquired by Lowe’s, which closed down the distribution centre last year.

Trevor Clay, chairman of the Winnipeg Realtors’ Association’s commercial division and a broker with Capital Commercial Real Estate Services, said although it seemed like the building was empty and on the market for some time, there was a lengthy closing process before the deal was finalized.

“It is a very exciting transaction, to see a building of that size getting repurposed in a productive way,” he said. “The reality is it was being used as a single tenant building and there are not a lot of single tenants of that size in the Winnipeg market and the cost and process of subdividing a building like that is expensive. Without tenants in the back pocket, it would have been hard to make sense from an investment standpoint.”

The current distribution centre for Ricki’s, Bootlegger and Cleo operates out of a 110,000-square-foot leased building in Laval, Que., that has about 150 employees. It will close when retrofitting of the Gamble Place building is complete. Silver said the Quebec location may have made sense when there was a lot of garment manufacturing taking place in Quebec, but now most of the product is made overseas.

Gerry Bachynski, president and CEO of Comark Inc., the company Stern Partners acquired in 2015 that operates Bootleggers, Ricki’s and Cleo, said the Laval facility was squeezed for space.

“This move is a matter of us trying to affect some synergies,” Bachynski said. “Also, frankly, we wanted to get a location for our distribution centre that was more central in Canada. We had no stores in Quebec, but we had our distribution centre there, so there is a certain amount of back haul and costs associated with that.”

Ryan Kuffner, vice-president of sales and business development at Economic Development Winnipeg, said the move shows the location advantages of Winnipeg in running distribution operations.

“Also, bringing work being done in other provinces to Winnipeg is a great story for the city,” he said.

The corporate offices of Warehouse One and Ricki’s together employ about 200 people.

“The move is a big deal for all four banners,” said Neil Armstrong, the CEO of Winnipeg-based Warehouse One, which is the only one of the four chains that did its own distribution out of its current 64,000-square-foot Winnipeg facility. “It really helps secure our future. E-commerce is a growing area for us and will continue to be. Each of the store banners have had our own share of space challenges that we have been dealing with. This solves that for us going forward.”

martin.cash@freepress.mb.ca