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This article was published 30/7/2016 (1117 days ago), so information in it may no longer be current.
Winnipeg’s retail sector is getting its mojo back, with some new European clothing stores set to open and everything from brewhouses to pizza parlours looking to enter the market or expand their operations.
The sector hit a rough patch in the past 18 months as a spate of national store closings and downsizings, led by the collapse of Target Canada last year, drove up the vacancy rate in the city to its highest level in 16 years — 5.8 per cent.
Industry officials say the worst appears to be over. They predict the vacancy rate should begin to decline during the second half of the year, as vacant storefronts in regional malls and power centres get filled by newcomers and existing players who are adding more stores or are moving to bigger, better locations.
That, in turn, is allowing retailers who can’t afford mall rental rates to move into their old digs.
"When the Target situation happened, that needed to kind of resolve itself. In large part, it has, save for the one in Polo Park," said Ken Yee, senior vice-president in the Winnipeg office of Cushman & Wakefield.
"There is steady (leasing) activity, and it is encouraging to see Winnipeg continue to grow in the right direction."
Michael Stronger, a retail sales and leasing specialist with Shindico Realty Inc., agreed there’s lots going on now.
"We’re as busy as we’ve ever been. We’re actually filling up a lot of our (strip malls) that historically had some vacancies," he said.
"Now they’re full for the first time in a number of years because there is a lot of demand for smaller space."
With all of the new leasing activity, Stronger predicts the retail vacancy rate will start to decline in the second half of the year.
Wayne Johnson of Royal LePage Dynamic, author of the biannual Johnson Report on commercial vacancy rates, agreed.
Johnson said while the vacancy rate edged up one-tenth of a percentage point in the first half of the year, it should start to drift down in the second half.
"The activity level is still decent, and some of the (vacant spaces)... which have been problems seem to be resolving themselves now. So my bet is that it will get back down to about five (per cent)."
Yee rattled off the names of several retail chains he and his colleagues are working with who want to expand their presence in Winnipeg. They include newcomers such as Canadian Brewhouse, restaurant chain Ben & Florentine, Za Pizza, and fitness club Orangetheory; and long-established players such as Tim Hortons and Starbucks.
He said Canadian Brewhouse, which opened its first Winnipeg outlet earlier this year on Kenaston Boulevard, wants to add two more — one downtown and one around Regent Avenue in east Winnipeg.
"The properties are there, and we’re working on it," he added. "We’d like to announce them this year."
He said Ben & Florentine wants to open at least one more restaurant in the city, while Za Pizza, which opened its first quick-serve Winnipeg outlet about a year ago, plans to add two more in the near future.
Orangetheory, meanwhile, has opened fitness centres in Sage Creek and on Taylor Avenue.
Yee said there are two other quick-serve pizza chains looking for locations in Winnipeg, but he wouldn’t reveal them.
He noted that, as previously reported, B.C.-based Save On Foods will open three new grocery stores in Winnipeg later this year, in the Northgate Shopping Centre, the Bridgwater Town Centre and on St. James Street.
And Jollibee, the largest fast-food chain in the Philippines, is opening two restaurants — one at 1400 Ellice Ave. and the other in Northgate.
Some of the new arrivals are coming from across the Atlantic. U.K.based outdoor clothing chain Mountain Warehouse is opening its first Winnipeg store in mid-August in Kildonan Place mall.
Mall general manager Peter Havens said the retailer plans to open a second store next year in the fashion outlet mall under construction at Kenaston Boulevard and Sterling Lyon Parkway.
The Denmark-based Bestseller retail group is opening four stores in September in the CF Polo Park Shopping Centre. They include two women’s clothing stores — Vera Moda and Only — and two men’s clothing shops — Jack & Jones and Premium by Jack & Jones.
St. Vital Centre is busy filling some of the storefronts that became available earlier this year when a number of national and international retail chains, including Danier Leather, West 49, Carlton Cards and International Clothier, either shut down or reduced their footprint in Canada.
General manager Cheryl Mazur said some of the space is being filled by local players, such as Kite and Kaboodle and home-decor store Pieces of Paradise. Others are being snapped up by national retailers such as Charm Diamond Centres.
"We’ve got a few more (tenants) coming in. We just don’t have them quite yet signed," she said, adding the mall’s vacancy rate is 1.8 per cent compared with 3.2 per cent earlier this year.
Kildonan Place had its vacancy rate spike last year when it lost its 120,000-square-foot Target store. It plans to subdivide that space into four larger storefronts and eight smaller ones. As reported earlier this year, HomeSense and Marshall’s are taking two of the larger spots. H&M was reported to be taking another, but Havens said he can’t confirm that.
He said although the low value of the Canadian dollar is discouraging American retailers from expanding into Canada — their Canadian sales numbers don’t look as attractive when they’re converted into U.S. dollars — European players such as Mountain Warehouse are willing to take the plunge. Some of the stronger Canadian chains are continuing to open new stores if they can find the right location at the right price.
"All of the retailers are making all of the landlords sharpen their pencils and making sure the prices that are out there are the right fit," he said. "Everybody is being a bit conservative, but that’s never a terrible thing."
Updated on Saturday, July 30, 2016 at 8:25 AM CDT: Adds new headline