TORONTO ? Larry Rosen is amused by Richard Baker?s assertion that no luxury specialty stores in Canada sell their wares online.
?We have been online for four years, and it is growing very quickly ? [the business] doubled last year,? the chief executive of menswear chain Harry Rosen said Thursday.
?Perhaps Mr. Baker doesn?t consider menswear to be a part of the luxury market,? he chuckled.
But Mr. Rosen does agree with a strategic insight the Hudson?s Bay Co. CEO, who announced a deal to buy U.S. luxury chain Saks Inc. this week, has made repeatedly about selling goods online: that online sales tend to enhance and drive interest in the bricks-and-mortar business, rather than cannibalizing it.
It?s a strategy HBC liked about Saks, whose research showed consumers wanted to access the retailer on multiple platforms, including online and mobile devices. Like HBC, Saks has been investing heavily in its ?omni-channel? to integrate all modes.
At Toronto-based Harry Rosen, the online business ?strongly complements? the company?s business at 16 bricks and mortar stores, Mr. Rosen said.
?We find that a lot of our customers shop at both,? he said. ?People are also doing tons of research online, coming in to our stores and saying ?I saw this item online and can you show it to me?? It is not uncommon for a person to buy a bunch of sportswear online and some shirts and ties and then three weeks later he will be in the store buying something else.?
With a shifting assortment of about 4,000 SKUs such as $395 Ermenegildo Zegna dress shirts and a $940 pair of Salvatore Ferragamo black calfskin oxfords, Harry Rosen?s online sales channel now accounts for 2% of its annual revenue of just under $300-million. That could top out at about 5% or 10% over time, Mr. Rosen predicts.
The 59-year-old company, whose sales have grown at about 10% annually for the past five years, is equally focused on expanding and upgrading its store square footage, to 375,000 from a current 275,000, doubling the size of some of its premiere locations.
?There is a huge advantage in having a bricks and mortar business,? Mr. Rosen said. ?Most people are still pretty tactile, they don?t want to order something unseen ? that?s the nature of apparel. In the States it used to be that there were a lot of pure e-players, and now [online apparel sales] are dominated by the department stores. People like to know there is something physical behind it.?
Harry Rosen?s expansion comes as Nordstrom prepares to open its first stores in Canada in 2014 and 2015. News of more impending competition came this week when Mr. Baker announced he would open seven high-end Saks stores in Canada.
Luxury department store chain Holt Renfrew has also been on an expansion tear in a bid to boost its square footage by 40%, and launched its outlet-store offspring, HR2, this spring.
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