American Retailers Expanding to Canada

The following is an excerpt from an article in:


The New York Times
Saturday, September 15, 2012

American Retailers Expanding to Canada

By IAN AUSTEN and STEPHANIE CLIFFORD

TORONTO — Nordstrom and Target are about to open stores in Canada, J. Crew and Tory Burch just did so, and Ann Taylor and Kate Spade are scouting locations.

American retailers extending their reach northward seems like the most obvious of moves. But until recently, the Canadian market was hard to crack for many companies. The Canadian dollar was weak, costs were higher, and with limited real estate development, it was difficult to find space.

“You can’t just say that we are close in proximity or we both speak English, so it should be the same,” said Blake Nordstrom, president of the Seattle-based Nordstrom chain. “We recognize there are differences. That’s probably why we’ve probably been slow in coming to Canada.”

Now, the door to Canada is opening wider thanks to a stronger Canadian dollar, a relatively robust economy and a loosening of the commercial real estate market, in part because of the downsizing of some longtime retailers like Sears Canada. Nordstrom said this week that it would open four stores in Canada in 2014, three of them in former Sears Canada locations.

For American retailers, Canada’s allure is basic: Sales per square foot at Canadian malls were almost 50 percent higher in 2011 than sales per square foot at American malls, according to Colliers International Consulting, a real estate research firm.

“Major Canadian markets are at historic lows for vacancy rates, and have been for four to five years now,” said James Smerdon, director of retail consulting at Colliers. “We have a much more conservative development financing and development industry in Canada. There’s not as many lenders for retail and large-scale shopping center development, so finding access to capital is trickier.”

Here in Toronto, the Yorkdale mall is adding 145,000 square feet, in part to accommodate American newcomers like Kate Spade New York, Tesla Motors and Ann Taylor. The high-end mall has been a first stop for other American brands, including J. Crew, Crate & Barrel and Apple.

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Canadian Dollar’s Strength a Factor in Autoworkers Talks

The following is an excerpt from an article in 

The New York Times
Tuesday, August 14, 2012

Canadian Dollar’s Strength a Factor in Autoworkers Talks

By IAN AUSTEN

OSHAWA, Ontario — For many in Canada, the rise of the Canadian dollar to parity with its American counterpart is more a source of anxiety than pride.

Prominent among those concerned are the 20,600 Canadian Auto Workers union members employed by the Detroit Three. Contract talks for the industry open here on Tuesday. But the dollar’s high value, which most economists anticipate will continue, has more than obliterated the traditional cost advantage Canadian auto plants once enjoyed.

In 2009, when contracts were renegotiated after the rescue of General Motors and Chrysler, the Canadian dollar was worth about 78 American cents. Last week, it traded briefly at just over $1.

Regardless of the outcome of those talks, the strong currency, and higher wages for Canadian workers, seem likely to continue the shrinking of the Canadian auto industry since its peak in 1999. The underlying issue is how much that decline will continue.

Detroit automakers have been scaling back their operations in Canada at a growing pace even as they add workers and shifts in the United States.

Last September, Ford Motor Company of Canada closed a plant that made taxis, police cruisers and Lincoln Town Cars, eliminating 1,500 jobs. General Motors of Canada plans to close one of two assembly plants in this city east of Toronto and will move some of its production to a mothballed Saturn plant in Tennessee, laying off another 2,000 workers. The future of other Canadian auto factories, including Chrysler’s vast minivan plant in Windsor, Ontario, remains murky.

Over all, factory closings by the Detroit automakers have lowered Canada’s vehicle production from three million cars and trucks in 1999 to 2.1 million last year, despite offsetting factory openings and expansions by the Canadian arms of Toyota and Honda.

The number of Canadian Auto Workers members employed by the Detroit Three has fallen by 28,200 over that time. In 2011, a booming year for North American car sales, production grew by 3.2 percent in Canada, 14.4 percent in Mexico and 11.5 percent in the United States.

While a number of factors have led to Canada’s steady decline as an automaker, the new contracts for the C.A.W. workers will probably play a critical role in determining Detroit’s future investment plans in the country.

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