Vancouver's Alberni Street transforms into upscale retail hotspot



Tiffany & Co. located in the 1000 block of Alberni Street in Vancouver.

Photograph by: Ric Ernst, VANCOUVER SUN

The year was 2009. Oleg Minchenko, then a resident of Dubai, was in Vancouver on a scouting trip.

His mission was straightforward: To find out whether the city — then a backwater when it comes to ultra-high-end retailers — made sense as a Canadian base for De Beers, one of the biggest name in the jewelry world.

Minchenko, now the CEO of De Beers Diamond Jewellers Canada, admits Vancouver was not the first choice.

“De Beers Jewellery had never been in Canada, and Toronto was the first target because it’s the biggest city,” he said. “We scouted Bloor Street, but Vancouver was always on the radar because it’s the gateway to Asia, the biggest market in the world. So we came and looked at it.”

When he arrived, he could not believe what he found: Quiet Alberni St., with the landmark Hotel Vancouver bookending one side and the modern, upscale Shangri-La the other. The bustling foot traffic of Robson St. was just a block away.

But except for a small cluster of premium retailers (Tiffany & Co., Hermes, Louis Vuitton and Burberry), the block was largely devoid of the stores he expected to see — the likes of Prada, Versace, Rolex and the like.

Instead, the corner of Alberni and Thurlow was home to a 7-Eleven. A Dollar Tree was next door.

“I was staying at the Shangri-La, and immediately, you see how potentially great Alberni is,” Minchenko said. “And to my surprise, no one was here. We told our agent almost immediately that we needed a space on this street. … We decided that Vancouver had to be our entry point to the Canadian market.”

Today, the 1,700-square-foot Debeers flagship store sits centrally on Alberni. And instead of neighbours selling Slurpees and one-dollar plastic flowers, it is in company with some of the most expensive brands in the world — where $3,000 handbags and coats in museum-like displays are the norm. Truly high-net-worth customers can shop in ubiquitous semi-private rooms in the stores to view, away from prying eyes, items reaching five figures or more in price.

Mario Negris, executive vice-president of commercial real estate firm CBRE Vancouver, has helped finesse numerous high-value retail/commercial deals in the city. He says wealthy clients from abroad, usually China, some tourists and others new immigrants, are driving sales at Alberni Street’s luxury stores.

“I think what’s driving our residential markets is the same forces driving our luxury retail market,” he said. “It’s probably the same buyers. I don’t think that’s a secret. For these clients, to spend $20,000 on a handbag, it’s really not that big a deal.

High-end hotels like the Shangri-La, which act as an initial entry point to Vancouver for many high-income tourists, have helped draw wealth to the area.

Michael Braun, a senior executive at real estate developer Westbank Corp. (which helped build the Shangri-La), saw the potential of Alberni’s core well before the hotel opened its doors in 2009.

“Being at the corner of West Georgia and Thurlow meant Shangri-La would be only one block away from Robson Street and Burrard Street shopping, and four blocks to the waterfront with access to the seawall and Vancouver Convention Centre,” Braun said. “Alberni Street with its proximity to Robson was due for, and starting to undergo, a complete redevelopment.”

But the luxury retail boom caught him by surprise.

“Shangri-La helped start the trend for Alberni with the opening of Burberry in the development,” Braun said. “(But) we didn’t anticipate all the retailers that have since flooded in. Alberni went from being ‘off-Robson’ to being a destination in itself, and is — for many retailers — more desirable than Robson today.”

That was attraction for Burberry, which currently has 18 stores (boutique and stand-alone) in Canada. Their Alberni location was among the first individual ones in the country as the brand targets the “travelling luxury consumer,” according to a company spokesperson.

Negris said scouts from luxury brands routinely call for a tour of the available store spaces on Alberni.

“In the last two years, I’ve toured more luxury brands than in my previous 20 years combined,” said Negris. “It’s not even close.”

Word is out that downtown Vancouver can support luxury retail, Negris said. A recent report from Retail Insider showed Pacific Centre topped the list of Canada’s most prized malls, with annual sales of $1,498 per-square-foot. Industry chatter indicates the nearby Pacific Centre mall may have one of the highest sales-per-square-foot figures in North America.

“It’s a fairly tight community; everyone seems to know everyone else’s business,” Negris said of the retail sector. “If one of the brands has a boutique at a Holt Renfrew, and it’s doing incredible numbers out of this market, all of a sudden the thinking is, ‘Maybe we should open up a full-line store.’

“And if someone says, ‘Hey, one company is doing really well in Vancouver, maybe we should open a store there,’ somebody else in the industry would get excited and send someone to take a look at Vancouver.”

Since De Beers moved in 2013, brands like Versace, Tory Burch, Strellson, LFX Jewelry and Moncler have all opened stores on (or near) Alberni. Most are aiming to differentiate themselves among the growing crowd. Italian luxury fashion label Brunello Cucinelli was keen, for instance, to lean on its moniker as the “King of Cashmeres” in its publicity for its Thurlow flagship store. Tiffany & Co., which has been on Alberni for a decade, an expansion to its current 4,700-square-foot showroom at Alberni and Burrard (to take over a large space formerly occupied by a Japanese restaurant) is well underway.

Prada, meanwhile, is set to open its doors on Alberni on March 11 in a large space up to 7,700 square feet. Officials said the store will feature Verner Panton-designed sofas and crystal display cases, and it will be the only store in Canada to offer Prada’s Made-to-Measure program, “presenting the client with more than 300 fabric options for suits and jackets, 30 for coats, and around 230 for shirts … inside the store’s VIP room.”

The price range for the service is, to be expected, high: Up to $2,000 for shirts, $28,000 for suits, and $8,000 for coats.

With demand for retail space so overwhelming, Shangri-La itself shuttered a street-level lounge area to create space for Swiss watchmaker Rolex to open its first dedicated store in Vancouver. These days, the neighbourhood is home to a more than a dozen new (or improved) ultra-high-scale retail brands — Vancouver’s answer to Rodeo Drive in Los Angeles.

Tiffany & Co. Canada vice-president Wendy Eagan said in a statement that her company’s decision to expand is not only in celebration of their 10th year on Alberni, but also because business has been brisk.

“Identified all those years ago for its growing status as an international business centre surrounded by immense natural beauty, the Vancouver community has embraced Tiffany and allowed us to flourish,” Eagan said. “It is with great pleasure that we give back to our existing clientele and welcome future clients, and tourists alike, with what will be a magnificent new shopping environment in honour of our 10-year anniversary in the city.”

De Beers’ Minchenko, however, is aware that the luxury retail sector is often polarizing by nature, due to the narrow demographic it caters to. But he also noted his previous stop in Dubai as a powerful example of how luxury retail can kickstart all facets of the community’s economy.

“Despite varying opinions, the bottom line is that luxury retailers help grow the local economy,” he said. “They attract visitors to certain cities flourishing with such businesses. The night and day difference before and after luxury retailers entered the city of Dubai is an example.

“To get a visitor to spend their money in Vancouver, it means taxes are paid, and energy is injected into the local economic engine, which helps drive everything forward. Instead of having clients spend in Los Angeles or New York — and they can — if they find the selection of goods they are looking for, they’ll come.”

CBRE’s Negris said he was actually surprised it took Vancouver up until the last few years to catch on as a luxury retail market. He added that, even though there are some opportunities left for brands to get in on Alberni, the lack of space may mean the “luxury row” — one of the city’s strongest retail sectors — will spill onto nearby Georgia St. and beyond.

There has been some concerns that some luxury retailers may have over-expanded in other markets in recent years, given China’s recent economic slowdown. Prada, for example, saw global sales stagnate in 2015 as sales in the U.S. fell nine per cent, according to Bloomberg. Analyst Zuzanna Pusz said in the report that “Prada continues to struggle following years of overexpansion in retail and high exposure to Asia.”

But Negris said Vancouver’s potential for luxury retailers is still very high, considering just how few of them are on Alberni Street when compared to the actual Rodeo Drive in Los Angeles. He added that the presence of the brands, which he anticipates will continue, represents a natural maturation of Vancouver’s retail scene.

“As population grows and more money flows to our city, I think it’s just our city growing up a little bit in terms of the retail market,” Negris said. “It’s a maturing process (and) Vancouver is still a very young market. If you go into more mature luxury retail markets like New York, London and Paris, there’s a lot of brands — with multiple stores in one city — that aren’t yet here. Vancouver is just getting the first ones right now.”

With a file from Aleesha Harris

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