Can high-end U.S. retailers succeed where Target failed?

A makeover of luxurious proportions is about to embellish the Canadian retail landscape.

Thursday marks the official opening of Saks Fifth Avenue’s first Canadian store at Toronto’s Eaton Centre. Sherway Gardens will open its store on Thursday, Feb. 25.

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Take a peek inside Saks Fifth Avenue’s new Toronto flagship store

These grand openings, however, are merely a primary palate teaser for fashion aficionados in the GTA. Saks Fifth Avenue’s opening, coupled with upcoming arrivals of fellow U.S. giant Nordstrom and Quebec-based Simons, is bringing an influx of luxury options into a market that had been dominated by retailers Holt Renfrew and Harry Rosen.

On top of the traditional stores, Saks will open up an “Off Fifth” depot, and Nordstrom will be introducing shoppers to its lesser-priced Nordstrom Rack.

“After more than two years of planning, our entry into Canada is truly a milestone for our company,” says Marc Metrick, President of Saks Fifth Avenue.

A milestone indeed, but questions about the demand for such opulence are valid. The Canadian dollar is just grazing 73 cents, and debt vulnerability is set to climb.

Chris Sorensen, business writer at Maclean’s Magazine, says these entries into Canada come at a very unique time compared to when their openings were first announced.

“The Canadian market looked a lot brighter than it does today,” he says. “You’d have to think that things looked a lot better when they first announced this, and now that the store’s finally ready the question will be: Are people still going to come in there and shop at the rate that they initially expected?”

Perhaps the question is best answered, though, by the shoppers themselves, eagerly peeking beyond the Saks signs on Yonge Street to see what awaits them inside.

“It’s kind of exciting,” says Sandra. “Lots of great selection and a hot spot for women to shop.”

The entry of American retailers onto Canadian soil isn’t a fresh concept, nor has the process always been flawless. Take the rise and fall of Target, which pulled the plug on its Canadian operations within two years of the stores’ openings.

When it comes to Saks, the difference here could lie in the stores’ tactics and its history.

“They’re owned by Hudson’s Bay Company, which has three centuries of experience in Canada,” Sorensen says. “They know the market, the intricacies, the sensitivities. They’re not going to make any silly mistakes.”

Slow and steady may also be what wins the race.

“I certainly think we’re taking an opportunistic approach to our Canadian expansion,” Metrick says. “Right now the focus of the business is on the two stores opening this week. And from there we’ll go and we’ll see how we do. But look – if the right opportunity in the right place presents itself, we’re of course ready.”

And so is the competition. According to Larry Rosen, CEO of Canadian menswear magnate Harry Rosen, they’ve been aware for a while that change was on the horizon.

“This gave us plenty of opportunity to plan accordingly,” he says. “And, just as the opening of Nordstrom’s in Vancouver had no impact on our business, we expect the same will be true here in Toronto. If anything, it draws more traffic to the mall and we always benefit from increased traffic.”