Montreal’s Frank and Oak opened a store in mid-December on Vancouver’s upscale Robson Street, but it declined to commit itself to a long lease.
Instead, the 15-store chain signed a one-year lease for the 1,000-square-foot space at 1173 Robson Street, the brand’s COO, Hicham Ratnani, told Business in Vancouver.
The move is a response to rapidly changing dynamics in today’s retail environment, he said.
Many of Frank and Oak’s other stores are extended pop-up shops, given that they are also on one-year lease terms. That is the case with the chain’s two other womenswear stores, in Toronto and Montreal, which opened earlier this year.
Frank and Oak’s first Vancouver store opened in 2015 and operated under a one-year lease for space on Abbott Street in Gastown. When the lease expired, company executives determined that the store was successful enough to move to a larger location, so they signed a longer lease at 316 West Cordova Street.
“The key areas that Frank and Oak executives really need to keep flexible are investments in technology, which can take years and really box you in, and real estate – and they know that,” said DIG360 principal and retail analyst David Gray.
“They’re against long-term leases and are on the front end of that trend. We’re going to see more and more retailers pushing back on lease terms or giving themselves ‘out’ clauses or ways to get out of longer leases.”
Frank and Oak launched in 2012 as an online-only menswear brand. Its sales strategy gave subscribers discounts on purchases if they bought boxes filled with multiple clothing items.
Ratnani would not reveal how significant those sales are to the company’s current balance sheet. Nor would he reveal a ballpark figure for the company’s revenue or its growth rate for total sales.
The brand opened its first stores in 2014, and they were all exclusively for menswear.
It now operates 12 stores that sell menswear, including the store on West Cordova Street that also has a womenswear section.
“We always want to look at it step by step,” Montreal-based Ratnani told BIV while on a visit to his Robson Street store.
“The interesting thing as an omnichannel retailer is that this store could also be a great success at bringing more customers to the website.”
Retail Insider Media owner and retail analyst Craig Patterson said he is unsure how well Frank and Oak is doing in terms of sales.
He added that the company’s corporate brand needs more clarity.
“They’ve changed their branding four times, so I’m not quite sure what’s going on with the company,” he said.
“First it was ‘Frank & Oak,’ with an ampersand, and then ‘Frank and Oak,’ with an ‘and.’ Then the brand had a plus sign, and now it’s got an ‘and’ again. That’s four iterations.” •