Vancouver shop owner Boris Chenkis, exasperated by cross-border shopping, has begun fighting fire with fire. He’s cross-border retailing.

Six months ago, the owner of After Five Fashion stores opened his first retail outlet in Blaine’s Birch Bay Square. The mall is owned by Canadian investors and is just 10 minutes from the Pacific Border Crossing.

Now, 70 per cent of business at that outlet is from Canadian customers.

The phenomenon may come to be known as “Blaine drain.”

“Now we don’t look like the bad guy-retailer in Canada, charging more than a store in the U.S.,” says Chenkis, who is planning a shopping website. “We explain [to customers], for example, why a prom dress costs more in Canada ... and if they want to save money they can go to our Blaine store.

“Though most customers still do buy with us in Canada, some will make the trip to save a few dollars, while getting gas, milk and eggs.”

The Vancouver store, at Oakridge Centre mall, offers alteration services to the Blaine outlet’s customers.

The retailer says his prices in Canada are higher because he must pay an 18-per-cent duty on the clothing he brings in to stock his Canadian stores.

He tried reducing his Vancouver prices to compete with the cross-border trend — as well as with a newer trend of show rooming, where customers try on a dress in the store but subsequently order it online.

“But we were told by some Canadian distributors that we could not drop our prices ... or the designer line would be taken away from us,” a frustrated Chenkis says. “I am not happy we had to open a store in the U.S. Our federal government, in their lack of understanding of the real world of retail and the effect of the Internet on business, has forced us to open in the U.S.”

Cross-border retailing, if it should catch on, would not be a positive development, as it would lead to fewer retail and manufacturer’s representative jobs in Canada and less retail tax revenue.

Chenkis, who presides over the 54-year old fancy dress business established by his parents, is critical of the Harper government for opting to ease cross-border shopping exemption limits.

As June 1, returning travellers outside Canada for 24 hours to 48 hours can bring back $200 worth of tax-exempt goods, up from $50 previously. For those gone more than 48 hours, the exemption was raised to $800, from $400.

Chenkis also is concerned about competition Vancouver stores will soon face as American retail giants Nordstrom and Saks Fifth Avenue prepare to open outlets in the city. Stores like Target, Eileen Fisher, Banana Republic, Gap and Anthropologie already have invaded.

“They say the best defence is an offence,” says Chenkis. “With all the retailers coming into Canada, we made a decision to open in the U.S. This is not something I ever dreamed I would have to do, to stay in business, as a Canadian retailer.”

Chenkis has found the rent for his shop in Blaine is “very reasonable.” His operating costs are a tenth of what he pays in Vancouver.

Canadian customers recognize his brand “and, with a Nexus pass, are happy to shop there, usually paying less than they would in our Oakridge [mall] store. … We leave it to [the shoppers] to take care of any duty owed to Canada customs.”