Would you shop for a car at Sherway Gardens?

General manager Andy Traynor, now overseeing the final stages of a $550-million redevelopment of the Etobicoke mall with the iconic white tenting, is betting you will.

Traynor won’t reveal the name of the car company (building permits filed with the City of Toronto name Tesla), but adding unexpected tenants to the retail mix is the new reality for malls operating in a landscape that has changed profoundly since 2012, when the redevelopment project was announced.

The frothy exuberance of that time, when U.S. retailers still saw Canada as a great bet for international expansion, has evaporated.

In October 2012, when Cadillac Fairview said it would spend $350 million expanding Sherway by 210,000 square feet, department store retailer Nordstrom had just announced it was moving into Canada and Target employees were working madly to transform Zellers locations into Target stores in time for an early 2013 deadline.

Since Target Canada sought creditor protection in January 2015, pulling the plug less than two years after launch, retailers in the U.S. and Canada have been toppling like dominos, the latest in Canada being Sears, now also operating under creditor protection as it liquidates the contents of 59 stores.

The result has been fewer tenants for more mall spaces, forcing mall owners to consider new partners. Tesla already has a store at Yorkdale. Mercedes-Benz has a store inside the Aberdeen Centre in Richmond, B.C. and is preparing to open another one at CF Markville in Markham.

Restaurants have also picked up some of the slack, including the Keg at Sherway Gardens, with customers lining up for tables most nights of the week, according to Traynor.

The mall is looking at the idea of a wellness clinic, offering sports medicine and physiotherapy. A dental office is planned.

“That’s something we haven’t had in 10 years, but it serves the community beautifully,” said Traynor.

The expanded north wing opened in September 2015, with 50 new stores, a stunning new food court and additional parking, including a parking navigation system that makes it easier to find vacant spots.

The new south retail wing opening Tuesday is in a space that was first expanded in 1989 – the year the tented roof was installed. It was originally anchored by a Bretton’s, a small, chic department store retailer that went bankrupt in Canada in 1996, after 11 years of operation.

Traynor has a long memory when it comes to retail in the GTA – he began his career as a student at Eaton’s.

“I started there as a student fixing bikes and mounting ski bindings and I fell in love with retail,” said Traynor.

He worked his way up the ranks, working as a buyer and then a store manager, before joining Cadillac Fairview, which operates flagship malls across Canada.

“That is what attracted me to working with Cadillac Fairview — you’re basically running one big department store with a lot of shops,” said Traynor.

The increase in cost of the Sherway redevelopment – from $350 million to $550 million – has not been an issue with the mall’s owners, the Ontario Teacher’s Pension Plan (OTPP), said Traynor.

“Returns have been positive and we are pleased with the results of the development,” said Deborah Allan, a spokesperson for the OTPP.

The extra investment included buying a Sears store lease back from Sears Canada to convert the space to include a Saks Fifth Avenue, additional renovations and redevelopment of the south wing for Nordstrom, and an additional parkade.

“The return on investment is there. It’s performing exactly as we thought it would perform, which is very encouraging,” said Traynor.

The new south wing includes a 32,000-square-foot Zara flagship and some newer retailers, including L’Intervalle (shoes) and BonLook (eyeglasses) and the Danish Pastry House, a family business based in Oakville.

Nordstrom will be the new anchor in the south retail space at Sherway, opening Sept. 15 on more than 140,000 square feet on two levels.

Store construction is complete, according to Nordstrom spokesperson John Bailey. Merchandise began arriving Friday.

The new store will most closely resemble the Yorkdale Shopping Centre store, which was also built from the ground up and features lots of windows to bring in natural light, according to Bailey.

Loading... Loading... Loading... Loading... Loading... Loading...

Brian Winston, founder and principal of retail consultancy The Winston Collective, said he doesn’t think Sherway has gone too upscale by adding a Saks Fifth Avenue and a Nordstrom.

The mall still offers a mix of moderately priced stores and stores that while upscale, are not in the stratosphere.

“They may not be inexpensive, but when we look at Loding, the men’s shoes and accessories are really reasonably priced for a better product,” said Winston.

He said Sherway Gardens pulls shoppers from Burlington, Oakville and even Hamilton — and from the condos that have sprung up along the Lake Ontario shoreline, a short drive away.

The number of top-tier malls in Canada has shrunk and those malls that have survived need to keep innovating to maintain market share, according to Dianne Lemm, principal partner, mall services, with the retail real estate consultancy Northwest Atlantic

“I think in Canada in general we used to talk about the top 40 malls being great malls and really strategic and today, we’re no longer talking about the top 40 malls, we’re now really talking about the top 15 to 20 malls,” said Lemm.

The change was driven by the growth of online shopping but also by the increase in number of higher price-point and luxury retailers who tend to open fewer stores in each market.

Sherway Gardens is in the top tier and to stay there it has to redevelop, said Lemm. If not, tenants will pass it over in favour of malls that are investing in enhancing the shopping experience.

Lemm points out that most top tier malls in Canada have made meaningful investments in their properties in the past few years.

Cadillac Fairview, a wholly owned real estate subsidiary of the Ontario Teacher’s Pension Plan, spent $2 billion over the past five years updating its properties, including Sherway. Oxford Properties, which operates Yorkdale Shopping Centre and Square One, among other top-tier malls, spent about the same.

Ivanhoé Cambridge, another top player, just spent $230 million updating the Oshawa Centre.

“In retail the big is getting bigger,” said John Crombie, senior vice-president at Triovest, a commercial real estate firm.

“I don’t know what the returns are going to be, but I can tell you, today you have to stay pretty relevant in the retail business and you have to put money back in because consumers aren’t going to be fooled, and if the place starts looking tired, that’s going to be a reason for shoppers not to come, so it’s almost one of the things you have to do.”

Traynor believes retail is stabilizing. Malls are working well with online retailers, including brands that began online and expanded into bricks and mortar, like Frank and Oak.

“We’re doing very, very well, our traffic is up, our sales are at a historical high, both in terms of volume and productivity. We’re very pleased with the outcome, customer reaction has been terrific,” Traynor said.

He points out that U.S. retailers remain interested in expanding in Canada – Footlocker is expanding its location in the mall, taking over a former American Apparel space and adding an Adidas shop-in-shop.

A new Cactus Club restaurant will open next March, across from the Keg.