Loblaw's Joe Fresh to take Manhattan

Loblaw Companies is heading back to the United States, not as a purveyor of food but of fashion.

The country's largest grocery chain announced Wednesday that it will open four Joe Fresh clothing stores in New York by the end of this year.

The first, to open in the fall, will be on the corner of Fifth Avenue and 43rd Street, near the New York Public Library and Bryant Park. The area is close to New York City's famed Fifth Avenue shopping district.

The Joe Fresh store will be housed in what is known as the Glass Box building, a five-storey structure built in 1954 as a bank branch that Loblaw says it will remodel. The company is also revamping the Joe Fresh logo in time for the opening.

In a release, Loblaw said it has received requests from American who purchased Joe Fresh products in Canada to bring the brand south. Executives said they anticipate style-conscious New Yorkers will be wowed by Joe Fresh's cheap yet chic clothing and accessories, created by the Canadian fashion designer Joseph Mimran.

However, in a speech to analysts in Toronto today, Loblaw's president Allan Leighton stressed the move into the United States is a pilot. "This is something we have to move into in a very cautious way," he said.

Leighton did suggest there is untapped potential to the Joe Fresh brand. It has a relatively small market share in apparel, he noted, and the goal is to grow it into a $1-billion brand in terms of sales.

In Canada, Loblaw will open 20 stand-alone Joe Fresh stores in the coming months. The first such store opened in Vancouver last fall and more are planned in Ontario and Alberta, in malls and downtown locations. Each will be 6,000 to 18,000 sq. ft. in size.

Up until last year Joe Fresh clothing was only sold inside Loblaws grocery stores. Leighton said stand-alone stores will open in areas where they can't be fit into the supermarket format.

This isn't the first time Loblaw has operated south of the border. The company ran its own stores in several northern states in the 1920s and '30s and also for a time owned National Tea Company, a large U.S. grocer.