Not ‘luxury’ enough? Toronto’s Yorkdale mall owners fight to keep Fairweather out

Yorkdale Shopping Centre’s owner is trying to block a Fairweather brand from moving in, arguing in court it would dilute the mall’s luxurious reputation.

Fairweather Ltd., an affordable womenswear company, wants to take over the space once occupied by Hudson’s Bay. It plans to revive the mostly-defunct, Quebec-based department store Les Ailes de la Mode under the name “Ailes,” according to court filings.

“Fairweather invests very little in its stores, with the result that they look and feel temporary and downmarket,” lawyers representing Oxford Properties wrote in a Jan. 9 factum to the Ontario Superior Court of Justice, which goes on to call the company “not creditworthy.” 

CBC Toronto made numerous attempts to reach out to Fairweather but was unsuccessful. However, lawyers representing the company looking to sublease the space to Fairweather have argued it is creditworthy and that Ailes would sell higher-end clothing.

Both sides are now awaiting the judge’s decision in the case, which could shape the future of one of Canada’s largest and best-known malls.

Fairweather belongs to business mogul Isaac Benitah, whose family empire also runs the chains Wyrth, Bombay and Bowring, and International Clothiers. The Benitahs also bought the rights to the discount retailer Zellers last year. 

Oxford’s legal team, headed by D.J. Miller, is arguing that an “unsuitable” tenant like Fairweather could lead to financial losses worth hundreds of millions. 

Fairweather, which operates over 100 stores across the country, did lease space at Yorkdale until 2020. But Oxford claims Fairweather doesn’t have the expertise or competence to manage a 300,000 square foot retail space because most of its other locations are about three per cent of that size. 

“I cannot overemphasize how inappropriate and detrimental it would be to have Fairweather occupy the most prominent premises at Yorkdale for even one year, much less the next 50,” said Nadia Corrado, a vice-president with Oxford, in an affidavit filed in November. 

Hudson’s Bay used to lease the Yorkdale space from Oxford through a joint venture with RioCan Real Estate Investment Trust. 

After Hudson’s Bay declared bankruptcy last year, FTI Consulting was appointed as the receiver of the joint venture — a legal process that makes FTI a neutral third party that controls the distressed company in order to recover money owed to its creditors.

FTI looked for retailers to take over the former Bay store and chose Fairweather, a decision RioCan supports.

Fairweather ”brings substantial retail operational experience and expertise” and is a suitable replacement for the Bay, according to RioCan spokesperson Stephanie Sallah, who said she cannot provide further comment while the matter is before the courts. 

FTI’s lawyers, led by Orestes Pasparakis, also argue Ailes would be positioned at a higher price point than Fairweather’s other brands, and that Fairweather is creditworthy and experienced. 

The company is already in the process of opening Ailes department stores at two former Hudson’s Bay spaces in “established malls” in Quebec, they say in their own factum, dated Jan. 2.

FTI’s lawyers also said Oxford is fighting the Yorkdale lease in the hopes of regaining control of the space.

Oxford’s lawyers said they weren’t consulted about Fairweather taking over the lease and didn’t consent to it, adding the company has no concrete plans for the space “beyond general considerations.”

A spokesperson for Oxford told The Canadian Press in November that Fairweather was only proposed as a tenant because RioCan wants Oxford to buy out the lease. 

“The creation of this dynamic appears to be an attempt by RioCan to shift its own obligations onto Oxford regarding the $75 million guarantee that it gave to its lender for the Yorkdale HBC premises,” Oxford’s senior vice-president of corporate affairs Daniel O’Donnell wrote in an email.

If it moves in, Fairweather’s annual rent would be $1 million, or 12 per cent of its gross sales, until 2029, far lower than the $2.8 million Hudson’s Bay paid in 2025, according to court documents. 

Oxford’s lawyers argued giving Fairweather Yorkdale’s largest space could “deter prospective tenants” and diminish the mall’s “overall performance and value.” They also said Oxford has been working to reduce the presence of Fairweather’s brands in all of its shopping centres, which exist across Ontario and Alberta, and that “no business plan for the proposed Ailes brand store exists.”

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They argued that while Fairweather intends to invest approximately $1.60 per square foot to improve the space, if the sublease is approved, other tenants at the mall typically invest between $250 to $400 per square foot.

Having Fairweather in Yorkdale’s biggest space could change people’s perception of the mall, according to retail analyst Bruce Winder.

“It sets the tone in terms of brand, it sets the tone in terms of price point image, and you can’t mess that up,” he told CBC Toronto. 

Although this legal battle is unusual, Winder said it’s similar to B.C. billionaire Ruby Liu’s failed bid to take over leases at former Hudson’s Bay locations. She had hoped to use them to open a new department store named after herself. 

Landlords, including Oxford Properties, argued her business plan was insufficient and she was too inexperienced.

“The Ruby Liu case may have set a precedent for this case,” Winder said.