Caisse de dépôt et placement du Québec (CDPQ) and Investissement Québec (IQ) have invested $44 million in La Maison Simons Inc., a family owned firm. CDPQ and IQ are investing $27 million and $17 million respectively.
CDPQ and IQ investment will form part of a $215 million investment for a new, state-of-the-art, multi-service fulfillment centre slated to open in 2020.
Québec government will provide an $81 million term loan, $51 million of which will be used to purchase automated equipment.
The multi-service fulfillment centre’s construction will begin over the next few weeks. Property financing (building and land) required the implementation of a real estate partnership that will involve the Simons family, CDPQ, IQ, and Fonds immobilier de solidarité FTQ which is contributing $20 million for purchasing the land and building the new centre, which will be worth approximately $100 million. Based on the agreement, Simons will be the long-term tenant of the facility.
Founded in 1840 by John Simons and currently led by brothers Peter and Richard Simons, Simons offers an extensive and fashion-forward collection of its own exclusive and innovative private label brands for men and women. Simons also carries home fashions for the bedroom, bathroom and kitchen.
photo credit: Simons
News Release
Simons announces major investment in a new, state-of-the-art, multi-service fulfillment centre
PRIVATE EQUITY, QUÉBEC
QUÉBEC CITY, MAY 29, 2018
By joining forces with strong, local financial partners, the family business founded in Québec City in 1840 ensures its sustainability and solidifies Québec as an e-commerce hub
With Ms. Dominique Anglade, Deputy Premier, Minister of Economy, Science and Innovation and Minister responsible for the Digital Strategy, Mr. Sébastien Proulx, Minister of Education, Recreation and Sport, Minister responsible for the Capitale-Nationale region and Mr. Régis Labeaume, Mayor of Québec City in attendance, Mr. Peter Simons, President of La Maison Simons, presented today the details of a cutting-edge, multi-service fulfillment centre to open in 2020, which will enable Simons to pursue its growth strategy, respond to consumer demand and ensure its sustainability.
The new fulfillment centre will leverage unique, state-of-the-art automated equipment and technologies that will allow Simons to increase its productivity and order fulfillment capacity, both in store and online, thereby remaining competitive in a constantly evolving retail market.
“The fast-paced evolution of the Internet and its navigation technologies is changing consumer habits.” said Mr. Simons. “Our clientele is increasingly choosing to complement their in-store shopping experience with online purchases, which is why we invested in our e-commerce infrastructure over the past few years. A new fulfillment centre allows a company such as ours to respond to our rapidly growing online business while supporting our continued store expansion. It also allows us to rethink our order fulfillment processes to better support our distribution centre teams. By providing our employees with the latest technology to be more efficient and productive, we will become more competitive and be able to create more high quality jobs.”
MAJOR PARTNERS FOR A MAJOR INVESTMENT
Simons’ growth over the years is not a coincidence, but rather the result of shrewd and sometimes risky decisions from five generations of entrepreneurs. It is with that same entrepreneurial spirit that Simons has chosen to work with several partners to finance this significant investment of $215 million to maintain its leadership position among major players in the e-commerce and digital economies.
As part of the ESSOR program, the gouvernement du Québec will provide an $81 million term loan, $51 million of which will be used to purchase automated equipment. This involvement in the financial arrangement, which is not a subsidy, will enable Simons to acquire efficient and innovative order preparation, processing and delivery solutions.
“Without the unwavering support of our banking partners, suppliers and employees, many of our projects would never have gotten off the ground,” continued Mr. Simons. “However, a major investment like this requires a complex financial arrangement necessitating more than one financial partner. As we implemented our vision, we had to find the right way to achieve our goal, while maintaining our roots in Québec City and Québec. With the support of the gouvernement du Québec, Caisse de dépôt et placement du Québec (the Caisse) and Investissement Québec, we believe we found people that share our values.”
For Simons, this marks a new and important phase, as for the first time in its history, it is opening its share capital to external partners. Specifically, the contributions of the Caisse and Investissement Québec will complete a robust and agile financial structure. The investments totalling $44 million, $27 million of which came from the Caisse and $17 million from Investissement Québec, using its own funds, will enable Simons to begin a new phase of sustained growth. For these two investors, this long-term participation in a top-tier Québec-based player in e-commerce reflects the importance they give to digital transformation within Québec’s corporate world, which is an essential means to move toward a digital economy, as well the role they wish to play in this process.
“Digital maturity is part of the criteria we focus on when we invest in a company,” said Christian Dubé, Executive Vice-President, Québec, at the Caisse. “Simons, which has transformed and innovated throughout the years, always implemented relevant measures to stay at the forefront of its sector, especially with regard to e-commerce. By embracing the digital shift at the right time, the company was able to tap into this important market, which now requires it to broaden its facilities. Through our investment, we aim to enable Simons to keep expanding and remain a vanguard of its industry.”
“Maison Simons’ project is truly innovative,” said Pierre Gabriel Côté, President and CEO of Investissement Québec. “The new multi-service fulfillment centre will bring a higher level of automation and integrate robotized and computerized operations. Consequently, Investissement Québec’s decision to join forces with La Maison Simons and its partners was a natural one in order to drive the success of a company that has been deeply rooted in Québec’s landscape for years.”
Simons continues to be supported by its banking partners, which include Bank of Montreal (BMO), National Bank and, more recently, Desjardins, for its building financing and working capital.
A MULTI-SERVICE FULFILLMENT CENTRE NEAR SIMONS’ ROOTS
The City of Québec’s support was indispensable in selecting a sufficiently large and accessible site for the new facility. By backing such a major, forward-thinking project to support online commerce, the City shows vision and actively participates in the shift toward a digital economy.
“The City is proud that this project will take shape in the new Espace d’Innovation Chauveau,” said Québec City Mayor Régis Labeaume. “This will ensure Simons’ competitiveness as part of its expansion efforts over the past few years, as it continues to embrace the e-commerce industry’s incredible growth. The company will ensure 450 quality jobs at the multi-service fulfillment center located in the Québec City area. Through its brilliant success, local roots and exemplary community involvement, Simons is making our city and its citizens extremely proud.”
The multi-service fulfillment centre’s construction will begin over the next few weeks. Property financing (building and land) required the implementation of a real estate partnership that will involve Simons’ owners and the Fonds immobilier de solidarité FTQ. This represents a direct contribution of $20 million by the Fonds immobilier for purchasing the land and building the new centre, which will be worth approximately $100 million. Based on the agreement, Simons will be the long-term tenant of the facility.
“Through the Fonds immobilier de solidarité FTQ, we are taking part in the construction of one of Canada’s leading multi-service fulfillment centres integrating the latest generation of sophisticated automation, particularly for online order processing,” said Mr. Normand Chouinard, Executive Vice-President, Investments of the Fonds de solidarité FTQ. Its construction will create 900 direct and indirect jobs and, by 2020, it will offer a stimulating work environment to the employees of Simons, one of the jewels of Québec’s economy.”
REPURPOSING THE EXISTING DISTRIBUTION CENTRE
In addition to its new fulfillment centre, Simons will leverage its online marketing expertise in collaboration with the Ministry of Economy, Science and Innovation to implement a multi-client
e-commerce center in the existing distribution centre. Of the $81 million term loan granted to Simons by the gouvernement du Québec, a sum of $30 million will be used to maintain the existing facility that will house this “e-commerce accelerator”. Upon its launch, this innovative virtual marketplace will enable artisans and small businesses, among others, to benefit from a set of skills and services Simons honed over time. By having access to this e-commerce knowledge ecosystem, businesses will be able to take advantage of the power of the web to market their products and services.
“We are thrilled to be involved in this project which maximizes our existing distribution centre and helps other businesses transition to the digital economy, thanks in large part to our e-marketing expertise,” concluded Mr. Simons.
ABOUT SIMONS
Simons was founded in 1840 by John Simons as a dry goods store in Québec City and has since built its reputation on being an accessible and inspired fashion brand. Simons is led by brothers Peter and Richard Simons who carry on the family legacy and the brand’s commitment to cultivating creativity, building meaningful relationships with staff, partners and customers, and being mindful of the environment and the communities where they do business.
Simons offers an extensive and fashion-forward collection of its own exclusive and innovative private label brands for men and women, complemented by today’s leading labels, discovery brands from around the world and an edited collection of Canadian and international designers, making it well-known for its exceptional selection of merchandise for everyone. Simons also carries home fashions for the bedroom, bathroom and kitchen.
All 15 Simons stores are compelling, original environments that inspire customers through fashion, art and architecture. Locations: nine in Québec (three in Québec City, including its headquarters in Old Québec, plus Montréal, Anjou, Laval, Saint-Bruno-de-Montarville, Sherbrooke, Gatineau); two in Edmonton (West Edmonton Mall and Londonderry); West Vancouver, British Columbia; Calgary, Alberta; and Mississauga and Ottawa in Ontario.
Visit www.simons.ca or follow on Instagram: @maisonsimons, Facebook: facebook.com/simons.ca, Twitter: @SIMONS_eng (EN) or @Simons (French).
ABOUT CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC
Caisse de dépôt et placement du Québec (CDPQ) is a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans. As at December 31, 2017, it held $298.5 billion in net assets. As one of Canada’s leading institutional fund managers, CDPQ invests globally in major financial markets, private equity, infrastructure, real estate and private debt. For more information, visit cdpq.com, follow us on Twitter @LaCDPQ or consult our Facebook or LinkedIn pages.
ABOUT INVESTISSEMENT QUÉBEC
Investissement Québec’s mission is to foster the growth of investment in Québec, thereby contributing to economic development and job creation in every region. The Corporation offers businesses a full range of financial solutions, including loans, loan guarantees and equity investments, to support them at all stages of their development. It is also responsible for administering tax measures and prospecting for foreign Investment.
ABOUT THE FONDS IMMOBILIER DE SOLIDARITÉ FTQ
The Fonds immobilier de solidarité FTQ promotes economic growth and employment in Québec by strategically investing in profitable and socially responsible real estate projects in partnership with other industry leaders. The Fonds immobilier backs residential, office, commercial, institutional and industrial projects of all sizes across Québec. As at December 31, 2017, the Fonds immobilier had 47 projects in development, 53 properties under management, 14 million square feet of land and $71 million invested in social, community and affordable housing. The Fonds immobilier is a member of the Canada Green Building Council.
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For more information
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medias@cdpq.com