• Monday , 24 June 2019

Cashback News – Mar 17: Canadian retail roundup – The bad news edition

Today we’re looking at e-commerce and retail and focusing on some of the bad news stories and the lessons learned from struggling stores closing or retailers who aren’t adapting fast enough or far enough. We start with high-profile Canadian retailer Danier Leather scheduled to close all 76 stores, victims of tough international competitors and e-commerce. Trendex said in a 2016 retail apparel market forecast that luxury retail sales will grow 2.4% but drop to 1.7% in 2017. Sears Canada is stepping up the pace of store closures, raising questions about its survival. Sobeys, Safeway Owner Empire Co. posted a $1.36-billion loss after its writedown of assets in western Canada, following the acquisition of Safeway.

Target Canada reached a deal with its landlords of its former 133 Canadian stores pledging $0.66 to $0.77 on the dollar owed to its former landlords. Beauty subscription service Birchbox laid off 15% of global staff and closed its entire Canadian operations. 2015 holiday sales at Best Buy in Canada dropped 26%. Laura, with 150 stores across Canada, filed for protection in December 2015 but said sales are on the rebound so it will continue with plans to close stores, reduce costs and continue to operate. Tough times in Canada eh?

Canadian retailers closing amid intense competition, failure to adapt to market

http://www.cbc.ca/news/business/canadian-retailers-closing-1.3485248In fashion, everyone knows that you’re only as good as your last season. But now, you also have to be fast and adaptable, which is something many Canadian retailers — like Danier Leather, Laura, Smart Set and Jacob — haven’t been able to do.

All 76 Danier Leather stores across Canada set to liquidate inventory as chain closes and Canadian retailers adapt to competitive new reality. Canadian fashion retailers face tough outlook, but luxury brands poised to do well.

In Canada, many retailers had a “great thing going for years,” according to Farla Efros, the president of HRC Advisory, a retail consulting firm. There wasn’t much competition and the economy was stable. But that all changed with the recession and the onslaught of international competition. Via cbc.ca

Danier Leather stores liquidating as retailer starts winding down

http://www.cbc.ca/beta/news/business/danier-leather-liquidation-1.3479161Danier is currently liquidating its inventory at its remaining 76 stores across Canada. Store closing sales start Tuesday at the remaining Danier Leather stores and outlets in Canada.

The retailer entered insolvency proceedings last month as it attempted to find a buyer. The liquidators say in addition to their current inventory, the stores are receiving new shipments from warehouses. The store fixtures, furniture and equipment are also for sale.

The company began insolvency proceedings last month, saying at the time that it hoped to find a buyer. But that apparently hasn’t happened as all 76 stores of the chain across Canada are set to close in the coming days and weeks. Via cbc.ca

Canadian fashion retailers face tough outlook, but luxury brands poised to do well

http://www.cbc.ca/beta/news/business/canada-retail-fashion-1.3438364Retailers that cater to the middle of the market aren’t expected to have great years, but several high-end chains are ramping up to do battle for Canadians’ wallets. Industry watchers say Canada’s retail clothing sector is expected to slow in the coming few years even though the battle for luxury shoppers is revving up.

After two years of growth approaching four per cent, sales are forecast to slow and bottom out to a mere one per cent increase in 2018, says Trendex North America, a marketing research firm specializing in the clothing industry.

This year’s sales are expected to grow by 2.4 per cent this year versus 3.8 per cent last year, slipping to 1.7 per cent growth in 2017 before inching back up to 2.1 per cent growth in 2020, Trendex said in a 2016 retail apparel market forecast. But that could prove optimistic because the organization’s outlook for economic is much stronger than the Bank of Canada’s revised forecast of 1.4 per cent. Via cbc.ca

Sears Canada races to close more stores amid cost-cutting efforts

http://www.theglobeandmail.com/report-on-business/sears-races-to-close-more-stores-amid-cost-cutting-efforts/article28365748/Sears Canada Inc. is stepping up its efforts to close another round of stores, raising more questions about its fate and putting pressure on landlords who already have a lot of empty retail space.

The struggling Sears has instructed real estate firm CBRE to look for alternative uses for Sears’s weakest stores, such as its clearance outlets, Brandon Stranzl, executive chairman of Sears Canada, said in an interview this week. As well, Sears officials are working internally to shrink its store network.

He said “everything and anything” is on the table as Sears races to cut costs and revive its core full-line department-store business amid tumbling sales. “We’ve got this network we’re going to rationalize and we’re going to figure out which stores make the most sense,” said Mr. Stranzl, who took the top job last summer. “We’ve got a higher level of activity today than in the past few years” in looking to drop sites. Via theglobeandmail.com

Sobeys, Safeway Owner Empire Co. Posts $1.36-Billion Loss

http://www.huffingtonpost.ca/2016/03/10/troub-ed-safeway-acquisition-by-sobeys-hits-empire-with-1-36-billion-q3-loss_n_9426056.htmlThe company behind the Sobeys grocery chain has written down the value of its western business, primarily the Safeway chain, resulting in a loss of $1.36 billion in its latest quarter. The loss was largely due to a recognition that the long-term value of the Safeway business is lower than previously estimated.

Excluding that writedown and certain other items, Empire Co. would have had $82.5 million of adjusted earnings in its fiscal third quarter — down 36.1 per cent from $118.6 million. The net loss amounted to $5.03 per share, which included a $1.59-billion writedown of goodwill associated with the Safeway purchase. After adjustments, Empire earned 30 cents per share in the 13 weeks ended Jan. 30. Via huffingtonpost.ca

Target reaches deal with Canadian landlords as it winds down there

http://www.startribune.com/target-reaches-settlement-with-canadian-landlords-close-to-end-of-wind-down/371326301/Target is getting closer to closing the book on its Canadian debacle. The Minneapolis-based retailer cleared a major hurdle by reaching a settlement Friday with the landlords of the 133 stores in Canada it shuttered last year.

In January, a Canadian judge in Ontario Superior Court had struck down the company’s previous proposal, which some landlords had objected to, saying that Target Corp. was not fulfilling its original promise to cover future losses in the event of store closures. Under the amended plan Target Canada announced late last week, landlords will get 66 to 77 percent of their claims. Via startribune.com

Birchbox CEO Katia Beauchamp on startup funding

http://www.businessinsider.com/birchbox-ceo-katia-beauchamp-on-startup-funding-2016-3Birchbox laid off 45 people — 15% of its global workforce — and shut its business in Canada last month. Beauchamp says the cuts were “extremely hard” and were in part due to the venture capital purse strings tightening over recent months.

Beauchamp says: “There is a contraction in people’s willingness to invest in companies and people’s willingness to invest in growth. What this allows us to be is in control of our destiny instead of reliant on additional outside capital.” Via businessinsider.com

Best Buy Canada Sees Massive Drop In Holiday Earnings

http://www.huffingtonpost.ca/2016/01/15/best-buy-canada-holiday-earnings_n_8991716.htmlBest Buy is predicting a 30-per-cent drop in its Canadian sales for this quarter, following a disappointing holiday sales season that analysts blame on online sales and a lack of exciting new gadgets.

Sales at Best Buy’s international division fell a steep 26 per cent in the nine-week holiday shopping period ending January 3, the company reported this week. Revenue was US$911 million, down from US$1.23 billion during the 2014 holiday season. Minnesota-based Best Buy doesn’t break out its numbers for Canada, but the country accounts for most of the electronics retailer’s international sales. The company also operates a small number of stores in Mexico. Via huffingtonpost.ca

Laura clothing chain files for creditor protection

http://www.cbc.ca/beta/news/business/laura-clothing-chain-files-for-creditor-protection-1.3179305Canadian women’s fashion retailer Laura’s Shoppe, which owns Laura, Laura Petites and Melanie Lyne, has filed for creditor protection. The company, with more than 150 stores across the country, said it expects to close some underperforming stores but plans to keep doing business as usual while it restructures.

Laura admits it experienced large losses in 2012 and 2013, but president Kalman Fisher said sales have since rebounded. A filing under the Companies’ Creditors Arrangement Act protects the retailer from claims by creditors while it revamps its operations. Via cbc.ca

Clouds still on horizon for Canadian retailers

With the small exception of luxury retail, clouds remain on the horizon for many Canadian retailers as they struggle with international competitors and the impact of e-commerce

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