We are now coming into the second month of 2018 and as always, It’s survival of the fittest when it comes to Canadian retail. While some struggling brands manage to restructure and optimize operations following filing for bankruptcy protection, others are left swirling in a downward spiral toward being obsolete. We hate to see retail closures result in layoffs, liquidations and losses, but there are a few big brands that may just be headed in that direction come 2018. The truth is, retailers are struggling and these stores might be in trouble. Keep reading for all of the details.
We reported in May 2017 that Michael Kors had plans to close over 100 stores due to declining sales. Stores on the chopping block have not yet been revealed. Industry experts say that the drop in sales is a result of the brand’s decrease in perceived value. Michael Kors has discounted handbags in an effort to target value-driven shoppers, at the same time losing their luxury appeal.
Toys “R” Us
Toys “R” Us made headlines in September 2017 with the announcement of filing for bankruptcy protection. This major toy retailer has no plans to close stores. However, this will likely be determined following 2017 Q4 results from a successful (or lacklustre) holiday sales season. Toy “R” Us currently operates 82 stores in Canada.
Gap and Banana Republic
GAP Inc. announced in September 2017 that they would be closing 200 Gap and Banana Republic stores over the next three year. Striving brands Old Navy and Athleta will see new 270 stores open.
Tip Top Tailors
With big debt looming and a bankruptcy protection announcement in January 2017, Tip Top Tailors owner Grafton-Fraser Inc. felt pressure to restructure earlier this year. In June 2017, twelve underperforming store locations closed following the sale of the business to GSO Capital Partners. With hundreds of jobs lost with the handful of closures, who knows what other changes this retailer will see under its new ownership?
Abercrombie & Fitch
Once a mall-goer’s destination, Abercrombie and Fitch is now a fading memory of collegiate style. Since 2015, the number of A&F Stores across North America has dwindled despite efforts to reinvigorate the brand.
Ann Taylor, LOFT and Justice
An announcement by Ascena Retail Group to indefinitely close between 250 and 650 stores by July 2019 will shock the retail landscape. Ascena Retail Group, the owner of retail brands operating in Canada such as Ann Taylor, LOFT and Justice, is hoping to close stores in an effort to reduce costs and pursue rent breaks with landlords to keep remaining stores open.
In January 2017, Canadian denim emporium Jean Machine filed for bankruptcy protection. In March 2017, Jean Machine was purchased by Comark Services Inc. to save the struggling retailer. With 30 locations across Ontario, new owners plan to reinvigorate stores with brighter lighting and paint. Time can only tell if the changes are successful.
Will you be sad if any of these struggling brands close their doors in Canada?
Featured Image: Instagram/@JeanMachine
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