Party City has filed for Chapter 11 Bankruptcy, Retail Dive reports. The bankruptcy was filed in the U.S., and Canadian stores are safe. Phew!
“Chapter 11 includes a restructuring process, giving a business or individual time to get their financial affairs back in order.” Credit Counselling Society states.
Party City is a chain of stores selling various supplies for parties with 38 locations in Ontario.
The retailer secured provisional court permission to pay suppliers and other vendors considered critical to its operations and a request for authorization to spend $12.7 million to pay key domestic and international vendors, as well as lien holders and other trade creditors was requested to a federal bankruptcy judge.
In total, Party City is expected to pay $74 million to its critical vendors throughout the course of the bankruptcy.
One of the main concerns is to be able to continue without supply chain disruptions, as that would result in losing customers by not being able to fulfill their needs.
A final hearing on Party City’s critical vendor motion is scheduled for Feb. 14. Retail Dive reports.
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A major player in the cosmetics department is in some hot water. Revlon Inc. has filed for Chapter 11 bankruptcy protection.
According to Retail Dive, Revlon Inc. cited more than $3 billion in debt and struggles with supply chain and inflation.
Debra Perelman, Revlon’s President and Chief Executive Officer, said in a release, “Today’s filing will allow Revlon to offer our consumers the iconic products we have delivered for decades while providing a clearer path for our future growth.”
Revlon Inc. is allegedly expecting to receive $575 million in financing which will cover the cost of day-to-day operations.
Retail Dive stated that the sales for Revlon Inc. “fell by more than half a billion dollars in 2020 and its net loss nearly quadrupled, before easing in 2021”
Perelman concludes that there’s still high consumer demand for Revlon products, but its capital structure has negatively affected the company in not being able to adapt to certain macroeconomic issues. Of course, we’ve seen this with many large and small companies through the last couple of years during the pandemic.
Filing for bankruptcy will allow Revlon Inc. to reorganize its capital structure and give it a chance to improve its business strategy.
Only time will tell if Revlon Inc. will be able to get back on track.
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It’s not looking too great for the go-to home retailer. Bed Bath & Beyond has apparently lost $175 million in sales due to out-of-stock items.
According to Retail Dive, executives have blamed the supply chain issues and inventory constraints that the company—as well as many others—have been enduring.
In order to try and dodge these challenges, over the last year Bed Bath & Beyond has attempted to undergo a transformation and introduce some new initiatives.
This included offering a handful of private labels as a way to create a larger assortment. Although, analysts have thought that these new brands weren’t different enough for consumers to actually reach for them over others. In turn, it didn’t make much of a difference in profit.
Bed Bath & Beyond also closed stores that weren’t meeting revenue goals as well as renovated others, but unfortunately, the lack of inventory was still a major problem.
Interestingly enough, GlobalData Managing Director Neil Saunders said in emailed comments to Retail Dive that “We do not accept the excuse that this is supply chain induced. While global supply chain issues have been unhelpful, these issues have been occurring for a long time and are deep-seated.”
An initiative that looks promising for the company is the newly implemented online marketplace in which Kroger will sell Bed Bath & Beyond products and BuyBuy Baby banners on the website, as well as in certain stores.
Saunders believes this will help with short-term challenges and introduce the company to a wider range of customers.
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Over the past few years, Canada has seen many well-known retailers experience financial troubles resulting in store closures and bankruptcies. Especially now, with the ongoing global pandemic, the rate of business closures has been accelerated. However, some storefront shutters are not due to financial issues but attributed to changing business models and shifting practices to appeal to customer demands.
Note: This article will be updated as more stores and brands announce filings and closures.
Here is the running list of retail store closures and bankruptcies in 2021 so far.
SEE Eyewear
The quirky and popular, SEE Eyewear, has shut its only Canadian storefront for good. It was located at 153 Cumberland Street in Toronto’s Yorkville neighbourhood. The boutique first opened in November 2017 with plans to grow across Canada. Unfortunately, due to the current volatile state of the retail industry, all expansion plans are cancelled.
Starbucks
Starbucks has now released that it will in fact close up around 300 store locations in Canada by the end of March this year. Although this may come as a shock, Starbucks isn’t going anywhere. In fact, this is actually part of its store transformation strategy.The new strategy includes closing stores to restructure and expand services like new drive thru locations, curbside pick-up only, and delivery.
Versace
Vancouver’s ‘Luxury Zone’ is losing another store sometime this month for good. Versace, which was located on Thurlow Street, will be closing its storefront after 34 years.
Michaels
The well-known craft retailer, Michaels is shuttering locations this year. The storefront at 1022 Alberni Street in Vancouver, which has been there for almost a decade, has fallen victim to the close, as well as its Yonge Street location at 5051 Yonge Street, North York.
Bizou
The Quebec-based accessories brand, Bizou will close around 30% of its retail locations, according to a French language report. The company has 85 stores, in which 24 will be shut down permanently by the end of this month. Bizou originally filed for bankruptcy in the fall of 2020.
Gap Inc.
The signage is now officially off on all three of the Gap Inc.’s storefronts on Toronto’s prestigious Mink Mile. These shops include the Gap storefront at 60 Bloor Street West, the Gap-owned Intermix at 130 Bloor Street West, and the Banana Republic store at 80 Bloor Street West. This is the first time in more than two decades that the Gap has no storefront locations on Bloor Street.
Godiva
Godiva has made the difficult decision to close its shops across North America. This means that 128 locations, 11 which are in Canada, will shutter doors by the end of March this year. This may come as a surprise to some, as about two years ago, the chocolate company opened its first cafe and then announced plans to open 2,000 more across the globe by 2025. In-person shopping is something that the company takes priority in, so since in-person experiences are not available with the pandemic restrictions, it’s made the conclusion to close.
Kiehl’s
Kiehl’s is permanently closing eight of its 24 Canadian stores some time this year. The closures are a result of the company putting a larger focus on its online shop due to new customer behaviours. The Kiehl’s stores that are shuttering are at Toronto Yonge Street, Upper Canada Mall in Newmarket, Masonville Place in London, Quartier Dix 30 in Montreal, Carrefour Laval, West Edmonton Mall, Halifax Shopping Centre, and Coquitlam Centre.
J.Crew
J. Crew has now shut its remaining stores in Canada. The brand first entered the Canadian market back in 2011 and had a handful of store locations across the country. As of September 2020, the location at Yorkdale Shopping Centre was the last full-priced store in Canada, in which that has now permanently closed.
Freywille
The Austrian luxury accessories brand,FreyWille, has closed its only remaining standalone store in North America. The location was in Vancouver at 511 Howe Street, in which it first opened in September 2010. Known for its colourful jewellery and silk scarves, you can still shop the brand on its online store!
National Sports
It was just announced that National Sports is closing all of its 18 Canadian storefronts for good. Canadian Tire Corp. Ltd., which is the parent company of National Sports, says that the closure isn’t because of a decline in revenue but rather due to the fact that the company wants to narrow down product focus and National Sports overlaps with its other priority brands. These brands include Canadian Tire, Sport Chek, Mark’s, Atmosphere, Sports Experts, and Pro Hockey Life.
BECCA
The brand that brought us the infamous pressed highlighter is officially closing its doors. BECCA Cosmetics will be going out of business by September 2021. The company wrote in a caption on Instagram saying, “…At BECCA, an accumulation of challenges, together with the global impact of COVID-19, has sadly been more than our business can withstand…”
OVO Flagship
Drake’s beloved OVO flagship in downtown Toronto is showing major signs that the location is permanently closed. If you take a walk by the storefront, you’ll see nothing but bare walls, cement flooring, no clothing, and no brass owl insight—seriously, it’s completely empty. The location is no longer listed on the website as well.
Club Monaco
The iconic flagship of the Canadian-founded clothing brand, Club Monaco, will be closing its doors this week. The beautiful storefront is located in the Lillian Massey building at 157 Bloor Street West. Club Monaco has occupied the two-floor flagship in Toronto for almost 25 years, and now the spot is up for lease next month.
Funnel Cake Express
Toronto’s funnel cake shop has permanently closed its storefront location. Although, its food trucks, event services, and funnel cake kits are still open and available!
Bed Bath & Beyond
Bed Bath & Beyond closed their only downtown Toronto location this past week. It was located at 382 Yonge Street and first opened back in 2012. The next closest spot is at 1602 The Queensway!
Disney Store
Disney announced in March that it plans to close at least 60 stores in North America sometime this year. The Mississauga Square One location will be closed before March 23 after operating in that same spot since 1993.
Walmart
Walmart has released that it’ll be closing six stores across Canada. Three will close in Ontario, two in Alberta, and one in Newfoundland. The three Ontario locations are Walmart County Fair in Hamilton, Walmart Malton Supercentre in Mississauga, and Walmart at Stanley Park Mall in Kitchener.
Zara Home
Zara Home‘s final Canadian store has officially closed. This last standing retail space was located near Montreal in Quebec. The Zara Home that was found in Toronto’s Yorkdale Shopping Centre already closed last year.
Kit And Ace
Kit and Ace has shut its store at 102 Bloor Street West in Toronto which first opened back in 2015. The brand still operates six storefronts throughout Canada which include two in Vancouver, one in Oakville, one in Calgary, and one in Edmonton.
Hudson’s Bay Outlet
The Hudson’s Bay Outlet store at the Montreal Premium Outlets shuttered its doors this year after opening in 2014. The other Hudson’s Bay Outlet store used to be in Toronto at the Premium Outlets, which is now a Saks OFF 5TH.
Drake General Store
The Drake General Store flagship is now permanently closed after about five years. The shop sold fun trinkets, clothing, and more. Although, you can still shop on the online store!
Disney Store
After announcing that Disney is closing 60 locations across North America back in March, the plans have changed again. Disney is now closing all of its stores in Canada, rather than leaving some open, which was originally planned. Disney’s decision to close its stores in Canada is due to challenges resulting from the pandemic and the change in customer buying behaviour.
Innisfree
Innisfree has now fallen victim to ongoing COVID-19 challenges. The beauty brand is a hugely popular Korean cosmetics and skincare company that offers innovative clay masks, Green Tea Seed Cream, cleansing oils, and so much more. All of the physical stores are now permanently closed, but you can still shop some products at Sephora!
Banana Republic
Banana Republic is officially liquidating its flagship store in downtown Montreal located 777 Ste-Catherine Street West. The breath-taking retail space’s closing date is set for July 24, 2021.
Point Zero
The Point Zero location at 1119 Sainte-Catherine St. W has now closed its doors to the public for good. The clothing brand caters to Canadians and offers collections that can transition from season to season.
Canadian Shoe Outlet
The spot where you could find all of the best deals on footwear is officially closing. Canadian Shoe Outlet has decided to shutter all of its doors across the country. Canadian Shoe Oullet actually first opened its doors in 2019 and operated out of many Payless locations that closed previously. There aren’t set dates for the closures just yet, but you can expect the CSO at Sheridan Mall to close by the end of September.
Sobeys
A popular 24-hour Sobeys in Toronto is closing down soon. The spot is located at 840 Dupont Street, near Ossington, and you can shop there until 5 pm on October 7th before it closes down for good.
Rexall
Rexall has shut its storefront at the Holt Renfrew Centre in downtown Toronto. This is now the fourth location to close in Toronto since June of this year.
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With the huge increase in online buying, both department stores and malls are in a lot of trouble. According to CNN, malls in the United States are failing, and since Canada tends to follow U.S. trends, we will not be spared. We’ve already seen major store closings this year, starting with the bankruptcy of Sears. Rumors abound about which store will close next. “As one big store closes, it can take several smaller stores along with it like a house of cards. Experts predict that a quarter of American malls will close in five years — around 300 out of 1,100,” CNN reported.
The record pace of bankruptcies in the industry this year is becoming more a question as to when the company will file, not if they will. When a so-called anchor store defaults and leaves a mall, other stores follow by breaking their leases.
So, who is next? According to CNBC, retailers such as J. Crew and True Religion Apparel are considered to have a large risk of default within the next 12 months, with J. Crew expecting to close a significant number of stores. Money expert, Clark Howard, is warning the public not to buy gift cards, as they will be worthless if a store or restaurant closes unexpectedly. Gift cards are popular as they are easy to buy and use, but in the current economy, it’s not worth taking the chance.
People love the convenience of malls because of the ability to buy from a variety of stores at the same place, but the current collapse is a bad sign for consumers. As major retail stores are affected, we worry about the future of department stores in general.
What is do you think the future will hold for department stores?
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