Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past 24 hours.
Hudson's Bay at Cornwall Centre in Regina. Image via Google Street View
Hudson’s Bay confirmed on Monday that it will be closing its two-level department store in downtown Regina. It marks the fourth Hudson’s Bay store to close in a Canadian downtown core since 2020.
The downtown Regina Hudson’s Bay store will close next year, marking the end of a 55-year run of the retailer in the city. The Cornwall Centre store was the only Hudson’s Bay store left in southern Saskatchewan (others closed in decades past). The Hudson’s Bay store at Midtown Plaza in downtown Saskatoon will remain open, and will be the only one left in the province.
The retailer provided a statement to Retail Insider for this article. “HBC continually evaluates its real estate portfolio and looks at opportunities to optimize holdings. Through normal course of business, Hudson’s Bay has made the decision not to renew the lease for the Hudson’s Bay store at Cornwall Centre in Regina. With the lease expiring, the Hudson’s Bay store will close to the public in April 2025.”
The Centre Court of Cornwall Centre features the iconic facade of a former Canadian Imperial Bank of Commerce. Photo: popupshops.com Cornwall Centre in Regina. Photo: Cushman & Wakefield
“We thank our customers in Regina for their patronage and hope to continue serving the community. Hudson’s Bay will continue to operate its store in Saskatoon, and will also serve customers through thebay.com. We are committed to treating every associate with respect and fairness through this process, and transfer opportunities will be explored where feasible.”
Hudson’s Bay moved into Cornwall Centre in downtown Regina in the year 2000, taking over the 182,000 square foot lease of a former Eaton’s store that had operated there since the mall’s opening in 1981 (Eaton’s closed in 1999 with the bankruptcy of the company). Prior to opening at Cornwall Centre, Hudson’s Bay operated a standalone store at the corner of Hamilton Street and 12th Avenue that opened in 1970.
Cornwall Centre’s management company Cushman & Wakefield provided a statement for Retail Insider. “We have recently learned that Hudson’s Bay will close its Cornwall Centre location next year. While we recognize the longstanding relationship this iconic brand has held within the shopping centre, as we look to the future of Cornwall Centre and the downtown revitalization plans, we are confident about the opportunities this brings for our customers and the community.”
Lease plan via Cushman & WakefieldThe former standalone Hudson’s Bay store at 12th and Hamilton Street in downtown Regina is now home to multiple tenants. Hudson’s Bay occupied this building from 1970 until 2000. Photo: Google Street View
The Cornwall Centre Hudson’s Bay store’s sales were said to be struggling — in the fall of 2021, the retailer closed its basement level. Sources reached out to Retail Insider over a year ago, speculating on the store’s closure.
Prior to taking the former Eaton’s location at Cornwall Centre, Hudson’s Bay operated a three level standalone store on Hamilton Street that created a commercial vibrancy in the area. The Hudson’s Bay Company also had a presence in Regina in decades past when it owned the Simpsons chain of department stores — Simpsons opened its first Regina store in a warehouse district north of the downtown core in the 1920’s, and in 1946 took over local department store R.H. Williams at Hamilton Street and 11th Avenue where it operated until June of 1981. The Hudson’s Bay Company acquired the upscale Toronto-based Simpsons chain in 1978 and closed the unprofitable Regina location just a few years later.
The 573,000 square foot Cornwall Centre has been a dominant force in downtown Regina since its opening in 1981, and currently features about 80 retailers over two levels. The centre’s other anchor store was Sears Canada, which shut in 2018. Cornwall Centre also was once connected by an over-the-street pedway to an upscale mall called The Galleria which closed in the early 2000s. Interestingly, the Hudson’s Bay Company said in 1981 that its decision to close the unprofitable standalone downtown Regina Simpsons store was partly because of the opening of Cornwall Centre, which had new competitor anchors Eaton’s and Sears.
Regina Mayor Henry Baker and Mr. Ronald A. Sheen, Deputy Managing Director of the Hudson’s Bay Company looking at the model of the new standalone Hudson’s Bay Store at Hamilton Street and 12th Avenue in downtown Regina in 1966. Image: City of Regina ArchivesIn 1946, Simpsons took over the RH Williams department store at 11th Avenue and Hamilton Street in downtown Regina. The Hudson’s Bay Company acquired Simpsons in 1978, and closed the downtown Regina store in 1981 — at the time, HBC partly blamed the development of Cornwall Centre (with anchors Eaton’s and Sears) for its shutting the unprofitable Simpsons location. The building has since been demolished. Rendering via the City of Regina Archives.
Department stores were once the domain of the downtown core, and suburban retail is partly responsible for the near death of retail in many downtowns across North America. At one time, downtowns in communities across the continent boasted department stores of various sizes. Fast forward to today, and few downtown department stores remain, with that number dwindling in Canada as Hudson’s Bay continues to close locations.
Since the spring of 2020, Hudson’s Bay has closed three key downtown department stores in Canada. In November of 2020, the massive 675,000 square foot Hudson’s Bay store in downtown Winnipeg closed, marking the end of an era for the building which once served as the company’s main flagship store. In June of 2021, Hudson’s Bay closed its 168,000 square foot store in downtown Edmonton, which followed the closure of a Holt Renfrew store nearby. In May of 2022, Hudson’s Bay closed one of its two downtown Toronto stores at the corner of Yonge and Bloor Streets, leaving the flagship Bay store at Yonge and Queen that began as the flagship store for Simpsons.
Hudson’s Bay has closed other stores in Canada in recent memory, including at Jardins Dorval in Montreal in the fall of 2021 and a small store on Banff Avenue in Banff, Alberta, in the summer of 2023. Vancouver-based retailer Arc’teryx is said to have leased part of the former Banff Bay building, which is under renovations.
Former Hudson’s Bay Store Building 125 Banff Avenue, Banff (Image: Avison Young)
For months, Retail Insider has been visiting Hudson’s Bay stores across the country, and something appears to be a bit off. Most of the stores visited appeared to have escalators out of order, and there’s a noticeable lack of music being played in many locations. Even some washrooms in some stores are out of order — sources told Retail Insider that the lack of music and washrooms was due to not paying bills, while the cost of electricity and economizing could be responsible for the escalator outages. On Tuesday of this week, Retail Insider visited the Queen Street flagship store in Toronto where many of the escalators were not running, and all four passenger elevators were out of commission that day.
Recent news reports out of Vancouver indicate that the downtown flagship Hudson’s Bay store is in rough shape — escalator and elevator outages means people have to find their way floor-to-floor via large staircases in the store, something witnessed in January by this author during a trip to the city. Last week, The Vancouver Sun reported on the store and interviewed customers who generally gave negative reviews of the in-store experience and lack of maintenance. HBC announced during the pandemic that the store would be redeveloped with an office tower built above, and sources now tell Retail Insider that a new proposal for the building is in the works.
Hudson’s Bay at Queen and Yonge in Toronto (Image: Dustin Fuhs)
The closure of another downtown Hudson’s Bay department store is bad news for Canada, which has only a handful remaining. Hudson’s Bay continues to operate downtown stores in Calgary, Saskatoon, Toronto, Ottawa and Montreal.
The 400,000 square foot downtown Calgary Hudson’s Bay store was downsized to about half of its former retail space during the pandemic, and is now three floors (down from six in years past). The 174,000 square foot downtown Saskatoon store relocated from a standalone building to Midtown Plaza in 2000, similar to what was done at the time in Regina. The 800,000 square foot Toronto Queen Street store continues to operate with an integrated/adjacent Saks Fifth Avenue store which has seen better days, while the 335,000 square foot downtown Ottawa Hudson’s Bay store continues to operate across the street from CF Rideau Centre. In Montreal, the massive 655,000 square foot downtown Hudson’s Bay store was slated for redevelopment, and so far only the store’s retail space has been downsized with some upper levels shut off to the public.
In decades past, Canadian downtowns were home to multiple department stores — that included names such as Eaton’s, Woodward’s, Hudson’s Bay, Simpsons and Morgans. The first four of these were all present in Canadian downtowns until 1991. Sears Canada also operated downtown stores until it began selling off real estate (making Nordstrom’s entry into Canada possible) before Sears Canada’s demise in 2018.
The United States, as well, has seen its city downtown cores decimated over the years, with a few large traditional department stores remaining. And that number will be reduced even more with the recent announcement that Macy’s would look to vacate its large store on Union Square in San Francisco. The only other American downtowns with a meaningful department store presence today include New York City, Chicago, Philadelphia, Washington DC and Boston.
MUST Loyalty Program in Downtown Toronto (Image: Dustin Fuhs)
As consumers are finding loyalty programs less rewarding, overwhelming, and too rigid, Lia Grimberg discusses the death of loyalty programs by sharing insights on loyalty mistakes, ‘set and forget’ failures, and flexible program models.
“In an era marked by rapid technological advancements and evolving consumer expectations, the traditional models of loyalty programs no longer suffice. Consumers are seeking immediate benefits and experiences that resonate more deeply with their personal values and lifestyles. As a result, businesses must pivot towards a more dynamic and response strategy to maintain customer loyalty and engagement,” says Lia Grimberg, Principal and Consultant at Radicle Loyalty .
The decline in traditional loyalty programs
Aeroplan at LCBO (Image: Dustin Fuhs)
In recent years, Grimberg says the landscape of loyalty programs have undergone significant changes. As traditional models are failing to keep up with consumer preferences and expectations – retailers are seeing a decline within loyalty programs as they are becoming less effective.
Lia Grimberg
As consumers today are more demanding and informed, they are seeking instant benefits, personalized experiences, and rewards offering greater value. Traditional programs are failing to meet these expectations and are leading consumers to be disengaged and less satisfied with the brand.
Three programs Grimberg mentions that are facing a decline in effectiveness and have seen a decline in popularity are AIR MILES, SCENE+, and Aeroplan.
“Representatives from traditional loyalty programs like Air Miles have been very upfront, openly admitting the significant challenges they have encountered, including notably declining consumer engagement and decreasing interest from retail partnerships in maintaining these collaborations.”
Making a shift towards flexible programs
My Pandora Rewards Program at CF Toronto Eaton Centre (Image: Dustin Fuhs)
Grimberg says retailers are shifting towards flexible, short-term partnerships which quickly adapt to consumer needs and industry changes. These programs focus on fast reward redemption, personalization, and increased consumer engagement.
“In the past, loyalty programs were all about the set and forget model, where once a consumer was signed up – minimal effort was made to keep consumers active and engaged. However, this approach is no longer viable in today’s market. Consumers are now looking for more from their loyalty experiences, including more frequent and meaningful interactions that demonstrate real value. As a result, we are seeing a significant shift towards more dynamic strategies that require ongoing engagement and adjustment.”
As loyalty programs transition to include more flexible and dynamic strategies, consumers and retailers will see significant changes.
For consumers:
A shift towards flexible loyalty programs and faster reward systems has significantly improved consumer experiences. Grimberg says consumers will enjoy more immediate rewards – ensuring loyalty programs will remain relevant and valuable, preventing disinterest.
“These minable, adaptive approaches allow us to quickly respond to consumer demand and market trends, ensuring that loyalty programs are not only relevant, but also highly engaging. This shift is crucial as it keeps consumers interested and invested in our programs, preventing disinterest and maintaining their relevance over time.”
For retailers:
Grimberg says if retailers implement these strategies of short-term flexible partnerships and focus on meaningful reward benefits, they can attract and retain customers in the competitive loyalty market.
Retailers can also have a better understanding of consumers by targeting audiences better and continuing to adapt to consumer needs. To meet these changes, Grimberg says retailers need to invest more in technology to make these programs effective, but this does not come without an increase in operational costs.
Overall, the impact of an enhanced loyalty program comes with an increase in consumer engagement and loyalty. While retailers will have higher costs for these technological advancements, the long-term benefits outweigh the challenge.
Mistakes on Loyalty
Rewards Program App with no Offers (Image: Dustin Fuhs)
The biggest mistake Grimberg says retailers are making is relying on traditional program strategies like point systems that don’t provide enough value to customers – leading to low consumer engagement: “So what we are seeing – is not good results. Consumers are not earning enough to be able to collect for something valuable within a reasonable period of time.”
To improve loyalty programs, retailers should focus on creating meaningful relationships with customers through personalized interactions, innovative rewards, and new partnerships.
In the future, Grimberg says trends such as short-term partnerships and an increased focus on value for customers are expected to shape loyalty programs. To be successful and to stand out, retailers must avoid repetitive models and make customer engagement its top priority.
Overdue for an update
Shoppers Drug Mart (Image: Dustin Fuhs)
“We go back to the same tricks that we have tried for 40, 50 years. We started with punch cards, then graduated to points – there hasn’t been necessarily a new program. We have not, as an industry, innovated in a very, very long time.”
To remain relevant, Grimberg says retailers need to focus more on innovation in loyalty programs.
“The lack of innovation in loyalty programs is a major issue, with many programs failing to engage consumers effectively. Retailers need to focus on providing ongoing value, engaging customers consistently, and offering meaningful rewards to keep loyalty programs successful. The lack of innovation is leading to negative ROI for retailers and a lack of perceived value for customers. To improve loyalty programs, retailers need to invest in ongoing promotional activities, drive incremental behaviour through promotions, and open up the ecosystem to more partners for earning and redemption opportunities. These changes are affecting both consumers and retailers, with a need for more innovative and engaging loyalty strategies.”
Retailers must focus on personalization and the use of technology. With the use of AI and machine learning – retailers have the available tools to collect data, understand consumer behaviours on a deeper level, personalize offers, and have effective communication strategies.
“From a consumer perspective, they are seeing the same program over and over again and they are overwhelmed and underwhelmed with the offers – they are no longer seeing the need to stay with one retailer over a long period of time just because they are never going to accumulate enough value to be used.”
Resuscitating loyalty programs
Grimberg provides three strategies retailers should take on to improve their loyalty program.
Allocate resources wisely: “Dedicate 20 to 30 per cent of your rewards budget to promotional activities and ongoing engagement. Invest in meaningful interactions and value exchange across all touchpoints of the customer lifecycle.”
Make redemption meaningful: “Ensure customers can earn and redeem rewards within a reasonable timeframe, typically a few months. Open your ecosystem to partners to enhance earning and burning opportunities.”
Embrace card-linked offers: “Instead of coalitions, consider short-term card-linked offer partnerships, such as Drop, Neo, or AIR MILES, that offer access to new audiences on your terms. The flexible arrangements allow for targeted promotions and can be adjusted to align with your promotional calendar, while still addressing your customer acquisition goals.”
Starbucks Rewards Program In-Store Signage (Image: Dustin Fuhs)
The future of loyalty programs is in need of innovation. Grimberg says technology will play a key role in shaping new innovations, making it easier to personalize communication strategies and rewards.
To improve loyalty programs, Grimberg suggests retailers consider member-only pricing, rewards for non-transactional behaviours, and partnerships with other businesses to provide a variety of earnings and redemption options. Additionally, using technology to personalize experiences can help improve engagement and brand loyalty.
Ultimately, Grimberg says the key to success is continually evolving and providing value to the customers: “It is not about the system being broken, but how we can continuously engage and provide more meaningful value to our customers through loyalty programs.”
Ladurée Canada at CF Toronto Eaton Centre (Image: Dustin Fuhs)
Caddle, in partnership with Retail Council of Canada (RCC), recently released a survey of Canadians and their shopping intentions for this year’s Mother’s Day.
“In 2024, the trend to celebrate Mother’s Day in Canada is waning slightly, with only 60 per cent planning to observe the holiday, down from 72 per cent the previous year,” said the report.
“Uncertainty about celebrating has increased slightly to eight per cent from six per cent. While 66.5 per cent intend to buy gifts, down marginally from 67.1 per cent, those celebrating are largely looking to match or exceed their previous spending.
“Influence on purchases comes chiefly from family and friends (32.5 per cent) and in-store browsing (23.7 per cent). Other significant factors include in-store displays, flyers, social media, and retailer websites. Dedicated shopping trips for Mother’s Day are up to 60 per cent, and shoppers are clearly looking for value in gift-giving.
“In 2024, almost 90 per cent of Mother’s Day celebrating Canadians aim to increase or maintain their spending compared to last year.”
Mothers Day at Indigo (Image: Dustin Fuhs)Ladurée Canada at CF Toronto Eaton Centre (Image: Dustin Fuhs)
For many retailers, Mother’s Day is one of those special occasions that can boost business sales.
Olesya Krakhmalyova, company owner of Ladurée Canada, said Mother’s Day is very important for the retailer, which specializes in French pastries and macarons.
Olesya Krakhmalyova
“I would say for us Christmas and Valentine’s and Mother’s Day are the top three sales periods over the year. The peak moments,” she said. “ Ladurée is famous for its beautiful gift packaging for macarons and for Mother’s Day specifically we do limited selections to highlight the holiday.”
The company’s exclusive Mother’s Day treats include the Mother’s Day macaron box available from April 26 and the La Vie En Rose cake, available on May 1.
Ladurée Canada at Exchange Tower (Image: Dustin Fuhs)
Ladurée is a world-renowned luxury French pâtisserie with a rich history dating back to 1862. In 2016, Ladurée entered the Canadian market with its first location in Vancouver. It has since opened two locations in Toronto at Yorkdale and Exchange Tower. It also has carriage popups at CF Eaton’s Centre, CF Pacific Centre and Vancouver International Airport. In 2023 it opened its Toronto pastry laboratory, its second Canadian pastry making facility.
Krakhmalyova said consumers are concerned with rising prices. She said retailers often don’t have a choice these days in pricing because prices are impacted by the supply chain.
“We’re getting the sentiment that people have been taken aback by this non-stop price increase. But we are a business. And we are also taken aback and concerned with such rapidly increasing costs of doing business. It’s a huge concern,” she said.
Image: ladureecanada.caMother’s Day at Bath and Body Works (Image: Dustin Fuhs)
Unfortunately for many retailers the increasing costs for a business are not compensated by sales right now.
That’s why many retailers look at special days like Mother’s Day to help boost their sales.
Here are the key findings from the RCC Mother’s Day survey:
60 per cent of Canadians plan to celebrate Mother’s Day in 2024, compared to 72 per cent in 2023;
Eight per cent of Canadians in 2024 are not sure whether or not they will celebrate Mother’s Day. In 2023 only six per cent of Canadians were not sure if they would celebrate;
This year, 89.7 per cent of Canadians who celebrate Mother’s Day, plan to spend the same or more as compared to last year;
74.3 per cent of Canadians expect to spend the same amount of money on celebrating Mother’s Day as they did last year;
15.4 per cent of Canadians expect to spend more money on celebrating Mother’s Day than they did last year, while the same number was 14.1 per cent in 2023;
.This year, 66.5 per cent of Canadians plan to make purchases related to Mother’s Day, in 2023 this number was 67.1 per cent;
The largest group (17.1 per cent) makes purchases about one week before the holiday;
52 per cent of Canadians will plan at least a week before Mother’s Day to make purchases;
The number of people planning to make same day purchases on Mother’s Day has declined by 1.2 percentage points compared to 2023 with 4.7 per cent;
56.2 per cent of Canadians who celebrate Mother’s Day, spend more than $50;
43.8 per cent of Canadians spend $50 or less on Mother’s Day;
This is followed by 33 per cent of Canadians spending between $51-$100, and 12.6 per cent spending between $101-$150 on Mother’s Day;
The number of people spending less than $50 has declined by 6.1 percentage points compared to 49.9 per cent in 2023;
Mothers Day at Lindt (Image: Dustin Fuhs)Mother’s Day Sale at Novesa (Image: Dustin Fuhs)
More than 70 per cent of Canadians shop in-person at retail stores for Mother’s Day products;
Around 11 per cent of Canadians go to a retail store’s website;
Around 10 per cent buy through online sellers;
7.3 per cent of Canadians purchase something for Mother’s Day using other means;
60 per cent of Canadians make dedicated trips for Mother’s Day products;
In 2023, 44 per cent of Canadians tacked on Mother’s Day items to an existing shopping trip;
60 per cent of Canadians make a dedicated trip for Mother’s Day shopping. The corresponding figure last year was 56 per cent;
Around one-third of Canadians look for value to show their care while giving Mother’s Day gifts;
40.5 per cent of Canadians don’t consider it important to buy known brands for Mother’s Day celebrations; and
28.1 per cent of Canadians look for the best value purchase for Mother’s Day.
Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past several days.
Ted Baker at CF Toronto Eaton Centre (Image: Dustin Fuhs)
Fashion brand Ted Baker‘s Canadian division recently obtained protection under the Companies’ Creditors Arrangement Act in Canada and Alvarez & Marsal has been named the monitor.
Court documents indicate that Ted Baker Canada operates 25 retail store locations under the Ted Baker (9), Lucky Brand (7) and Brooks Brothers (9) store banners, with approximately 280 employees. Ted Baker Canada also sells to customers through six retail concession locations in certain Hudson Bay Company stores in Canada.
Bruce Winder, Retail Analyst and Author, said the entrance of the Canadian division of Ted Baker into CCAA represents the current retail climate reckoning across the world.
Bruce Winder
“Once the U.K. division suspended, suppliers became alarmed and changed payment terms. In addition, the recent acquisition of Lucky Brand and Brooks Brothers strained the business as it implemented a new IT system,” he said.
“With retail softening, the combined entity may have had a hard time paying loans as cash flow could not sustain the business. Sadly, it feels a little like The Body Shop’s story in some ways.”
Ted Baker at Sherway Gardens (Image: Ted’s Store Portfolio)Ted Baker in North End of Level 3 at CF Rideau Centre (Photo: Dustin Fuhs)
Doug Stephens
Doug Stephens, Founder, Retail Prophet, said Ted Baker is yet another example of a brand that found itself middled in a market increasingly dominated by deep, deep discount players at one end and uber-luxury at the other.
“Being a “near-luxury” brand in a market defined by polarized value is a precarious place to be. One also has to wonder if work-from-home and an aging customer set haven’t also played into the brand’s ill fortunes,” he said.
George Minakakis, who leads advisory firm Inception Retail Group, said “show me a brand that can successfully tell and sell its brand story, creating trends instead of chasing them, and I will show you a brand that can survive the test of time.”
George Minakakis
“When brands go through creditor protection, the pattern is the same: neglect and overconfidence. Ted Baker is a mid-tier designer brand, and in this world of greater frugality and focus on affordability, it does not come as a surprise that mid-tier brands are struggling,” he said.
“Making a brand relevant and keeping it that way isn’t as simple as attractively displaying the right merchandise or throwing entertainment at it. A brand needs to have a meaningful purpose that resonates with consumers’ lifestyles and values. When Eaton’s and Sears failed, they were no longer department stores of aspirations. They became depots with clothing and cosmetics, and consumers lost their brand connection.
Liza Amlani, Principal and Co-Founder, Retail Strategy Group, said it seems the root cause of the demise of Ted Baker is ABG failing to make payments to suppliers.
Liza Amlani
“But that can’t be the full story. ABG has a lot of brands under its portfolio so why the delinquency of payments to Ted Baker’s vendors? If vendors aren’t paid and are holding shipments, their own stores would be empty and wholesale accounts would be furious. Something doesn’t add up.”The WSJ quoted: A decline in sales and a technology transition that occurred in the midst of the company’s busiest selling season were also to blame, according to the court filing by Adams and a filing by Alvarez & Marsal, the monitor appointed to oversee the Canadian insolvency. Why risk reputation and retail partner relationships just to close Ted Baker’s doors?
“Last year, Ted Baker expanded their North America merchandising team and leveled up staff to scale the US/Canada business. Hiring merchants would improve product assortments and increase revenues and relevance in the market. In fact, just eight months ago, the NYC team was looking for buyers and planners to join the team.
“If an unsuccessful technology transition was to blame, why didn’t ABG work with OSL, who has a Canadian investment in the brand, to work on these issues? OSL is a technology solution provider. Again, something just doesn’t add up.”
Brooks Brothers at 157 Bloor St W (Image: Dustin Fuhs)
Michael Kehoe, Broker of Record with Fairfield Commercial Real Estate, said the CCAA Protection filing by Ted Baker is representative of the current turmoil in some sectors of the Canadian retail industry.
Michael Kehoe
“Their segment of the apparel category is very competitive on price with several dominant retailers gobbling up market share on the lower end of the category spectrum. I am hopeful that the breathing room provided by the CCAA protection process will give the firm time to save most of the 25 Canadian Ted Baker, Lucky Brand, and Brooks Brothers locations along with 280 jobs that will be affected,” he said.
“The firm shares the struggles of many fashion retailers these days such as supply chain issues, high shopping centre rents and frequent onerous supplier payment terms. The insolvency conversation in the retail industry is an ever frequent one these days as brands come and go in these challenging times.”
“I don’t know if Ted Baker can survive even if it comes out of creditor protection; few of them survive the next phase of recovery. But suppose they want to stay in the game. In that case, they need to tell and sell their brand story as a fashion experience must be part of their recovery—and not another retailer managing financials calling that a recovery plan.”
Since first entering the North American retail fashion clothing industry through an acquisition completed in early 2023, court documents said the brand has struggled and the consolidated business has failed to achieve positive cash flow.
“Over the last year, the business has underperformed relative to budget and revenues have significantly declined, due in management’s view to, among other factors: (i) supply chain disruption and accelerating payment terms following failures by ABG’s (Authentic Brands Group) operating partners in Europe and elsewhere to make payments to suppliers in the lead up to and as a result of the administration process in the UK in respect of that Ted Baker business; (ii) transition to a new technology platform during the busiest selling season, which exacerbated the supply delays; and (iii) generally poor sales performance.
Negative cash flows and working capital issues have caused a strain on the borrowing base, added the court documents.
“These liquidity constraints have resulted in significant arrears owing to critical vendors, including in excess of $2 million owing to ABG as of April 1, 2024 . . . On April 17, 2024, Ted Baker Limited and Ted Baker Canada received Notices of Breach from ABG as a result of the Missed April Payments. Under the terms of the License Agreements, ABG has the right to terminate the License Agreements if the Applicants’ failure to make payments under the License Agreements is not cured within five business days.
“The principal purpose of these CCAA Proceedings is to stabilize and maintain the Ted Baker Group’s business, which urgently requires a stay of proceedings granted under the CCAA and related relief, including access to interim financing required by the Applicants. The Applicants intend to use the breathing room afforded by the CCAA to consider their next steps and restructuring alternatives in consultation with key stakeholders.”
Real Canadian Superstore in Surrey (Image: Turner Fleischer Architects)
The alleged anti-Loblaw boycott, primarily called for on social media platforms such as Reddit, where anonymity prevails, reportedly began on May 1. Despite these claims, there has been no discernible change in customer traffic at Loblaw-owned stores—at least not thus far.
Interestingly, the market seems to be largely indifferent to this boycott; Loblaw shares have climbed by nearly $7, reaching an all-time high of almost $154, 3 days after the start of the boycott. This increase in share value has augmented Galen Weston’s wealth by $540 million. Contrary to the boycotters’ intentions to financially impact the Weston family and Loblaw negatively, the opposite seems to be unfolding.
Since the movement did not extend to other chains for the first month—where in some instances, prices have risen more sharply than at Loblaw’s—and since there has been no clear evidence of profiteering by Loblaw, the boycott is likely to fail. From its inception, it lacked logical and practical foundation. Fortunately, Canadians are proving to be more discerning.
Loblaw Companies Limited Head Office (Image: Sweeny &Co. Architects Inc.)
Despite this, last week Galen Weston stated that Loblaw was being unfairly accused of profiteering. He was partially correct. While there are no verified, audited reports to substantiate claims of profiteering by Loblaw, it would be incorrect to absolve the company of all blame. Indeed, Loblaw, alongside Walmart, plays a significant role in the challenges facing food manufacturing and independent grocers. Not only is food manufacturing undercapitalized, but independent grocers are also suffering under the dominance of a few large corporations that control over 80% of Canada’s food retail market.
The reality that Canadians are spending less at grocery stores is impacting manufacturing and independent grocers more than major retailers like Loblaw. To protect their margins, Loblaw and Walmart are likely to implement new fees and pressure suppliers to lower prices. Typically, manufacturers respond by attempting to increase prices to compensate for these higher costs imposed by grocers. This ongoing struggle has persisted for years.
A lesser-known fact is that suppliers pay grocers for the privilege of doing business with them, which grants significant power to these retailers within the supply chain. While it might seem beneficial for consumers when grocers force price reductions on suppliers, this can lead to tighter margins for manufacturers, potentially forcing them to shut down.
To safeguard both manufacturing and independent grocers, a code of conduct is essential. This code should be adhered to by all grocers, including giants like Loblaw and Walmart, and would be coordinated by the government and led by the industry to mediate disputes within the supply chain. Currently, manufacturers have little choice but to comply with Loblaw’s terms or cease operations. Many have silently closed their doors because they lacked the ability to protest.
These closures lead to reduced consumer choice and, consequently, less competition. This is the real issue the boycott should have highlighted, rather than adopting a populist stance fueled by collective animosity toward a single company and individual—a truly futile and misguided effort.
Galen Weston (Image: SPENCER COLBY/THE CANADIAN PRESS)
Galen Weston’s public grievances have become a recurring theme. We have observed him misleading parliamentarians last year about how the proposed code of conduct would affect prices, for which he later apologized. Nearly a decade ago, he also criticized farmers’ markets by suggesting that the food sold there could pose greater safety risks, a claim he eventually retracted.
While the boycott may be an ineffectual and juvenile attempt to challenge a “Goliath” like Galen Weston, he is incorrect in claiming that Loblaw is being unfairly targeted. The company should indeed be scrutinized, but for legitimate reasons.
Strengthening our grocery industry and making it more competitive will require a broader understanding of supply chain economics among Canadians, extending beyond the storefront. Neither Loblaw nor Walmart are directly exploiting consumers; instead, they are exploiting suppliers, which introduces more price volatility into the market and ultimately harms consumers.
Boycotts are not the solution; instead, we need to rally support for more price stability through a code of conduct for the food industry. Over time, this would help both food manufacturing and independent grocers thrive, making the industry more transparent and Canada a more attractive place for investment once more.
The key to transitioning to a more competitive food distribution landscape is to ensure that both Loblaw and Walmart comply with this new code. Thus, Mr. Weston, rather than lamenting the situation, should take concrete actions to address the real issues affecting Canadians.
Anatomy of a Leader: Samir Kulkarni, CEO of Showcase
As a child, Samir Kulkarni was always surrounded by business with his family.
It seemed only natural that the current CEO of retailer Showcase would end up running a business one day.
Kulkarni was born in Brampton, Ontario. He received a Bachelor’s Degree in Philosophy/French at York University then an MBA in Strategy/Finance at Yale University.
“I grew up in a business family. I was mentored by my father and my uncle almost from when I was born and actually used to go with my father to business meetings from age eight onwards. Every weekend and every holiday I would spend time with him and my uncle at the office and so my career ambition was to always join the family business which is a group of different businesses and help the family in some way. That was always the ambition,” he said.
“During my undergrad, I actually was running one of the businesses full-time and really didn’t have much of an undergrad experience as a student because I was really working non-stop and then went to Yale and did my graduate school and became a true student there.”
Samir with family 1983 – Samir (center front) at 7 years old, with mother Bakula (left), Kiran (right), and sister Sonal (center back). Samir was immersed in the family business from the beginning, learning under his father in business meetings from age 8 onwards, while Samir’s mother mentored him in languages and arts. Samir’s sister Sonal studied the law and today is Showcase’s corporate counsel.Samir Appleby 1984 + Kids 2023 – Samir (left) attended prestigious boarding school Appleby College in Oakville ON during 1984-1993. Coming full circle, his kids Arjun (center) and Karishma (right) were accepted into and enrolled at Appleby in 2023
Kulkarni said the family is involved in many different sectors including manufacturing, financial and tech.
“We’re a pretty diversified conglomerate but the business I’m involved with, Showcase, was actually not part of the group as I was growing up. It only came available for investment as I was finishing up school. So as we were acquiring that business that’s when I got involved. That’s where my focus has been with the group.”
Showcase was founded in 1994. The Kulkarni family invested with the original founder in 1999 as Samir was finishing business school. He came back to Canada and has been driving the business forward since then.
“It was a very contrarian decision at the time because all of my classmates were going off into management consulting and the dot com boom was started then in the late 90s or going into investment banking,” said Kulkarni.
“My training is in finance and investment management and so on. Retail was definitely an unconventional move but what has been really interesting is to look at what used to be an old world business of retail and how really the old world and the new world have come together with technology, with social media, with pop culture. We’ve infused a lot of new world technology into what we do and so it’s really become a new world business in that way and the old world and the new world have sort of come together to create a really interesting business model.
“A few people were probably scratching their heads back in the early days, now it all makes sense and it’s come together and has become a really interesting modern business.”
Samir Breakfast Television 2013 – One of Samir’s early television appearances, introducing Showcase’s products on Breakfast Television with Dina Pugliese in December 2013.
Samir with Showcase leadership team 2015 – Hosting the ribbon-cutting of Showcase’s new head office. Leadership team Greg Synowicki (left), Samir (center left), founder of Showcase Amin Jivraj (center right), and Rob Watt.
When the family looked at Showcase, it was a very unique business model. Not a typical retailer. It is able to identify trends and commercialize those trends immediately.
“Think of us as a real-time trend store of whatever is hot on maybe television, on radio and these days on social media,” explained Kulkarni. “So that was what was intriguing. We are selling the products that everyone wants that no one can find and they want a storefront to be able to go to buy them.
“That’s what makes us different than retailers selling commodities.”
Chrystia Freeland Meeting Oct 2022 – as a member of the Board of Directors of Retail Council of Canada, Samir travelled to Parliament Hill to meet with Deputy Prime Minister Chrystia Freeland, Minister of Innovation Francois-Phillipe Champagne, and Deputy Minister of Finance Michael Sabia.
Kulkarni said data is his passion. He looks at different data sets every day with the Showcase team.
“There are simple sources of data. For example, going on TikTok and watching TikTok for an hour. I do that probably more than I should but I spend a lot of time on social media as a daily routine. But it’s also looking at other data sets and seeing what people are searching for, what people are tweeting about. I love to go through reams and reams of data and try to help find that next big thing.
“Data is a big part of what I do. In the old days, I used to travel a lot more. I used to travel to China, meeting with vendors, traveled to trade shows. I don’t do that as much now. It’s become much more of a data driven business. So I spend a lot of my time in front of a computer.”
Samir + Divya – TIFF 2023 – Samir and his wife Divya Kulkarni walk the red carpet at TIFF 2023, being long-time supporters of the festival.
Outside of work, Kulkarni is passionate about playing billiards. In his younger years, he was a competitive player. He didn’t turn pro as he got into the retail sector.
“But it’s certainly a passion of mine and it’s something I spend a few minutes every day playing and it’s a game I feel I understand. I’m also a big squash player. I’ve been playing for 40 years. I make time for squash every week,” he said.
“I started playing pool in high school. I remember through university I was playing 20 hours a week of pool. It was a very serious endeavour. What I like about it is that it is mathematic and controllable and it’s about geometry and logic and I love those topics. That’s probably why I play squash as well. It’s a square box where the ball is going to bounce in a predictable way and that’s why I gravitated to those sorts of controlled fun as opposed to golf which I’ve also tried which is not controllable at all.”
Kulkarni described his leadership style as being all about speed and entrepreneurship, spotting the opportunity in things and pivoting very quickly based on new information.
“We have set up our corporate culture in that way where we try to remove bureaucracy, red tape, layers of approval and things like that. And we try to make decisions very, very quickly. So people have information at their fingertips, they’re encouraged to try things, to experiment. Failure is not a problem. Failure is just a delayed success. We encourage people to roll the dice, try things so that we can learn quickly and so in terms of my leadership I try to encourage those parts of our cultures because that’s really what makes Showcase work.”
Image: Showcase
His passion today which he tries to spend half his time on is Artificial Intelligence.
“I’ve been working on AI in a very big way for the last year and a half. It’s a huge part of where I see opportunity in the retail sector and beyond,” explained Kulkarni.
“Really what changed at the end of 2022 when ChatGPT came out is that it was the era of large language models which has now really taken the world by storm because it can essentially read, it can write, it can analyze, it can generate new thoughts, new words, new images, new videos. It’s a completely new era of technology.
“We have been experimenting with AI and we’ve started to inject AI into a lot of trend technology. So one simple example of that is that we watch social media at scale. On any given day, using AI, we are watching 50,000 social media videos a day. And of course that’s more than any human can watch and we’re training that AI to watch it and to understand it and to categorize videos, help us identify new trends, help us identify how new trends are evolving. This is the type of thing that two or three years ago would have been impossible.
“We’re also using AI to develop product ideas, to generate new products, new designs, whether it’s logos, whether it’s art. AI is very, very helpful on that front as well. Of course, AI isn’t perfect and it makes all kinds of mistakes and so it’s something that needs to be developed and trained but we do see it as the future and it really is a way that retailers can get an edge over the competition by being able to adopt these new technologies and deploy them very quickly whether it’s in product development, whether it’s marketing or whether it’s in data analysis. We see a big potential there.”
London Drugs stores remain temporarily closed due to a cybersecurity issue.
“On April 28, 2024, London Drugs discovered that it was the victim of a cybersecurity incident. Out of an abundance of caution, all London Drugs stores will remain temporarily closed across Western Canada until further notice while continuing to provide customers with urgent pharmacy care,” said the company.
“London Drugs is currently working with leading third-party cybersecurity experts to bring our operations back online in a safe and secure manner. Our investigation is currently assessing the extent to which any data has been compromised in the incident. In the event our investigation determines that personal information was impacted, we will notify affected individuals in accordance with privacy laws.”
“Recognizing the impact these closures have had on our customers and employees across Western Canada, it remains our priority to continue working around the clock to have all stores fully operational,” said Clint Mahlman, COO and President, London Drugs, in a statement. “We appreciate everyone’s patience and support during this very difficult time and will provide updates as available.”
London Drugs said its phone lines have been temporarily taken down and will be restored as soon as possible. In the interim, pharmacy staff are on-site at all London Drugs locations to support customers with urgent pharmacy needs. The company is advising customers to visit their local store in-person during regular business hours for immediate support and until the phone lines are back in service.
Bruce Winder, Retail Analyst and Author, said London Drugs joins the club of Canadian retailers who have fallen victim to a cybersecurity issue.
Bruce Winder
“The disruption to operations, significant customer friction and impact to cash flow can destroy a retailer or at least severely impact them in the short and even long term. One just needs to use Chapters/indigo as a recent example,” he said.
“Retailers need to band together through the Retail Council to help fight this clear and present danger immediately. The problem is the issue remains a moving target as cyber criminals evolve to evade current countermeasures.”
Image: Londondrugs.com
David Ian Gray, Founder/Strategist with DIG360 Consulting, said in the second half of 2023, while the industry focused on the rise in store theft, he had been hearing of unpublicized cyber incidents in various sectors.
David Ian Gray
“Following conversations with experts at Thales and ISA Cybersecurity, I came to the conclusion that cyber threat was the most urgent and important issue facing retail leadership. And I’m not talking about CIOs and technology investment. I mean, at the foundational heart of the transforming retail model,” he said
“I think in 2024 most chain retailers are well versed In terms of security software and protocols and how to respond to an incident. I am not a cyber expert. However, my concern is twofold. First, each time I’ve raised it with a CEO or COO, they have directed me to the Chief Technology Officer. My gut says this is a problem. It places far too big a burden on one exec and it suggests the issue is solely about technology and compliance. Who is responsible for the hard, important discussions around how much risk the business should tolerate? How does a more and more complex, digitized business move nimbly to the future and adapt with that risk factored in? How do leaders ensure people inside feel secure and are ready to respond when – not if – an attack occurs? These are questions whose answers are forming and not set.
“But that leads to my second concern: leaders seem terrified to talk about and share experiences around this topic. There is no shame at all in being attacked. These are sophisticated criminals relentlessly testing the gates of all businesses. Retail is especially ripe because of the myriad digital touchpoints from consumer engagement, to the plethora of suppliers and a large, dispersed workforce. Supply chains are becoming more complicated as is the communications with customers. The fear of appearing vulnerable to competitors in sharing should be replaced by the fear of not rallying together. The pandemic showed the power of collective action. This is most important, in my opinion, in the case of ransom attacks.
“The good news? I have seen no evidence that there is significant consumer abandonment of brands who were attacked. Especially those who have a track record of ‘doing the right thing’ and not cutting corners. I think most of us rally around them.We are seeing that big time in the case of London Drugs. We know this is a criminal act. So do vendors and staff.”
Doug Stephens, Founder, Retail Prophet, said we’ve reached a very concerning nexus in retail whereby two things are happening simultaneously.
“First, retail companies are engaging in a data gold rush, looking to compile as much data about their customers as possible, even streamlining this data into a common stream to avoid silos. However, at the same time, the level of sophistication on the part of hackers and cyber-extortionists is rapidly increasing, thus putting more data at greater risk. While new enhancements to cyber-security measures via AI are promising in terms of countering these threats, AI may also create new sorts of online security threats we haven’t yet considered or built tools to defend against,” he said.
George Minakakis, who leads advisory firm Inception Retail Group, said data is quickly becoming a corporate asset that must be protected.
George Minakakis
“Data will become an industry that is likely bigger than telecoms and banks. In the digital age, the evolving landscape of cyber threats continually outpaces defences, relentlessly exposing organizations to new vulnerabilities. As board chair of a for-profit organization, we review cyber security regularly. The key is twofold education and prevention practices and third-party audits, internally and externally, adopting advanced security technologies. All businesses need to be as smart or smarter than the criminals who are using sophisticated AI to break in. And if you keep passing your audits, find someone to take you through an even tougher one,” he said.
“Corporations must demonstrate a fiduciary duty of care and actively guard customer information. If they don’t, the risk to their brand and business equals the impact of bad products and services and ultimately being outdated. This doesn’t just apply to London Drugs; every organization collecting customer data faces the same challenge as it navigates cyber terrain. Vigilance and adaptability become paramount allies.”
Image: Londondrugs.comLondon Drugs Airdrie, AB (Image: London Drugs)
Michael Kehoe, Broker of Record for Fairfield Commercial Real Estate, said the current cyber-security situation at London Drugs that is inconveniencing customers will impact the firm’s reputation and credibility with consumers in the short term.
Michael Kehoe
“This will be especially pronounced with pharmacy customers. These patrons have expectations of a retail brand for certainty of performance including protection of data and privacy. Depending on severity of data leaks, how the situation is handled by the firm and how long it drags out will determine the severity of the situation,” he said.
“Retail brands with many employees and multiple locations are especially at risk as cyber criminals are always developing new techniques to take advantage. The advancement of AI is making cyber-security more difficult especially for firms with a lack of redundancy as a safeguard.
“London Drugs is a strong brand in Western Canada, and I am sure that pharmacy customers will be prioritized for their prescription needs.There will be hard lessons learned for senior management and provisions put in place to try to stay one step ahead of the hackers.”
Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past 24 hours.
