Advertisement
Advertisement
Home Blog Page 892

Broad Economic Impact As Foodservice Businesses Shutter in Canada

By
Mario Toneguzzi
-
Downtown Toronto city Skyline at twilight in Ontario, Canada

Recently, the Canadian Federation of Independent Business reported that one in seven small businesses in Canada are at risk of going under as a result of the COVID-19 pandemic in addition to the ones that have already closed.

REPORTS FROM CFIB SHOW 1 IN 7 SMALL BUSINESSES AT RISK DUE TO COVID-19

The national organization’s mid-range estimate for small business closures is 158,000.

The restaurant and bar industry, of course, which has already been hit hard, will continue to face steep challenges during this economic crisis that appears to have no end date.

And the ripple effect will have grave consequences for the overall economy.

Larry Isaacs, President of The Firkin Group of Pubs based in Markham, Ontario, with 30 locations including eating establishments, said there could be up to 50 percent of restaurant closures in Canada because of the pandemic.

“You have to remember there is a splinter or fracture that goes out into the marketplace with those restaurants closing down,” said Isaacs. “Aside from the obvious. You’ve got the governments that aren’t going to receive taxes. You’ve got the banks that aren’t going to get their loans paid. Now you’ve got distributors that are waiting for their money. They’re not going to get paid. Therefore, there’s no money coming through the manufacturing sector — impacting the farmers.

“Those are the basic ones. Forget about the plumber, the electrician, the audio visual, the handyman, the music guy. And I could go on and name you a thousand splinters of who are going to get impacted. All of these people and their families. And them paying taxes to the government. So it’s not just a matter of the restaurant shutting down. The economic impact is way more widespread. And you’ve seen it in the retail industry. All these people that are working, they contribute to society by paying taxes. If you take all these taxes off the table where’s the government going to get money to maintain the medical system in Canada. Where are they going to get money to fix the roads and the transport? Where’s the money coming from?”

Isaacs said his establishments closed down the day before St. Patrick’s Day, the biggest revenue generating day of the year for them, and the impact of COVID on the business overall has been “devastating”.

“A restaurant generally works on 30 day payables meaning that September’s revenue will pay August’s bills. We were shut down on the 16th of March and we had to close completely. The Firkin Group is not designed for takeout or delivery. That’s not our operation. Our operation is specifically sit down, watch the sports, have some beers. We were 100 percent closed down except one of our locations tried to do takeout for a little while,” said Isaacs.

“So we had zero income leaving all of our suppliers with no payment. In reopening the business — it’s almost like starting a new business — we’ve got suppliers we have to take care of, we’ve got all this new PPE with masks and hand sanitizers, you have to rebuild your store. And there’s a massive cost to do that. On top of that all we’ve had from (mid) June is patios only (open) and you have to take into account 50 percent distancing. You have to take into account the rain, the wind, the cold nights, the extreme heat. So you have to minus that. And only now in the last couple of weeks have we been able to open the inside at 50 percent.

“At the same time, 50 percent occupancy on the inside of your store. It isn’t really 50 percent because some of the stores are designed that in essence when you lay the tables six feet apart you don’t actually get half of your people. Some of the stores will get only 20 percent, 30 percent, actual occupancy seats where people can sit down. So our biggest concern is we’ve got stuck with no revenue coming in. We had a lot of bills.”

According to Restaurants Canada, restaurants and other foodservice businesses are the fourth-largest source of private sector jobs and number one source of first jobs for Canadians, typically employing 1.2 million people.

RESTAURANTS PLAY A CRITICAL ROLE IN CANADIAN AGRI-FOOD SECTOR

Restaurants support a wide variety of supply chain businesses, indirectly supporting more than 290,000 jobs. Restaurants typically spend more than $30 billion per year on food and beverage purchases, playing a critical role for Canadian farmers and the agri-food sector.

Isaacs said there are three levels of closures facing the restaurant industry. The first has already occurred now since March until today.

“The second piece is going to occur once all the patios close and we move into the fall and into the wintertime. That will be the second closures when people are seeing no patios and you’ve only got half of your restaurant available. They’re not going to be in that revenue,” he said.

“And your third piece is going to come in March and April when you’ve gone through the worst three months of the year — December, January, and February – with no Christmas parties and very little people going out of their homes, you’re going to get the next hit again in March and April.

“So there’s a very good potential that there could be as high as 50 percent (closures) certainly from the independent side. It’s going to be significant unless the government steps in heavily with the rent, payroll relief, tax relief. There has to be a number of helping hands to carry the industry through until May or until the end of the distancing or until there’s a vaccine.”

Foodservice Chain ‘barBurrito’ Seeks Out Bankrupt and Liquidating Businesses for Rapid Expansion

By
Mario Toneguzzi
-
BARBURRITO LOCATION AT BRAMALEA CITY CENTRE IN BRAMPTON, ONTARIO. PHOTO: BARBURRITO

Food service establishment barBurrito is in expansion mode with the chain exploring markets across Canada and it is open to buying out bankruptcy sales or liquidator opportunities.

The company, which first opened in 2005 in Toronto, currently has 113 locations including a recent opening in the United States in Canton, Michigan. The Canadian locations are spread out from coast to coast from the Maritimes to Nanaimo, B.C.

12 BARBURRITO STORES ARE UNDER CONSTRUCTION POST COVID-19 PANDEMIC

Shawn Saraga, Vice President of Business Development for barBurrito, said the company currently has 12 more stores under construction across the country. There are also 30 more franchisees looking for spaces in Canada.

He said the company believes it can grow to 400 locations over the next seven to 10 years. And barBurrito sees the US as probably a 3,000 store market.

“We’re a Mexican themed restaurant. We are actually licensed to sell beer as well and do sell beer in the majority of our locations. The majority of our locations are on grocery store anchors or Walmart shopping centres, power centre plazas. We’re typically between 1,000 and 1,300 square feet with a small patio,” said Saraga.

“We like high visibility, high street traffic locations. The total investment across Canada ranges from $300,000 to $340,000 for a franchisee of which they need around $100,000 to $125,000 in cash. Our sales on the low end are $400,000 to the high end of $1.6 million.

“We make the best burritos in town. And I’ll tell you the design of the way we make the burritos makes all the difference because our burritos don’t fall apart. You can actually have one of our burritos in your car while you’re driving without making a mess of yourself. And the same with our quesadillas. They’re actually built to hold their own. We have a special rolling technique that rolls it so tight that nothing is going to fall apart when you eat one of our burritos.”

Saraga said the company has aggressive expansion plans in place and it is looking to grow quickly.

“I think we really proved ourselves to the industry and to our franchisees during COVID in the way that we stepped up. When COVID hit, it hit our company the same it hit the rest of the world. Fast and furious,” he said. “Overnight we saw a 70 percent decrease in sales and our President and Founder Alex Shtein did five things that I think made a huge difference in our ability to succeed.

BARBURRITO WAIVED 100% OF FRANCHISEE ROYALTIES IN WAKE OF COVID-19

“The first thing we did is we waived 100 percent of our royalties to all franchisees and I think we’re the only franchisor in North America that actually waived 100 percent of royalties. Everybody else either deferred or reduced. Alex also set aside a quarter million dollars of his own cash as a relief fund to help support our most vulnerable stores. And that went a long way, especially with food court locations. The third that was done was getting on the phone with landlords across the country to renegotiate rents to help our franchisees to be successful. And I believe again we’re the only franchisor in Canada that did that on behalf of our franchisees. Most other franchisors told the franchisees to contact landlords themselves and negotiate their own deals. We took the bull by the horn to make sure that we spearheaded those deals.

“The fourth thing we did is our marketing team came up with a strategy of having corporations sponsor burritos being sent out to frontline health care workers and hospital staff and we matched donations up to $25,000 and sent out almost $70,000 of burritos during the height of COVID-19 to feed frontline health care workers and hospital staff. Lastly, we renegotiated our rates with Uber Eats, Skip The Dishes, and Door Dash and boosted our marketing spend and as a result our sales from last year throughout COVID remained flat. And now we’ve actually seen increases – double digit increases year-over-year from all those efforts.”

As a result of COVID, many restaurants are closing their doors permanently creating plenty of real estate opportunities. Saraga said barBurrito would like to take advantage of that and take over those spaces. The company is approaching bankruptcy trustees, landlords, and realtors on a regular basis. Trustees are an interesting way to get in before the space even hits the market. The company is also talking to other brands that might want to give up space.

The company focuses on power centre and grocery-anchored locations but also likes to be on university and hospital campuses.

Competition Bureau Using Amazon Canada as a ‘Scapegoat’ Amid Incredible Online Growth

By
Mario Toneguzzi
-
WOMAN BROWSING AMAZON.CA ON IPAD

Canada’s Competition Bureau is investigating whether Amazon’s conduct on Amazon.ca is impacting competition.

Recently, the Bureau announced it is inviting market participants to provide input to inform its civil investigation into conduct by Amazon. The Bureau’s investigation is ongoing and there is no conclusion of wrongdoing at this time, it said.

CANADA’S COMPETITION BUREAU EXAMINING AMAZON’S IMPACT ON COMPETITION WITHIN MARKET

“The Bureau is examining whether Amazon is engaging in conduct on its Canadian marketplace, Amazon.ca, that is impacting competition to the detriment of consumers and companies that do business in Canada,” explained the Bureau on its website.

“The Bureau is conducting its investigation under the restrictive trade practices provisions of the Competition Act, with a focus on potential abuse of dominance.”

It said areas of interest include:

  • any past or existing Amazon policies which may impact third-party sellers’ willingness to offer their products for sale at a lower price on other retail channels, such as their own websites or other online marketplaces;

  • the ability of third-party sellers to succeed on Amazon’s marketplace without using its “Fulfilment By Amazon” service or advertising on Amazon.ca; and

  • any efforts or strategies by Amazon that may influence consumers to purchase products it offers for sale over those offered by competing sellers.

EXPERT SAYS AMAZON HAS HAD LONG-TERM DISRUPTIVE IMPACT ON CANADIAN RETAIL MAKETS

Gary Newbury, a retail supply chain strategist and serial transformation executive, said Amazon has had a long-term disruptive impact on retail markets due to its ability to both offer a substantial assortment and provide an efficient service to residential addresses unmatched by most small or mid-sized retailers.

“This has forced many retailers to re-evaluate their go-to-market strategies and bring about change. Some retailers have been successful, many have not made changes to compete effectively, despite them having a clear advantage with branding, last mile potential and continuing to build on personal service/customer experience. After all Amazon does have a ‘transaction’ rather than relationship building nature to it,” he said.

“As we approached 2020, having had a lacklustre 2019 trading, January had a rash of store closures and now the deep impact of COVID-19 has driven retailers to raise their concerns on Amazon’s practice of reviewing sellers of fast moving products on their marketplace, find a supplier who could produce an ‘Amazon own label’ and then position it visibly on the virtual shelf with a price point to attract consumers looking for a good deal. The advantage Amazon has is immense data analytics capabilities and a keenness to be the most customer centric retailer in the world.”

He said the practice of retailers checking out competitors’ products, price pointing, and volumes is decades old. Their very existence — and certainly their loyalty building programs — necessitates the development of similar, but slightly differentiated products. Even data on national brands sold through their banners will provide information on where future new product opportunities are.

“Furthermore, it is, perhaps, a less talked about practice of manufacturers developing private label products with a retailer, and then talking to their competitors, making some minor formula changes, repackaging, providing some ‘marketing support’, and hey presto, your competitor has quickly launched a directly competing product,” said Newbury.

“If you go to your local store and look at the positioning of private labels and national brands, price points and overall visual merchandising, you’ll likely see this in action every day. All Amazon has been able to do is to bring more analysis and data science to this situation (i.e. they are more efficient) with a view to drive their sales of own label products. If the national brands have built sufficient loyalty, they might see a slight dip, however, just as the national brand will place itself in various retailers looking to build volume, there is always a risk the same banner (or a competitor) will develop an own label to compete directly with it.”

Despite the cries of “it’s unfair”, logically the Competition Bureau should conclude “nothing to see here”, although to placate the concerns of legacy retailers they may make noises about there being a “borderline” case of merit, he explained. At the end of the day, it is in every retailer’s interest to attract consumers to their stores and persuade them to buy to meet their needs and wants. Amazon is no different in this regard, added Newbury.

“Legacy retailers must up their game, especially during this time, to differentiate the value they can provide to consumers through a combination of their store formats and online proposition. After all, Amazon.ca is a relatively new arrival. Many retailers have been here for decades and need to reinvent their propositions to win, rather than exercise the time of the competition bureau. Amazon is here to stay! Their consumers will see to that with their wallets,” he said.

EXPERT SAYS AMAZON IS AN EASY TARGET AND MAY BE BEING USED AS A SCAPEGOAT

Bruce Winder, author of RETAIL Before, During & After COVID-19 and President of Bruce Winder Retail, said the Bureau investigation signals that e-commerce and specifically Amazon-powered e-commerce has hit the tipping point in Canada.

“With COVID-19, the importance of online shopping has grown significantly and thus has received more attention from small merchants trying to generate cash via e-commerce to stay afloat,” he said.

“Amazon has now arrived at the point where they are an easy target — similar to the role Walmart played in the 1990’s — and an easy scapegoat for the consolidation that’s been hurting the retail industry over the last few years. In Canada, we operate in a retail oligopoly with few players controlling a large portion of the market. With this much concentrated power comes the temptation and potentially realization of market abuse.

“In my opinion, what Amazon is doing is really not that different than other large retailers — having worked at big retail for over two decades.”

He said large retailers are notorious for using their market size and dominance to persuade suppliers and other partners to comply with their demands. Big retail will engage in channel management activities that help semi-control the marketplace to their advantage while straddling the line between being onside and offside from a legal perspective. They also use supplier “partnership” programs to sell advertising packages that give participating vendors better positioning in flyers, online and in-store.

AMAZON PRIME PACKAGE BEING DELIVERED

“Big retailers have been using private label programs for decades which are designed to offer better value than competing national brand products while improving retailer gross margin. Sometimes these retailers “knock off” national brands with their own products and place these products “in the strike zone” on shelf or online to persuade the consumer to buy the private label over the national brand,” said Winder.

“Governments around the world have felt pressure from citizenry and small business to tame dominant players through antitrust investigations. Will these investigations yield legislation? Time will tell. Big firms spend billions of dollars on lobbyists to counter this offensive. Does Canada need regulation to protect consumers and small businesses? I say yes. Is Amazon any different than other large retailers? I say no.”

Michael Kehoe, a retail real estate specialist with Fairfield Commercial Real Estate in Calgary, said the Bureau investigation of Amazon will attempt to determine if Canadian retailers have been disadvantaged by not being allowed to list on Amazon.

“The importance of having a level playing field in an extremely competitive industry is of the utmost importance. The results of the scrutiny of this government agency could influence the future of our free-market retail landscape,” he said.

Canadians Concerned About Fraud when Shopping Online: Survey

By
Mario Toneguzzi
-
PERSON USING CREDIT CARD AND LAPTOP TO SHOP ONLINE

A new survey suggests Canadians are much more concerned about the safety of online shopping compared with consumers in the United States.

The survey, which was commissioned by ClearSale and conducted by Sapio Research, found that 26 percent of Canadians say online shopping is somewhat or a lot less safe than brick-and-mortar retail compared to 13 percent of Americans who felt that way.

Rafael Lourenco, EVP and Partner at ClearSale, which specializes in e-commerce fraud protection services, said when it comes to credit card fraud the retailers will have to pursue the money lost in the transaction and swallow the losses.

“Even though there is not a direct financial loss (for consumers) obviously the inconvenience is there meaning if someone (compromises) your credit card you may have to get another one and as a consumer they may be afraid of personal data being utilized in other types of fraud,” said Lourenco.

“Consumers don’t want to have their personal data info getting involved with fraud attempts and with fraud-like behaviour. On the other hand, consumers don’t want to have a bad customer experience by any of those extra layers of protection on the website blocking them from making their purchase.

“The concern on the merchant’s side should address both concerns on the consumer’s side.”

Some key findings of the survey include:

  • 77 percent of survey respondents say they would be more likely to shop online from vendors that offer fraud protection;

  • 38 percent of respondents said that they would never order from that merchant again if a merchant declined their payment (compared to 33 percent of Americans);

  • 25 percent said that would likely post a negative comment on social media after having a transaction denied by a merchant;

  • 46 percent said they would not even try one more time if a merchant declined their payment (instead, they would move on to another merchant); and

  • 40 percent of Canadians said they have abandoned a purchase online because of a checkout process that was too long or too complicated.

Lourenco said there is an important shift these days to online channels and ecommerce is becoming an important sales channel for many retailers. It is therefore important for them to make the purchase experience for consumers as seamless as possible and to alleviate any concerns about fraud by putting protective measures in place.

Stephen O’Keefe, a Toronto-based veteran of the retail industry and loss prevention industry, said retailers need to protect themselves against fraud and even thefts like ‘porch pirates’.

“The loss prevention focus is really in its infancy and because of the geographic climate it’s very expensive to conduct physical surveillance and so just as the customer is shopping using technology the retailer also needs to invest in technology that will protect themselves,” he said.

O’Keefe is President of Bottom Line Matters, a web-based loss prevention and risk management solutions company for small to mid-sized retailers.

He has had many years of experience with some of the giant retailers in Canada and globally. O’Keefe was Walmart Canada’s VP Loss Prevention & Risk Management. He currently advises on loss prevention affecting shrinkage and profitability for retailers and has more than 30 years experience in retail theft prevention with some of Canada’s largest retailers.

He is considered a leading authority on loss prevention, security, risk management, health and safety, and process improvement.

The retailers’ focus is so much on the growth in the online market and a race to the finish. But O’Keefe said there are preventative measures that should be incorporated with the operation of an online business.

“For example, the porch theft. If a customer calls and says ‘hey I didn’t receive my package’ the retailer is not going to challenge that and say that the customer did receive it. They’re going to assume that it was stolen and they’re going to replace the item and they’re going to offset the cost of the replacement through a customer service account.”

Retailers are faced with a decision of whether they increase operating costs with a risk mitigation plan or do they accept the risk and operate with lower quality of service.

“That’s a question that a lot of businesses are going to have in the near future if not already,” said O’Keefe.

The ClearSale report outlined five key trends:

The Increase in Frequency of Online Shopping

Almost half of online shoppers shop at least once every two weeks with many saying their online shopping has increased recently. People are shopping online because it’s quicker, cheaper and has a wider selection.

The Fear Around Online Fraud

Many believe online shopping is safer or at least as safe as high street shopping, however the biggest concerns for those who disagree are around the storing of their personal details and security measures used by the retailers they’re buying from. Shoppers would be more likely to use a website if reassured they were protected by the retailer instead.

Awareness and Protective Measures

Nine in 10 agree security is very important when shopping online. However only half always take security measures such as checking website legitimacy and using eWallets instead of card numbers. This indicates a mismatch between what they want and what they do on their part, though there is not much of a difference between those who have been victims of fraud and those who have not.

Differences Between the Older and Younger Generations

Older shoppers are more aware of fraud and more open to methods of protection. Although they are less put off from risks than younger shoppers, if they become victims they will be much less likely to return to the same website.

Shoppers are Happy to be Protected

Two thirds believe retailers should use tech for protection, and many would not be put off from online shopping by this. This suggests a willingness and openness to change. Change could be important, as a third believe it’s the website’s responsibility to protect them and would not return if they became a victim of fraud.

Pandemic calls for Canadian Retail Businesses to go cashless

By
Retail Insider
-

By Robert Smith

COVID-19 Pandemic has changed the way many businesses in the world operate. Every business has a story to tell on how they were affected. Many Canadian Retail businesses could not operate using cash and had to find other solutions. In the process, some store owners started taking payment alternatives, which involves cashless means, to keep business still going.

The truth is: contraction of the disease takes any form, and everyone is trying to be safe during this time. Therefore, most stores would rather you pay with debit or credit card, e-Wallet, Cryptocurrency, etc., than receive cash as payment. On the other hand, a few stores still accept cash payments. According to The Bank of Canada, the choice depends on the seller whether to receive or not.

Also, there are limitations to the use of these cashless payments in retail businesses. For instance, Michael Bryant, who is the CCLA (Canadian Civil Liberties Association) Executive Director and General Counsel, believes that cashless policy is quite discriminatory against a special set of people. Examples of people who may not find the alternative payment, i.e., debit/credit card, quite easy include Seniors, Handicaps, the Less-privileged, and so on. He says: “Stores are taking out opportunities from these people, and it threatens their survival.”

Before the Pandemic, Canada had the option of a card-based payment for about 70% purchases. However, two popular industries that used the cashless payment method were Online Gaming and eCommerce.

Industries that Used Cashless Payment Before the Pandemic

Internet based industries have been using online payments for years, E-commerce shops and online gaming are great examples of industries that have successfully implemented cashless payments.

The Online Gaming industry has several options available for paying online. When playing online for real money you must make sure to have a secure and safe way to deposit your money. Most online casinos accept payment via e-Wallet (Neteller, Skrill), Card (VISA, MasterCard), or Cryptocurrency (Bitcoin). Bank wire transfer is not exempted either.

While many online casinos in Canada have already started using PayPal, many European countries like Ireland still don’t have as many online casinos that accept PayPal as a payment method. That means cashless payments in casinos varies depending on the country.

The Ecommerce Industry has also been growing tremendously over the years and there is no doubt the use of online payment methods has added to this success. Several people rather stay at home and order for their personal needs online, such as fashion items, gadgets, and so on. In a bid, they are prompted to card payments, which is quicker and faster.

According to Statista, the use of a credit cards while shopping online has been growing drastically since 2014. In comparison to European countries like France, where the use of credit cards is growing but not as fast. The upside of this is that the ecommerce industry would not be affected by the Pandemic in terms of payment.

Also, there are more cashless payment organizations in Canada, compared to Europe. Thus, the survival of the industry depends on this factor.

Best Retail Careers Int’l Launches Luxury Careers Canada in Partnership with Retail Insider

By
Craig Patterson
-
LUXURY CAREERS CANADA

“We want to tightly control the audience exposure this new support product offers so that posters and advertisers will no longer be inundated with non relevant applicants. Our goal is to be the go-to hub for all luxury retail news and staffing in Canada. We are launching with Toronto’s luxury market first to ensure a smooth transition in Canada’s other luxury retail regions. Posting ad rates will be significantly less than traditional sponsored positions; where only luck determines if the retailer reaches their target candidate audience.”

Contact Luxury Careers Canada:

To learn more about the benefits and fees of Luxury Careers Canada, click Here.

To kick start their program, Luxury Careers Canada is offering free promotional job postings of up to 10 positions for the first 10 retailers who register. Also introductory fees for all job postings for the first 30 days will be offered at 50% of the regular fee.

You can view the board demo at: brcareers.com/luxury-careers-canada

Be the first to access this unique and curated premium luxury job platform. Simply click the link below for direct contact. Additionally, feel free to reach out to Craig Patterson from Retail Insider directly at: craig@retail-insider.com. He has rate information at hand to support luxury retailers.

Retailers also indicated they were struggling to connect quickly with qualified candidates within the Bloor-Yorkville area in Toronto, and Yorkdale Shopping Centre in North Toronto. It was glaringly obvious a better solution was required, as an alternative to the typical commercial job board ad posting.

Working with her own developers, Luxury Careers Canada has been carefully constructed to support retailers who want to reach elite candidates in the Toronto regions of Yorkdale and Bloor-Yorkville. The plan is to expand to other regions in Canada later this year.

MALL INTERIOR WITH LUXURY STORE

“We noticed a shortfall in the luxury sector where retailers could directly broadcast their open positions to a target audience of qualified candidates. With our massive network of followers and business connections approaching 50,000 retail employees, we were uniquely positioned to speak directly to the labour pool luxury retailers wanted to reach quickly” said Ms. Sears.

Luxury Careers Canada will operate as a daily broadcasting of luxury retail careers through Retail Insider’s daily email newsletter, and daily postings on the Best Retail Careers International Inc. LinkedIn page.

By Retail Insider

Best Retail Careers International Inc. is excited to announce the launch of Canada’s first premium luxury job platform. It’s part of a partnership with Retail Insider offering a deluxe job board for luxury retailers.

After months of market research, Suzanne Sears, President of Best Retail Careers International Inc. and Retail Staffing Canada Inc., came to understand that marketing in Canada for luxury retail staffing was severely lacking career support services, specifically dedicated to this sector.

Unprecedented Spike in Retail Insolvencies in Canada Due to COVID-19: Expert

By
Mario Toneguzzi
-
FILING TABS NAMED INSOLVENCY, LIQUIDATION, CREDITORS DEBTS

The COVID-19 pandemic has left a trail of devastation for many companies who have struggled just to stay alive amid the vicious economic downturn.

RETAIL AND CANNABIS HARDEST HIT WITH INSOLVENCY FILINGS DUE TO COVID-19

But an expert in insolvency said the overall number of businesses filing for insolvency, bankruptcy, and creditor protection so far this year hasn’t changed much from a year ago, except for two industries — retail and cannabis.

Henry Louis, Founder and Editor of the Insolvency Insider publication, said people would think that insolvency filings would be up across the board due to the challenges COVID has created for so many companies in Canada.

“But if you look at the statistics it’s actually pretty flat in comparison to last year,” he said. “They’re at very similar levels to last year. Everybody talks about the big storm that is coming and I think it’s coming but we’re not there yet for sure.

“The one thing we have seen less of, believe it or not, is receiverships. Receiverships are when banks initiate enforcement proceedings. Specifically if a company defaults and the lender basically wants to realize on their security they appoint a receiver to basically go in and realize on all the assets and pay back the bank. For the most part, that activity is on hold. The banks are being a lot more gracious with their borrowers. They’re giving them extensions, they’re forbearing. And from what we’re seeing and what we’re hearing a lot of these forbearances are basically to sometime in the fall when these forbearance agreements are being kind of extended to.

“Everybody kind of senses at some point the banks are going to begin enforcement proceedings. It just hasn’t happened yet.”

But currently there are some exceptions to the fact that filings are flat right now.

“Retail filings are definitely higher than we’ve seen historically. There’s been a lot of retail insolvencies that have been quite well covered – Reitmans, Laura, Aldo, Moore’s clothing just got protection last week. Without question the pandemic is creating a huge blow for these retailers. They’re carrying huge overhead at these physical locations and when sales dry up many of them just can’t hang on,” said Louis.

“I don’t think it’s fair to put all the blame on the pandemic. Many of these retailers were already struggling prior to COVID. I think the pandemic has just tipped them over the edge especially the ones that were maybe not as well capitalized as others.

“Retail filings are definitely up. I don’t think we’ve seen the end of that. There’s a lot more coming down the pipeline.”

The other industry Louis has definitely noticed more filings is the cannabis industry.

“It’s not a COVID-related issue. These filings are more just a shake out from the growing pains of a new industry,” he said. “It’s a brand new industry and everybody made assumptions as they were ramping up in terms of what the market demand would look like and how to prepare for this new industry. And a lot of those assumptions haven’t yet materialized.

“The demand is just not what everyone expected yet. There’s almost too much supply right now for the current demand and the investors’ appetite to put more capital has just completely dried up. Everybody kind of realized they overshot the mark and now nobody’s putting more money into it. As a result, any of these producers that were under capitalized – and were spending a lot of money to ramp up – now because sales haven’t materialized as they expected they can’t raise any more money and therefore they need to file for creditor protection.”

Insolvency Insider was founded in 2014. The publication provides the news for the restructuring community such as bankruptcy trustees, insolvency lawyers and everyone involved in the industry. It reports on all the new insolvency filings across Canada and important court decisions out of insolvency proceedings.

“We basically keep all the professionals in the loop on what’s happening in the industry,” said Louis.

The news recently has had many stories of retailers, and many well-known retailers, filing for creditor protection. There are two mechanisms for that. One is through the Companies’ Creditors Arrangement Act. There is also the Bankruptcy and Insolvency Act where companies can file a Notice of Intention to file a proposal.

“They basically do the same thing. They give you a timeout from your creditors. All enforcement proceedings are stayed or stopped. So nobody can take action against you and it gives you time to formulate a plan for how you plan to address your debts,” explained Louis.

He said every industry will be affected in some way because of the economic fallout from COVID. Retail and restaurant are obvious industries to be impacted initially.

REAL ESTATE INDUSTRY WILL POTENTIALLY FACE ISSUES IN NEAR FUTURE

The one industry that might have some issues in the near future is real estate, explained Louis.

“Every industry has some angle of real estate in it. Most businesses have a physical presence and as businesses struggle landlords are going to get sucked into all these insolvency proceedings and they’re going to take a hit,” he said.

“And I think the second area of concern with real estate is the fact that the pandemic has really made people second guess how important their physical locations really are . . . Now more people are working from home and people feel maybe it is a viable option. These companies don’t need to be in the middle of downtown paying expensive leases for all their employees. I think there might be some real fundamental changes with tenants which will have an impact.”

Oliver Berg Discusses Style Democracy’s Future as Liquidator Eyes Global Expansion

By
Sean Tarry
-
IMAGE: STYLE DEMOCRACY

The company has hosted somewhere in the region of 450 warehouse and pop-up sales events since its inception a little more than 20 years ago. It’s worked with some of the world’s most iconic brands, including Nordstrom, Holt Renfrew, Dolce & Gabbana, Levi’s, Lacoste, The Gap, Ted Baker, Hugo Boss, TOMS, Tommy Hilfiger, and dozens more. The success it’s enjoyed at its events has been immense, often selling out entire inventories for its brand partners. And the trust and respect that its built among an engaged and adoring community of ‘style democrats’ means that its reputation in the liquidation space often precedes itself. Despite all of this, however, Oliver Berg, Vice President of Style Democracy, believes that the company has the potential to be even more.

OLIVER BERG

He is the latest in a line of hugely successful Bergs, inheriting leadership of a business that has an extensive and storied history, one that was started by his great-grandfather, Ira, back in 1929. The company originated as a small women’s boutique before expanding in scope during the decades that followed to become known as one of the premier retailers for designer labels in the country. Through the years, leadership of the company was passed down from one generation to the next, with Russel Berg and Michael Berg (Ira’s son and grandson) subsequently at the helm of the business for 50 and 20 years, respectively. A combination of detrimental effects resulting from a low Canadian dollar, increasing clothing tariffs and the rise of cross-border shopping led to the demise of Ira Berg, with the retailer closing its doors in 1997.

Ira Berg didn’t go out with a whimper, however. Instead, the family business closed with a liquidation sale unlike anything that it had ever seen. On the heels of its success, Michael Berg immediately recognized the interest and appetite among the store’s patrons for a “can’t miss sale”. It was only a few short years later when the family business – one responsible for introducing Torontonians to brands like Prada, Celine, Louis Vuitton, Benetton, DKNY and Kiehls, to name a few – retooled and renamed itself, marking the beginning of one of the leading warehouse liquidators for brands in North America.

Building on Success

With a pedigree and lineage like this, one could perhaps be forgiven for resting on the family’s earned laurels and simply staying the course. But this isn’t the philosophy of Oliver Berg, whose leadership and vision are guiding Style Democracy into an entire new age of growth and possibility. In fact, the company just celebrated its most successful year to date. It’s an achievement that Oliver almost seems to take in confident stride, but it’s one that isn’t lost him, either.

“We’re grounded in our roots,” he says modestly, “and we stay focused on what we do well for our consumers and the brands that we work with. But Style Democracy continues to grow and succeed as a result of the work, commitment and vision of everyone within the company today.”

Oliver became involved in the business at a very early age, attending some of his father’s shows on weekends to help box and unbox event materials behind the scenes. He was only 21 when he took on the role of events manager, planning coordinating and managing all aspects of the warehouse events leading up to the show and on the show floor itself. And soon after, around the age of 24, his dad Michael started to integrate him more and more into some of the company’s day-to-day operations, including greater involvement in client relationships, sales and business development.

“I quickly realized at that point that it’s a side of the business that really appealed to me,” he explains. “I started to quickly really understand the economics of the business. And I recognized then that these were areas that were more suited to my strengths. As much as I enjoyed event planning and management, I really started to enjoy the hustle of the sale. In a good year, we do about 12-15 warehouse sales, so every event and each client is lucrative to our success. Everything about the pursuit of that next big client and the sale and the potential that it posed for our business started to mean a lot to me.”

A Fresh Perspective

Today, Oliver Berg has developed into one of the industries brightest young talents. Though he is quick to recognize the teachings that were passed down to him by his father, he’s increasingly being recognized by peers as a leader who has been able to provide a fresh perspective, instilling a nimbleness and flexibility into Style Democracy’s operations that allow it to pivot more easily and to continue to find opportunities during challenging times.

The most obvious and recent example of this is in Style Democracy’s operational response to the COVID-19 crisis. For a company that not only specializes in the in-person warehouse sales event, but indeed relies on it, the pandemic presented some interesting, if not critical, challenges for it to overcome.

“We became aware early on that, because of health restrictions, we wouldn’t be doing any in-person shows anytime soon,” he explains. “And so, in trying to understand the long-term ramifications of COVID, we realized that this might actually be providing us with an opportunity, and we didn’t want to waste it. So, we acted quickly to set up an ecommerce platform and have now run six online warehouse sales in the last two months.”

In addition to building a platform that would allow Style Democracy to host sales online, the company also repurposed its team to be able to manage various roles of ecommerce and even brought on a couple of experienced ecommerce consultants to help advise the team. And one could figure that during a time when there is so much excess inventory, the sky could be the limit concerning the company’s foray into omnichannel services.

“We’re definitely optimistic that we’ll be returning to in-person warehouse sales soon. But the results that we’ve experienced so far with our online sales are very positive. Because of this, we think that we have an incredible opportunity to offer both types of sales to our clients and customers. It’s opening up a much wider audience for us. Ecommerce provides us with greater opportunity to utilize technology to scale, allowing us to think bigger, to think outside of Canada, to think globally and sell around the world. It’s really just a matter of how we integrate physical and online sales effectively.”

What’s up Next

As it seems, so far so good. Style Democracy just last week wrapped up it’s latest online warehouse sale for Ted Baker and another huge success for the company. And it’s also already lined up two more (a multi-branded luxury streetwear sale featuring Off-White; Anti Social Social Club, and Palm Angels, and a multi-branded luxury footwear sale featuring Gucci and Prada), as well as three physical warehouse sales, including the first Canadian sale for Sandro/Maje (SMCP) Canada.

During a moment in time when the landscape seems to offer businesses more challenges than opportunities, Style Democracy has, through innovation and savvy, begun to navigate a way forward, positioning the company in excellent stead for the future. Nonetheless, Oliver Berg remains grounded and concentrated.

“Its all about the results, and we deliver results for our clients. It’s what we’ve always focused on, and we’ll continue to do so. We’re always going to be a warehouse sales company, but we don’t consider ourselves to be a retailer. In what we do, though, we become the most powerful retailer for retailers and brand for brands. We view these relationships as partnerships. And our priority will always be to provide great representation for all the partners we work with.”

214: Oakridge Centre Stores Shutting Until 2024 for Incredible Redevelopment [Exclusive]

By
Retail Insider
-
exc-5f3d7d5ddcb2184316f5582e

This week Craig & Lee break exclusive details on the Oakridge Shopping Centre retail transformation in Vancouver, British Columbia. The discussion touches upon tenant closures, accelerated construction schedule and what the final community will look like for Vancouver. Some history about the centre is also discussed, including the enclosure of the mall in 1984 which saw Woodward’s relocate its flagship to Oakridge, as well as Canada’s first Abercrombie & Fitch as it once was in decades past.

The Weekly podcast by Retail Insider Canada is available on Apple Podcasts, Stitcher, TuneIn, Google Play, or through our dedicated RSS feed for Overcast and other podcast players.

Discussed this episode:

  1. Oakridge Centre Retailers to Close Until 2024 Amid Vancouver Mall Redevelopment [Exclusive]

  2. Historical Retail Articles including: Oakridge Centre Retail Transformation to Anchor Vancouver’s ‘City of the Future’ [Exclusive Interview] (2018) and Vancouver’s Oakridge Centre to Get Complete Overhaul + New Anchor Store (2012)

Subscribe, Rate, and Review our Retail Insider Podcast!

Follow Craig:

Follow Retail Insider:

Listen & Subscribe:

Share your thoughts!

Drop us a line at Craig@Retail-Insider.com. You can also rate us in Apple Podcasts or recommend us in Overcast to help more people discover the show!

Share your thoughts!

Drop us a line at Craig@Retail-Insider.com. You can also rate us in Apple Podcasts or recommend us in Overcast to help more people discover the show!

Background Music Credit: Hard Boiled Kevin MacLeod (incompetech.com). Licensed under Creative Commons: By Attribution 3.0 License. http://creativecommons.org/licenses/by/3.0/

Oakridge Centre Retailers to Close Until 2024 Amid Vancouver Mall Redevelopment [Exclusive]

By
Craig Patterson
-
RENDERING OF RENOVATED OAKRIDGE CENTRE: QUADREAL

Almost all of the retailers at Vancouver’s Oakridge Centre will close their doors at the end of September until 2024 to help accelerate the process of the mall’s incredible overhaul. When Oakridge reopens, the mixed-use ‘city centre’ will be unlike anything in Canada and will be the single biggest development in Vancouver’s history.

“Not only does this repositioning allow for existing and additional retailers to be in the redeveloped shopping centre sooner, it also means that the public park will come online in an earlier phase of the development,” said Andy Clydesdale, Executive Vice President of Retail for QuadReal Property Group, one of the co-developers of the new Oakridge city centre along with Westbank Corp. “We are committed to opening the reimagined Oakridge as quickly as possible and look forward to welcoming back our world-class tenants.”

Some retailers in the mall had already closed ahead of the redevelopment. That includes Harry Rosen, Michael Kors, Coach, and others.

AERIAL VIEW RENDERING OF RENOVATED OAKRIDGE CENTRE. RENDERING: QUADREAL
RENDERING OF EXTERIOR OF RENOVATED OAKRIDGE CENTRE. RENDERING: QUADREAL

A handful of retailers will stay open throughout the construction process. That includes the 182,000-square-foot Hudson’s Bay anchor store which before 1993 was the flagship location for local department store chain Woodward’s. The Crate and Barrel store at Oakridge as well as the food court and services such as medical/dental offices will also remain open during construction.

Shutting most of the mall is a bold move given the prior productivity of the shopping centre. The Retail Council of Canada Shopping Centre Study in 2018 (authored by Retail Insider’s Craig Patterson) showed that annual sales per square foot for Oakridge were approaching $1,600 and were growing quickly, particularly given the mall’s high-end stores such as Tiffany & Co. and Harry Rosen.

The original plan was to renovate the retail centre in phases while keeping most retailers open during the process.

A representative from QuadReal said that the landlord made the decision to shut most of the mall temporarily to “dramatically accelerate large portions of the development” which will allow the majority of the retail component, community amenities, international-style food hall and nine-acre park to open and serve the Vancouver community upon completion in 2024.

The new Oakridge Centre, which is envisioned as a mixed-use community in the heart of Vancouver’s affluent West Side, will be a mixed-use, transit-oriented neighbourhood hub that will offer nearly one million square feet of unique, experiential retail in addition to office space, residential towers, and a nine-acre public park and community centre, in addition to many other amenities that support the arts, seniors and the neighbouring community.

The existing 574,000-square-foot shopping centre, which sits on 28 acres of land will be transformed into a major 4.5 million square foot hub of retail, residential, workspace, parks, and civic space. Included will be a massive community centre, public library, performance facility, dance academy, daycare, culinary experiences, a park, office space, and residential towers that will house about 6,000 people in more than 2,600 homes.

Oakridge will anchor an up-zoned neighbourhood that is projected to grow by more than 50,000 people within a kilometre radius over the next two decades. QuadReal partnered with Westbank Corp. and together engaged Henriquez Partners Architects, Tokyo-based interior design firm Wonderwall, and other design partners for this initiative that will be a model for future high-density retail mixed-use redevelopments globally.

About 26 million shoppers are expected to visit the expanded centre annually, making it one of Canada’s busiest malls in terms of footfall. Oakridge’s retail component will see an overhaul that will be almost unrecognizable, with the existing retail space set to almost double in size to about 1-million square feet, including indoor retail as well as an outdoor pedestrian street.

The retail centre itself will include a collection of conceptualized streets that will house a variety of retail tenants. These are described with terms such as “luxe run”, “trend experience”, and a “high street”. The mall’s “luxe run” is expected to house more than 20 international luxury retailers, including some that currently lack a presence in the market or in Canada. Given the real estate constrictions of downtown Vancouver, Oakridge could end up housing tenants that would ultimately have the centre become a second ‘luxury zone’ for Vancouver.

Oakridge’s pedestrian-only high street will be part of the mall’s outdoor component that will run north-south along the length of the mall’s western perimeter. A new perimeter road will also run along the western edge of the property.

The updated retail centre will feature two larger anchors, as well as several junior anchors that will be part of the retail mix. Hudson’s Bay will continue to be Oakridge’s largest anchor tenant in a brand new 140,000-square-foot ‘next generation’ store which will replace the existing Bay location. Oakridge will also house a major grocery tenant, Sobeys, which will replace the centre’s existing Safeway store (both are owned by Empire Company).

JOGGERS ON A PATHWAY IN THE NEW PARK AT OAKRIDGE. RENDERING: QUADREAL
Oakridge Centre google Map – Click for Interactive Map

QuadReal said that it is is working to bring back former key retailers including Harry Rosen, Apple, and Tiffany & Co. to create unique experiential concepts that will be aligned with its future thinking for retail.*

Other future-proofing for the centre will include provisions made for e-commerce fulfillment — a trend that has already accelerated quickly amid the COVID-19 pandemic. Other offerings at the new Oakridge will include ‘five-star concierges’ for shoppers with capabilities of being able to deliver packages to one’s car or residence, for example.

Approximately 6,000 parking spaces are planned for the centre, the majority of them with electric vehicle charging stations. Valet parking will be an important part of the mix. Underground bicycle silos will allow riders to quickly stow their bikes below ground in a secure 11-metre deep well. With a simple swipe of a pass, bikes will be retrieved or stored in about 13 seconds. QuadReal said that it is planning for a future where transportation will be different as self-driving cars are expected to proliferate in the coming years.

The Oakridge Centre redevelopment will be one of the most interesting in Canada to watch over the next several years. Its scale is unprecedented and its design is groundbreaking. The centre is anticipating to eventually see about 42-million visitors a year, including 26-million shoppers, five-million cultural visitors, five-million park visitors, four-million residential visitors, and two-million library patrons.

*This article has been updated to reflect updated information from the landlord.

1...891892893...1,283Page 892 of 1,283

FEATURES ON RETAIL INSIDER

spot_img
spot_img

About

Contact

Media

Follow

© 2025 Retail Insider Media Ltd. All Rights Reserved. The content on this website is protected by the copyrights of Retail Insider Media Ltd. or the copyrights of third parties and used by agreement. No part of any of the content of this website may be reproduced, distributed, modified, framed, cached, adapted or linked to, or made available in any form by any photographic, electronic, digital, mechanical, photostat, microfilm, xerography or other means, or incorporated into or used in any information storage and retrieval system, electronic or mechanical, without the prior written permission of Retail Insider Media Ltd. or the applicable third party copyright owner.