BIRKS LOCATION IN SQUARE ONE SHOPPING CENTRE. PHOTO: SHOPSQUAREONE
Fine jewellery brand Birks, which has been in business since 1879, has implemented comprehensive measures for the reopening of its stores during the COVID-19 pandemic.
Jean-Christophe Bedos, President and CEO of Birks, said the company, like every other retailer, was taken by surprise by the shut down of the retail industry when the coronavirus crisis hit the country.
“The industry was not prepared for that,” said Bedos. “It was unprecedented. We had to apply a general lockdown since March 18 essentially. In terms of impact, of course our revenue dropped from a nice level of business to zero for a majority of stores.
“We have kept our e-commerce operations open. They have obviously very nicely benefited from the situation. And we also maintained what we call the concierge service because our business is client-based. Birks is part of Canadian life in terms of celebrations, sharing, the topic of love, engagement, anniversaries, graduations. So we have had demand. Demand was maintained over the phone or email.
“The very first week of lockdown we created a concierge service in our flagship in Montreal, flagship in Toronto, in Calgary, and in Vancouver. What that meant, although the stores were closed, we made ourselves available for essentially going back to the old mail order. We did shipments from those stores. We could pick up the phone, we could answer emails, and we were available for our clients. That has helped to maintain a small level of sales and alongside that concierge service we have e-commerce.”
There are 28 stores in Canada from Victoria to Quebec City.
By the beginning of this week, Birks had reopened 13 stores across the country. Bedos said the reopening of the other stores depends on the direction each individual province takes.
He said the retailer has taken the time to learn from best practices abroad about the reopening of stores. It learned from U.S. colleagues in the jewelry industry and worked with the Retail Council of Canada.
“We built a very solid format where we have the list of best practices, the list of protocols, the what to do list before opening the store, the training sessions for every store, and we invested of course in purchasing all of the necessary protective equipment for both our sales professionals and our clients for when they are in the store,” said Bedos. “All of the investment was all written down and shared to every team prior to reopening on a store-by-store basis.”
In addition to masks and gloves, the stores will also have plexi shields. Each piece of jewelry touched by customers will be sanitized after it has been handled. A small number of items that can’t be disinfected will be put in a plastic pouch and placed in a vault for a number of days until safe to be taken out again.
In 1901, the eldest son, William Birks, became head of the company and Birks began to expand across Canada with store openings in Ottawa (1901), Winnipeg (1903), and Vancouver (1907).
In the 2000s, Birks was one of the first companies to offer diamonds mined in Canada. Each stone is engraved with a unique serial number associated with the mine of origin.
In 2019, Birks reinvented the retail experience through the renovation of the historical Square Phillips store in Montreal and the Bloor store in Toronto.
TrendSavvy, one of North America’s fastest growing online fashion marketplaces, has opened a flagship store in central Montreal with potential plans in the future to expand into other markets.
The unique concept, in a 1,200-square-foot space, is designed to offer customers an enhanced, personalized shopping experience, said Jenn Feiden, the company’s CEO, adding that the physical store is by appointment only.
“Unlike most online retailers, TrendSavvy seeks to connect with our customers on a deeper, more personal level, curating assortment not only based on the latest trends, but also on the specific tastes and desires of our extremely loyal and growing client base. We set ourselves apart by offering an elevated and customized shopping experience,” said Feiden.
TrendSavvy began in late October 2017. The reason for its inception began with Feiden’s background working alongside her husband for many years in the retail industry in such places as Beyond the Rack and Sears.
IMAGE: TRENDSAVVY FACEBOOK
She said TrendSavvy was launched in an effort to fill a major void in the premium online marketplace. With over 15 years of E-tail experience Feiden and her husband noticed a major need for strong customer service and sought out to create a marketplace that bridged that gap.
She said TrendSavvy caters to women, men, and children featuring over 500 fashion brands. Products are anywhere from mid-tier to high-end designer brands. She describes TrendSavvy as being between a Winners and a Revolve. The focus currently is on women but as the retailer grows it will be bring in other product lines to service more demographics.
“We have grown this into quite a big platform. We have almost 30,000 customers in our database right now. We’ve become known not just as a destination for shopping but really a place where customers feel like a really personal experience. That’s really what we were striving to do because that really doesn’t exist online. There’s a lot of really amazing boutiques where they cater to customers in that way like Holt Renfrew but we didn’t feel that existed online,” said Feiden.
“So we wanted to recreate that personal experience in the online concept. So our customers have become like part of our family. They’re extremely loyal. We have an insane customer return rate of 70 per cent which the online norm is about 40. That’s kind of become our DNA, taking care of customers. We curate our collection based on our returning customers – what their needs are, not what our buyers are seeing as trends. It’s really what our customers are looking for. Our business model is really devoted to the customer.”
The decision to open a physical store was because of the retailer’s loyal client base and there was a demand for clients to be able to touch and feel the products TrendSavvy was selling. That store opened at the beginning of March.
The online business currently services all of North America and has plans on expanding worldwide in the next year to Europe and Australia perhaps.
“If the store is successful we have plans to expand in every major city where we have a large client base which would be Toronto, New York, Los Angeles. The sky’s the limit for that. What makes it really easy in terms of operations is having the by appointment only. It allows you to really curate based on what the needs are so you’re not sitting with a store that has dead stock basically,” said Feiden.
“The storefront is curated with our best sellers but basically what happens for clients who want to come shop here they have to directly message us and they’ll be put in contact with what we call a concierge. That person kind of acts as a stylist. The person will give them a wish list that they’d like to try on based on what they see on the website. The stylist will then put together their wish list and give them availability in terms of when they can come shop and the stylist will also not only pick out what the customer’s wish list is but couple it with products they think would pair well with what the customer chose. The way our online business is it’s a very intimate experience. They’ll be greeted with coffee and little bites and really feel at home. We wanted the customer to feel very loved.”
On Tuesday and Wednesday of this week, two major retail groups in Canada filed for bankruptcy protection as businesses struggle after prolonged shutdowns due to the COVID-19 pandemic.
Both retail conglomerates operate stores primarily in suburban shopping centres. Landlords have demanded rents be paid despite stores having been closed by law, which has resulted in many retailers looking to bankruptcy protection to maintain operations while getting out of some leases and rent obligations.
PHOTO: VERO MODA
Bestseller Canada:
Bestseller Canada, which operates 60 Jack & Jones and Vero Moda stores in Canada, filed for creditor protection on Tuesday of this week. At one time, Bestseller-branded multi-brand stores operated in Canada, though all closed earlier this year. Bestseller Canada said in court documents that it owes $39 million to creditors.
Most of the 60 store locations operate under the Jack & Jones label. Jack & Jones is a youthful fashion line featuring men’s apparel and accessories. Canada is home to several Vero Moda store locations as well — the brand is known for its value-priced women’s apparel. Both brands can also be found in multi-brand retailers such as Hudson’s Bay. Other Bestseller brands carried in multi-brand retailers include Only&Sons, Selected Homme, Noisy May, and others.
Bestseller Canada is a division of the Denmark-based Bestseller group which operates globally. In February, Retail Insider reported that Bestseller Canada had shut all five of its Canadian multi-brand stores with locations in the Montreal area as well as in Winnipeg (the Winnipeg store was converted to a Jack & Jones). Canada was the first international market for the Bestseller store concept and it was expected to be expanded across the country after launching in 2015.
Family-owned Bestseller was founded in 1975 in Brande, Denmark with an aim to provide "fast affordable fashion for women, men, teenagers, and children", according to its website. The company is one of Europe's largest fashion companies and its products are available in markets across Europe, the Middle East, Canada, and India.
One source said that 13 of the 51 Jack & Jones store locations in Canada would be “handed back to landlords” with more information forthcoming. All Vero Moda locations are expected to close according to another source familiar with the situation.
PHOTO: JACK & JONES
Comark Holdings:
On Wednesday of this week, Ontario-based Comark Holdings Inc. announced that it had filed for creditor protection and that it plans to remain operational while shutting some stores. Comark operates retail banners in Canada including Bootlegger, Cleo, and Ricki’s. Comark filed for bankruptcy protection in 2015 as well.
According to its website, Comark operates 310 store locations in Canada under the three banners. Denim-focused Bootlegger was founded in Vancouver over 45 years ago and operates 82 stores across the country with apparel for both men and women. Cleo and Ricki’s are female-focused fashion brands also with stores across the country. Comark, which was founded in 1976, grew by 58 stores in 1979 when it acquired the Mississauga-based Irene Hill brand and renamed it Cleo in 1994. In 1982, Comark added Winnipeg-based Ricki’s stores to the group. The Cleo banner employs more than 850 people in its 99 stores, and the Ricki’s banner includes 129 stores across Canada.
About 40% of Comark’s stores are in Ontario. Stores in malls lacking exterior entrances are not permitted to reopen in the province until at least the end of this month. As of June 10, 210 of Comark’s 310 stores will have reopened — the 92 Ontario locations will remain closed as well as eight units in Newfoundland.
In a statement on Wednesday, Comark said that its goal is to remain operational while shedding some less productive storefronts. “Comark commenced proceedings under the CCAA to restructure its operations and address the impacts of a challenging retail environment and the COVID-19 pandemic. The restructuring proceedings will provide Comark the opportunity to optimize its store footprint and leasing costs with the aim of emerging as a stronger business, better able to serve and support its loyal customers,” the statement said.
PHOTO: BOOTLEGGER
The majority of stores will remain open, according to Comark, with safety measures in place as stores reopen. Gerry Bachynski, President of Comark, said, “Top of mind for our loyal customers and employees is that the majority of our Ricki's, Cleo, and Bootlegger stores across Canada continue to be open for business, with physical stores scheduled to re-open in conformity with local guidelines.
“Each of our banners will continue to stock our exclusive apparel and all of our rewards and gift card programs will continue to be honoured at this time. As has been the case since the start of store closures brought on by COVID-19, each banner’s webstore continues to remain open,” he went on to say.
As part of the CCAA proceedings, Comark says that it intends to seek the Ontario Court’s authorization to solicit proposals for sale or investment transactions involving the company.
Prior to the March 2020 store shutdowns due to COVID-19, Comark was in the process of streamlining its business operations according to court filings. When stores shut temporarily, the majority of Comark’s 2,500 employees were laid off — most employees are described as being “of short-tenure, non-union retail employees”. The closures hit cash flow which was already strained and as of last month, Comark estimated that it had lost about $50 million in sales during the temporary store closures.
PHOTO: CLEO
A “severe liquidity crisis” resulted and according to court documents, Comark cannot remain a going concern without bankruptcy protection. Borrowing more money is not an option according to documents, and Comark said that it had not paid rent for its retail stores for the months of April, May, and June — the amount now owed is about $9 million according to court documents. As of Tuesday, Comark had received notices of default for 56 of its store locations.
Comark said in court documents that it needs “a significant show of support” from its landlords to restructure the business. Negotiations will be ongoing and “a workable solution with landlords must be reached by June 19, 2020 to determine the future viability of business and implement a restructuring by the end of June”. Some store closures and permanent employee layoffs will “right-size the Applicants’ business”.
Reopening stores is proving challenging for Comark. Court filings stated that “there are many challenges associated with reopening safely,” going on to say that “It takes one to two weeks to determine whether store employees can return, additional time to find replacement employees if needed, and at least two days to sanitize reopening stores, plus any time required to purchase personal protective equipment for employees”.
As of May 2, Comark’s book value was $66.9 million and liabilities stood at $82.3 million. In the fiscal year ending February 29 2020, the company saw same store sales decline 6.5% — in the year prior, sales had remained about the same as they were in 2018. In fiscal 2020, Comark saw a decline in store level cash flow of 28% or $15.6 million, resulting in a net loss of about $7.6 million.
PHOTO: RICKI’S
Interestingly, the Ricki’s banner has traditionally been the most profitable and court documents stated that “In past years, Ricki’s profits have been used to support Cleo and Bootlegger’s losses”. As of April 2019, however, all three banners had seen a decline which Comark attributed to a “decline (which) has affected much of the retail industry”.
In the month of June, Comark will experience a negative cashflow of approximately $6.5 million, including $3.2 million in June rents according to court filings.
The situation is now dire for Comark. “For the week of May 24th, comparable store sales for open stores are 52% lower than the previous year’s sales,” according to filings. A liquidity crisis has resulted as Comark is unable to make further draws under the CIBC Credit Facility. Its parent company Parentco is “not prepared to advance further funding” either.
Landlords will be notified by a standardized letter “setting out the concessions needed by (Comark). The effectiveness of these agreements will be conditional on a critical mass of landlords signing such agreements on or before June 19, 2020.”
Inventory is an issue as well — it’s almost time to place orders for the fall fashion season. Comark said in court documents that its “placing orders for additional inventory is contingent on securing sufficient landlord support to proceed with a going-concern restructuring”.
Concluding Remarks:
While stores were mandated to be shut because of the COVID-19 pandemic, landlords have demanded that rents be paid. Some landlords have given breaks including rent reductions and deferrals, while government programs have been put in place with the intention to help retailers with rent obligations. Nevertheless, the financial burden placed on some retailers because of rents and other costs have led to bankruptcy protection filings and one of the reasons is for retailers to shut less productive store locations.
Insiders are saying that more retailers in Canada are expected to file for bankruptcy protection in the coming weeks and months. And while stores have started reopening across the country, a consumer slowdown is expected to result in challenging times that will continue into the fall and beyond. Many Canadians have lost jobs while others have lost wealth due to stock market declines and low oil prices.
At the same time, many consumers are staying away from visiting physical retail spaces out of the concerns of potentially becoming infected with the coronavirus. While others work from home, the need for new fashions has been reduced — all are bad news for many retailers seeking to grow retail sales at a critical time.
Global retail expert Joe Jackman calls this the time of the Great Reset for the retail industry as it grapples with the crisis brought on by the COVID-19 (coronavirus) pandemic and the uncertainties it has created for the future.
Jackman, founder and CEO of Jackman Reinvents, a very well-known consultancy that has worked with many major brands, said now is the time for many retailers and brands to reinvent to overcome the challenges presented by the current health emergency.
“For the first time ever in my career I’m seeing stats that indicate this is more than a momentary crisis that will eventually go away and people will go back to normal. I think it’s widely accepted that there will be some kind of new normal,” said Jackman.
JOE JACKMAN
“I’ve been fascinated with that as of course everyone in retail and beyond has as well.”
Jackman said that led to him and his team to do some research. Powerful evidence is suggesting that the changes that are impacting us all are going to have lasting consequences.
“Only four percent of 4,000 consumers that we surveyed said that they aren’t impacted in any meaningful way. I’ve never seen a number like that where 96 percent of a population is saying the same thing. This is profound. Maybe not surprising, but it’s pretty stunning,” explained Jackman.
“Almost 50 percent are saying that the changes are causing them to revisit not only their consumer behaviour, purchasing decisions, and such, and how they buy and who they buy from, but their very beliefs and values.
“What’s emerging is a picture of an entire human race revisiting what’s important. That will have consequences of how we buy and who we buy from.”
In March, about 48 percent of North American adults said they expected to retain the new behaviours because of these shifts and re-examination that’s going on. Three weeks later that number jumped up to about 66 percent, said Jackman.
“That has a very, very significant implication for what the new normal will be. That’s why I say it’s the Great Reset,” he said.
Jackman said retailers have to first accept that there will be a shift, a significant shift, and therefore now is the time to re-examine their place in the world, their strategies, which customers are they focused on and why, what do those customers really care about.
“A deep understanding in the process of resetting your strategy,” he said. “A deep understanding of customers and what they’re experiencing now is really, really fundamental. I think that’s different from what many retail leadership teams are doing which is hunkering down in a crisis, trying to make the best possible decisions, trying to keep their businesses alive, serve their customers sometimes in really scrappy new ways because they’re forced to, and not really thinking so much about the future.
“I totally get the instinct to focus on survival but what’s going to happen very soon is that the world will start to put itself back together again and buying will begin again anew particularly in categories of retail that have been restricted and the customer is going to take this shifted set of values and they’re going to start to behave in different ways and every retailer needs to take this moment and re-examine their most fundamental strategy.”
Jackman said retailers should not delay. They need to take the time and make the time to start asking and answering those really fundamental questions because by doing that they’re going to set themselves up for success and strength coming out of this crisis. If they leave it and try to return to business as usual, the risk is they will be offside with how the world has changed.
One of the key shifts will be the continued trend toward more online shopping. If retailers haven’t already done so, now is the time to double down on digital and direct shopping.
“We’ve now crossed some sort of bridge where the march towards ecommmerce penetration which has been building and building, and mobile platforms helped that climb, I think now we’re coming through a time where all of those people were fence sitters. We’ve just been through the largest single exercise and trial that we could have ever imagined,” said Jackman.
“I was talking to a CEO of a big retailer and he said it’s interesting what percentage of their online traffic is net new to the business – these are people who have never before either bought with them and analysis revealing they had never bought online. So all that trial, the longer it goes particularly, the more comfort, the more confidence and the fact of digital direct delivery, it is easier once you get the hang of it. It’s a lot more efficient and it’s safer. The penetration of ecommerce will continue to climb now and at a higher rate.”
If a retailer is lagging in that, they will have to play some really fast catch up and be as scrappy as possible. If a retailer was on the curve and continuing to invest in the online, now is the time to double and triple down “because we’re not going backwards from this point,” he said.
It’s not just the transactional shift to online and delivery. It’s the importance of engagement and creating an experience beyond just the transactional. To be successful online with direct delivery it’s got to be simple and efficient.
Retention is now the key. Retailers have to not only serve customers but also figure out how to engage and retain them before they go back to their other options.
“The way I think about reinvention is simply not starting from scratch but taking what’s true and special about any particular business and continually adapting it to what’s going on around it and in that continually return to relevance. When a crisis like this comes along, you don’t very often get everybody on the same reboot. Every company now has to fundamentally re-examine the strategic questions – which customers, who are using them, how do you show up, how do you deliver your proposition, what is that proposition, and what experience you’re going to create around that,” said Jackman.
“So I say to companies on a regular basis, if you’ve been successful for a long time without making any changes, the likelihood that you’re going to need to consider reinvention is probably pretty good. It’s pretty high. Never in my career have I said to the entire community of retailers, everyone now is the time to reinvent. Simply because the context at which you go to market has changed so profoundly that you can’t do anything but go back and ask how do we evolve?”
A unique and innovative digital platform has been created to bring online shoppers back to brick and mortar retail stores.
Richard Galczynski, who works in marketing and sales with Near Shop, said the site is building tools to make it easier to find products, and soon services as well, in people’s communities.
“The way we see it, most e-commerce is bad for communities. It extracts wealth from local economies, creates huge amounts of waste from shipping materials, employs fewer of our neighbours, and seldom pays local taxes. These companies give nothing back and the few people they employ are mostly poorly-paid warehouse and delivery workers constantly under threat of being replaced,” he said.
“We gather the products of as many retailers as we can, large and small, and put them in one place so they can easily be found and compared. No need to visit half-a-dozen websites to find the cheapest place to buy a hammer. One simple search checks all the stores in your area so you don’t have to.
“Near has lots of exciting innovations we’re bringing to market in the next few months all with this same goal in mind.”
Matthew Smith, CEO of Near Shop, said the retail industry is in a really strange place right now. There are many negative pressures on brick and mortar stores.
“We’re trying to turn that around a bit. We did pretty extensive research and saw that most people when they’re going online to shop are going either straight to Amazon or know where they’re going straightaway. A small group will search on Google but the ones that do generally get poor results and they’re not satisfied because it’s not a great shopping interface. So they tend to go to a place they know they can find what they’re looking for,” said Smith. “And about 60 percent of the time that’s Amazon.
“So it’s about 40 percent for the retailers to squabble over. And it’s really tough to get your product in front of those 40 percent. If you happen to be well-ranked on Google you’ve got a little better shot. But no retailer can realistically promote their entire catalogue on Google. Our notion is that there’s probably a better way to do this and we think that’s basically a search engine for products. So an interface that’s very similar to what someone shopping online would be used to on Amazon or any other e-commerce site.
“But instead of just having one retailer to choose from or the Amazon marketplace we want to have all the retailers. So you can search for hammers and it will pull up every store within whatever distance you set that have hammers there with pricing and inventory. Then you can choose. You can order online if you want but you can also hop in your car and go to the store. Our goal really is to drive people back to local retailers more easily. To make the process easier and with a little less friction.”
Smith said the company is working on bringing retailers on board who will agree to provide their catalogues.
“The first step is to make this easily accessible to (consumers). The next step of our project is to connect local stores with those online orders in a more easy way. So we’re certainly envisioning something like Uber Eats where you could open an app on your phone, search for the hammer and see all the hammers in your store and then order it and have some guy with his car run over to the store and bring it to your house in an hour or two,” he said.
“It’s delivering the same level of service you can get with an Amazon but still supporting local retailers. We understand that not everyone is going to go back to brick and mortar stores but more than anything we want to keep as much of that money in the local economy as we can instead of sending it to shareholders in Seattle for example.”
Galczynski said people are fed up with the self-isolation imposed by the COVID-19 pandemic and now want to get out and talk to people and experience the shopping, tactile, experience again.
“It eventually will settle down. Things will be a little different. But retailers are adapting,” he said. “Life will go on. We’re just reminding people that your local guys need you now more than ever. Get out there. It’s good therapy for you. It’s good for the economy. It’s good for the local economy.
“Slowly but surely we’ll get out of this. Why stop yourself from indulging in that shopping experience because that’s what it is. On the retailer point, you go online you only purchase one or two items that you’re looking for but if you’re in a store you’re picking up this, you’re picking up that. So it’s really good for everybody.”
An off-schedule podcast discussion with Lynda Murray, the Chief Marketing Officer at ShipperBee. Ms. Murray explains how ShipperBee transforms parcel delivery without changing consumer behaviour while improving or customers business results, customer experience and our environment.
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.
*This story has been updated since its publication date to reflect the confirmed store closures, including all Sportium stores and two SAIL locations.
Quebec-based sporting goods retailer SAIL Outdoors Inc., which operates SAIL and Sportium banners in Canada, filed for bankruptcy protection on Tuesday morning in an effort to restructure operations. The company has struggled financially after weeks of store shutdowns and prior to that, competition from expanding sports-focused retailers such as Decathlon, MEC, Sport Chek, and Sports Experts.
As part of the filing, it was announced Thursday of upcoming liquidation sales and store closures of all Sportium stores, along with two SAIL storefronts located in Vaughan ON and Etobicoke (Toronto). The stores will close after liquidation sales and the e-commerce websites (Sail.ca and Sportium.ca) will continue to operate. “The closure of six [Sportium] stores, which means the end of the Sportium banner, is a heartbreaking but necessary decision that will allow us to keep the most promising SAIL outlets,” said Norman Décarie, President and Chief Executive Officer of SAIL Outdoors Inc.
“For several years now, the retail industry has been undergoing a major transformation characterized, among other things, by an increase in online sales and heightened competition,” said Norman Décarie. “Unfortunately, the consequences of the pandemic, such as the closure of stores for two months, have added further pressure on our cash flow and financial health. This situation is forcing us to make major decisions to ensure the company’s sustainability.”
On Tuesday, the company filed for protection under the Bankruptcy and Insolvency Act. SAIL Outdoors Inc. said that this will allow it to obtain necessary support during the implementation of its restructuring plan. The company hopes to turn around its retail business and restore its financial health.
“This strategic decision is the best way to refocus and put our operations on a more solid footing. Our 100% e-commerce dedicated distribution centre, inaugurated last November, demonstrates our commitment to continue to innovate and evolve the company in line with the market and consumer needs,” said Mr. Décarie.
PHOTO: SAIL OUTDOORS
The company’s total debt exceeds $100 million according to filings, with annual sales for its operations of about $300 million.
SAIL operates 14 standalone large-box stores with eight of those locations in the province of Quebec and six in Ontario. The number will be reduced to 12 when two units shutter. Large-format sports retailer Sportium operates four stores in Quebec cities of Québec City, Saint-Hubert, Laval and Kirkland, all of which will be closing. The restructuring will affect approximately 500 employees and the company promised to offer options for transferring employees to other stores or to their distribution centre which supports their online sales fulfilment.
SAIL was founded in 1981 and its first Sportium superstore opened in 2015.
Retail Insider reported in August of 2018 that SAIL was investing $40 million into the company which saw three new stores, a new warehouse, and 300 employees hired. The company saw its footprint grow to well over 1-million square feet and plans for further expansion were in place.
Then came French sports retailer behemoth Decathlon, which is looking to open stores across Canada as part of a significant expansion. Decathlon, known for its highly experiential big-box stores that some refer to as being the “IKEA of sports stores”, opened its first Canadian store in suburban Montreal in the spring of 2018. Decathlon has since opened more stores in the Montreal and Quebec City markets as well as in southern Ontario. Brokerage and real estate consultancy Oberfeld Snowcap is said to be negotiating leases for more Decathlon locations across Canada.
PHOTOS: SAIL OUTDOORSPHOTOS: SAIL OUTDOORS
Vancouver-based MEC, formerly Mountain Equipment Coop, also expanded its operations across Canada. MEC carries many of the product categories that SAIL and Sportium carry. MEC, which itself has had financial struggles, operates stores in southern Ontario and in suburban Montreal and Quebec as well as across the country.
Sports Experts, a division of FGL sports umbrella which includes Sport Chek, has also been innovating with glossy new store concepts such as flagship stores that have been reported in Retail Insider. That includes an impressive 75,000-square-foot flagship store at Quartier DIX30 which opened in the fall of 2019 as well as a renovated downtown Montreal flagship. In Ontario, Sport Check operates many stores including several experiential flagships that span in excess of 70,000 square feet.
Inside sources say that we can expect more retailers in Canada to file for bankruptcy protection in the coming weeks and month following extended store shutdowns due to COVID-19. Consumer spending in many segments is expected to be sluggish in the months to come and as a result, retail sales for many will continue to suffer. While the sale of sporting goods may see a boost during the summer months, a lack of organized sports may put a further dent in sales at some sporting goods retailers for the foreseeable future.
Woman with protective gloves puts a medical mask on her face as a virus protection in a supermarket parking lot.
The COVID-19 pandemic is changing consumer behaviour and habits being formed today could easily stick for a long period of time.
A recent survey by Accenture, a leading global professional services company, providing a broad range of services in strategy and consulting, interactive, technology and operations, with digital capabilities across all of these services, found that 83 percent of Canadian consumers are limiting the number of times they shop, which has been the biggest change in shopping behaviour.
Kelly Askew, Managing Director, Accenture Strategy in Canada, said the report is indicating that consumer behaviour is changing in Canada in a number of different ways.
“People are saying they expect that those new behaviours are going to continue into the foreseeable future. We think that those behaviours may persist as long as a decade,” said Askew. “The crisis is causing consumers to consider the impact of their shopping choices more closely when it comes to things like health and the environment.
Social distance conceptual small business waiter serving customer in cafe
“The population at large has been highly trained and encouraged to follow social distancing norms. Additionally we’re seeing that people are starting to work from home. A large number of people who haven’t worked from home in the past are saying they will continue to do so after the restrictions are lifted when they never would have considered it before. Further, as the layout and configuration of stores has changed with one-way aisles, plexiglass shields between the customers and the cashiers, I’ve heard many people say that shopping isn’t as pleasant an experience as before.
“Now people are becoming far more purpose-driven in their trips and are getting used to getting in and getting out of the stores as quickly as possible. Some people have made it analogous to what happened to air travel after 9-11. That was quite a while ago and many of the behaviours that existed both driven by the consumer and driven by the providers remain.”
The Accenture survey also found in Canada:
92 percent of consumers are worried about the impact of COVID-19 on the health system;
90 percent are worried about the impact on the economy; and
Only 40 percent of consumers feel more connected to family, friends, neighbours, and the community on average – with the global average sitting at 54 percent.
Globally the survey found:
50 percent of consumers are shopping more health consciously;
45 percent said they are making more sustainable choices when shopping; and
67 percent said they are focusing more on limiting food waste.
Askew said the limiting of the number of times Canadian consumers shop is the biggest behavioral change that has been noticed.
“People are going less frequently to the grocery store while the pandemic is on. They’re getting used to stocking up and shopping for a longer period of time than they would have in the past,” he said.
“Clearly as we’ve looked across the categories I think it’s well-recognized that certain categories have done well in terms of where people are spending their money. Groceries, alcohol, health, and cleaning parts are all doing well. Apparel sales have dropped dramatically. So people aren’t buying clothes. I have some clients that operate outside of Canada and in Europe and what they’re seeing as they’re starting to re-open their stores is an immediate pent-up demand for things like apparel.
“But the question remains, will people just start to think very carefully about how they make purchases? As you look at industries like fashion, the point of view is that they were already past a tipping point in terms of sustainability. So the notion of disposable clothing and buying a different outfit for every occasion has certainly gone out of people’s minds.”
He said that consumers are learning, when the shops are closed, that they don’t in fact need to do the same volume of consumption. They don’t need to spend as much money on things that they may have been doing habitually in the past. People are starting to question those a little bit more.
Globally, the survey found that the pandemic is causing more people to shop for groceries online. In fact, one in five respondents who said their most-recent grocery purchase was done online were first-time online grocery shoppers — for older consumers, this was one in three. And while 32 percent of consumers’ current purchases of all products and services have been online, that figure is expected to rise to 37 percent going forward.
“People who may not have considered grocery shopping a desirable or viable option in the past are discovering that it works. We’re also seeing people telling us about a third of their historical purchases and services have been online. They’re expecting it’s going to rise to about 40 percent,” explained Askew. “That’s a pretty significant increase in such a short period of time.”
He said retailers need to be ready for a very rocky road ahead with talks of additional waves of COVID coming through as well as the ever-present threats of societal or geo-political disruptions.
“The conversations I’m having with my clients are around the need for agility, variability, and sustainability,” said Askew. “By that, agility means they need to get a little bit smaller so that they’re able to nimbly react and pivot when situations change. Variability means they need to be minimizing their fixed cost base. Big assets, large workforces that were static when stores were closed down became quite a liability. In fact, we’ve seen a number of retailers enter bankruptcy protection because they had such an overwhelming fixed cost base they could not cover when sales dropped to something approaching zero for many of them.
“We talk more about sustainability of a business model which is around discipline and making sure that in good times and in bad they have the same kind of discipline around having the most efficient operations as possible.”
He has been described as “the World’s #1 Small Business Guru” and best-selling author Michael Gerber has a mission to transform the state of entrepreneurship worldwide, particularly at this time when so many entrepreneurs have been hit hard by the COVID-19 pandemic.
Gerber, who is the author of the NY Times mega-bestseller, for two consecutive decades, “The E-Myth Revisited” and nine other worldwide best-selling E-Myth books concerning small business entrepreneurship, leadership, and management, is offering small business owners and retailers an opportunity to sign up for a year’s worth of education on his Radical U initiative for $10 (US) – 52 weeks of training, week after week – to discover the mindset of being a successful entrepreneur.
Radical U is an online trade school for individuals who wish to become true entrepreneurs.
MICHAEL GERBER
“If you look at statistics, you’ll see that last year close to 550,000 companies closed their doors. That’s not because of the virus. That’s because of the other virus. That other virus is called stupid,” said Gerber, the author of 29 books and more coming. “That’s because everybody who goes into business does it in exactly the opposite of the way they ought to have done it and as a result they fail, they fail, they fail, they fail. And it’s simply a condition that’s true on every place on the planet.
“The E-Myth addresses that problem and it successfully addressed it so much so that we have created literally an infinite number of successful small companies that have grown from small to tall to beyond belief following a process. I’ve said in E-Myth and every one of my books, the system is the solution. And effectively the E-Myth is the entrepreneurial myth. It essentially says that people who go into business aren’t the entrepreneurs everybody says they are but what I’ve come to call technicians suffering from an entrepreneurial seizure. So they create a job for themselves and now they’re working for a lunatic.”
Gerber, who is based in Carlsbad, California, said 90 per cent of those businesses will be out of business within 10 years. It’s so pervasive because the people who start companies aren’t really the people they need to be. They need to truly be entrepreneurs.
“In my books, I take the entrepreneur personality apart and identify four distinct personalities that are critical for any company to grow to scale,” he said. “And those four personalities I call the dreamer, the thinker, the storyteller and the leader.
“The dreamer has a dream. The thinker has a vision. The storyteller has a purpose. And the leader has a mission. And those aren’t just empty words. They literally mean something and it’s the understanding of what they mean the definition of a dream, of a vision, of a purpose and a mission and the part they play in the creation of a company to grow that is so critically misunderstood. That’s been our work for the past 43 years.”
Radical U is intended to help people learn how to awaken the spirit of entrepreneurship within them in order for them to design, build, launch and grow a company of one and turn it into a company of 1,000. The way to do that is through what Gerber has developed in an eight-fold path, the process that awakens the entrepreneur within.
“In the process of doing that, we believe we will transform economic development worldwide and we’ll transform economic development worldwide because we’ll transform entrepreneurial development worldwide and in the process of transforming entrepreneurial development worldwide we’ll transform the state of small business worldwide, which is our intention and has been our intention since the very beginning.”
The normal cost for a year of training at Radical U is $479.40 (US) and it’s a five-year curriculum.
Gerber said his message particularly in these days of COVID is not only important but life dependent for entrepreneurs.
“What’s very critical for everyone to understand is this is not simply a scheme. This is a system. This system has validated itself now over 43 years of application. We’ve created some of the greatest companies on the planet. A great company as an example is 1 800 Got Junk. A Canadian company which was founded based upon the E-Myth,” said Gerber.
“Entrepreneurs aren’t special folks. Entrepreneurship is not some mystical capability. You can learn how to do it.”
Exterior of Addition Elle Store - Photo by Addition Elle
Leading apparel retailer Reitmans is closing all its women’s Thyme Maternity and Addition Elle stores in the country over the summer as well as chopping its workforce by about 1,100 employees in its retail stores and about 300 employees at its head office in Montreal as part of its restructuring plan under the protection of the Companies’ Creditors Arrangement Act.
The stores scheduled for closure include 77 Addition Elle and 54 Thyme Maternity locations. The company said it is optimizing its retail footprint as it is building its future on its legacy in retail fashion with three premium brands: Reitmans, Penningtons, and RW & CO. These brands will continue to evolve in an omnichannel retail environment with a combined focus on e-commerce and a solid retail network of physical stores in Canada, added the company.
“The strategic decision to close two beloved Canadian fashion brands was not made lightly, but it is necessary to enable our business to move forward as a profitable organization. All of the efforts we put forth to turn these brands around were derailed by the COVID-19 pandemic and, unfortunately, we can no longer afford the required resources to bring them back to profitability,” said Stephen Reitman, President and Chief Executive Officer of Reitmans (Canada) Limited, in a statement.
PHOTO: REITMANS
“The impact on all of our employees is, by far, the most difficult and emotional part of this whole process. We are heartbroken to have to say goodbye to esteemed colleagues and we are truly grateful for their hard work and many contributions to our company over the years. With an enhanced product offering at Penningtons, where women can find aspirational and affordable head-to-toe fashion, we will do everything possible to make our Addition Elle community excited to continue to shop with us. We are committed to the plus-size market in Canada with both a size-inclusive offering at Reitmans, and dedicated expertise and service at Penningtons.
“As we forge ahead with these three flagship Canadian brands, our intention is to write the next chapter of our company’s history for a stronger and brighter future. We take this opportunity to thank our loyal Thyme Maternity and Addition Elle customers for their incredible support, and we look forward to welcoming them in our other stores for years to come.”
The company currently employs approximately 6,800 people and operates 576 stores consisting of 259 Reitmans, 106 Penningtons, 80 RW & CO., 77 Addition Elle, and 54 Thyme Maternity.
In the coming days and weeks, all physical stores of the company will continue to safely reopen based on governmental guidelines, including all 77 Addition Elle and 54 Thyme Maternity stores. For these two brands, the objective will be to liquidate the inventory in anticipation of their permanent closure, which is planned for July 18 for Thyme Maternity and August 15 for Addition Elle, said the retailer, adding that their respective e-commerce websites are expected to shut down on the same date as the closure of the physical stores.
PHOTO: THYME MATERNITY
"I think the consolidation of brands will help the company focus its operations and marketing in the short run and generate much-needed cash as they liquidate. They can become a leaner company by reducing cost and infrastructure,” said Bruce Winder, a retail analyst and President of Bruce Winder Retail.
“Having said that, I still see significant headwinds for the remaining brands based on changing consumer demographics, changing brand preferences and changing ways consumers buy apparel. I like how the firm has highlighted omni-channel as a way forward and look forward to more detailed plans. I feel sad for the employees who will lose their jobs in a brutal retail employment market."
“With 576 stores the impact of the closure of two of its divisions will be felt across the country. Reitmans has such a rich history in Canadian fashion retailing and has been an iconic brand catering to the affordable women’s apparel market for generations. Their sweet spot is the women’s plus-size market that is currently underserved in Canada,” said Kehoe, a veteran of more than 40 years in the industry and broker/owner of Fairfield Commercial Real Estate in Calgary.
“Their focus when they emerge from these troubling times will be clearly in this segment of women’s apparel with a strong e-commerce business along with their repositioned bricks and mortar stores.”
PHOTO: RW&CO
Katherine Chartrand, Director of Corporate Communications at Reitmans, said the company filed for protection under CCAA on May 19 as a necessary measure to ensure the continued success of the business.
“We believe that this decision, as difficult as it may be, remains the only option for moving the organization forward. In this context, we need to optimize our retail footprint, restructure our teams and make important changes to our business,” said Chartrand.
“Closing Addition Elle and Thyme Maternity, two of our beloved brands, is a heartbreaking but necessary decision. They are no longer profitable, and our efforts to turn these brands around were undermined by the COVID-19 pandemic and we can no longer afford the required investments and time to bring them back on the path to profitability.
“We will build our future on Reitmans, Penningtons and RW & CO., successful brands with strong and distinctive positioning that will continue to evolve in an omnichannel retail environment with a combined focus on e-commerce and a solid retail network of physical stores in Canada.”
Chartrand said the company implemented promising strategies in fiscal 2020 that were starting to show positive results in the first quarter of fiscal 2021.
“Unfortunately, all the efforts we put forth to turn these brands around were undermined by the COVID-19 pandemic. The impact of this crisis and the pressure it has put on our cash flows leave us no other choice,” she said.
PHOTO: PENNINGTONS
“For Addition Elle to become profitable, it would have required investments and time that we can no longer afford because of COVID-19. The Thyme Maternity team has done such remarkable work over the years that the brand achieved a market share of over 50 per cent. However, due to the market size and increasing online competition, we have been struggling to make this business profitable. The COVID-19 pandemic was the final straw.
“As for Reitmans, Penningtons, and RW & CO., we will unfortunately have to close some underperforming stores within the rest of our network in the coming weeks and months. This is a part of the restructuring process, but it is too early to confirm the location of these stores. Rest assured our intention is to maintain a solid retail footprint in Canada for these three flagship brands.”
Chartrand said it is difficult to speculate on how consumers will react to the reopening of retail stores in the industry.
“Although, we do expect the COVID-19 pandemic to have an impact on store traffic for the months to come,” she said.
