In the face of COVID-19 and during a time of mass closures and uncertain futures for most retailers, Ana Gutierrez is launching her new clothing line, La Monarch, despite the current economic climate in Canada.
COVID-19 has forced many retailers to close temporarily or, in some instances, forever, however Ana Gutierrez is not letting the fear of failure prevent her from moving forward with the launch of her versatile fashion line, La Monarch
“There was no point in being scared. It was now or never,” said Gutierrez.
PHOTO: LA MONARCH
Originally set to launch via pop-up shows across the country this spring, Gutierrez was forced to reevaluate her launch schedule once COVID-19 hit. “I wanted to introduce La Monarch to people in person so they could really experience the line but that’s not possible for now. Instead I’ve poured a lot of effort into the website and launching the brand that way.”
Inspired by the monarch butterfly that travels between Mexico and Canada each year, Gutierrez has been slowly cultivating the line of versatile and timeless pieces for almost 10 years. “The monarch butterfly’s ability to adapt and travel resembles my own experience, having spent time living between both countries (Mexico and Canada) from a very young age. Travel has also been an essential part of my life and a key factor to my attention to detail and creative nature.”
The brand is sophisticated and effortless in its design. For spring the line features a mixture of bright and muted colours and airy fabrics. However Gutierrez is already immersed in the development phase for La Monarch’s fall collection, and even the early product development stage for spring 2021.This played a major part in Gutierrez deciding to defy the odds and launch a new brand during a pandemic. The cyclical nature of the fashion industry means things move fast and you can’t afford to miss an opportunity to showcase your current collection.
“I had the spring line ready, so it didn’t make sense to keep the stock hidden. I want to keep going, despite this pandemic, and with the response I’ve gotten from launching online, now I know it has been the right decision to not have let this situation slow me down. Things are much different than what I envisioned, but at the same time I’ve learned how to quickly adapt my business and be resourceful in a way that maybe I would’ve never learned had things gone so smoothly. Now I know I can handle any problem, even very unexpected ones.”
Switching lanes under such inflammatory circumstances is daunting, but Gutierrez notes that it forced her to focus her energy on the digital aspect of La Monarch, something that she says would have ultimately happened but was of secondary importance to selling in person. “My original plan was to launch La Monarch both in person, at popup shows, and online at the same time, however I wasn’t pushing the online aspect of it because I was starting off with limited stock and wanted to preserve what I had for people to purchase in person.” Instead all items are now available online and cultivating that aspect of the brand has been rewarding for Gutierrez, despite the challenges.
Gutierrez notes that she has felt a strong sense of community since starting La Monarch, something that has encouraged her to cultivate hope for the future. “Other small brands are promoting me with little shout outs on Instagram and places like that. I feel like the Canadian retail industry are really coming together and helping each other and there is a sense of support in the Canadian fashion community.”
Each La Monarch piece is carefully designed to accommodate a busy lifestyle. Gutierrez has created a line that can be worn in different ways and for multiple outfit results. With easily button or unbutton side seams, hidden pleats, and reversible blouses, each piece has the ability to create numerous different looks. This is an important aspect of La Monarch’s brand; designing with a “buy now, keep forever’ mentality and creating pieces that will elevate your wardrobe for years to come. The double-sided nature of the brand is also in keeping with the unique influence of Gutierrez’s Mexican and Canadian background.
The business structure also reflects the amalgamation of the two countries as the production team is based in Mexico and the creative and sales team is in Canada. Gutierrez lives between both countries and is involved throughout every process. “My commitment to La Monarch is not only to dress you nicely, but to also build a community and contribute to a better life for all.”
La Monarch is also part of the sustainable fashion movement and is highly aware of the impact the industry has on the environment. As a result, La Monarch collections are kept small, with low stock quantities. Fabrics are sourced from over-stock or in-stock materials at mills, and the entire line is made in Mexico at a family-owned factory with established workshops close to where their employees live. This means less commuting time and less environmental impact. Additionally, La Monarch packaging is compostable - the hangtags, tissue paper, sticker and re-usable mailers are all plant based, and the brand also works closely with a sustainability specialist who ensures eco-friendly steps are taken.
There might never be the perfect time to start your own business, and right now may feel like the worst time imaginable. However, great things often come from bad, and as Gutierrez says “I’ve spent too long being afraid to start my own business. Now I’m ready and in the right state of mind to just go for it, despite what’s currently happening. I’m just taking it day by day.”
COVID-19 has caused a lot of sad losses around the world. The virus is responsible for major disruption to people’s lives and will have a long-lasting effect on worldwide economies.
One of the most significant changes we have seen is in the way people shop for essential and nonessential goods. Retailers can learn from what we have seen so far. Those that continue to make the advancements necessary to improve the customer experience are more likely to maintain a competitive edge.
The Move to Curbside Pickup
Many Canadian retailers have had to shift to curbside pickup to fulfill customers’ orders. They are embracing this method of delivery and seeing huge success since it is the perfect solution in light of social distancing measures.
The question is, will Canadians embrace this kind of omnichannel fulfilment post-COVID-19 now that they have witnessed firsthand the potential time savings that can be realized with an efficient curbside pickup model?
When the social distancing measures are relaxed, assuming no mandated vaccine is available, will Canadians return to the in-store shopping they enjoyed before COVID-19?
I think that we will see curbside pickup, or a variant of this method of delivery, stick around and continue to be improved and refined. Now that people have discovered the advantages of low contact alternatives to shopping, they are unlikely to want to return to their old ways of in-store shopping for quite some time.
There are, however, a few challenges to overcome. We can start by examining the shopping experience.
Online Ordering
Consumers want to be able to click on a website and order what they need without delay or complication. Part of this process is to be able to see, at a glance, what items are available for curbside collection.
Yet, many websites do not have a quick and easy way to filter out products that consumers can collect curbside. Instead, when customers search for what they want, they are presented with lists of products with various ways to access them. Options include: purchase online only, pickup in-store, purchase in-store, or out of stock and not available at all.
The solution is simple. Online retailers need to provide a simple filter to enable customers to search for curbside pickup items.
The Problem With Existing Curbside Pickup
Many Canadian retailers were not ready for the onslaught of curbside orders that hit them when COVID-19 restrictions were phased in. It has been difficult for shipping companies to meet demand in these trying times.
In the absence of a service that matches Amazon Prime next-day delivery, people drive to their store and line up at a makeshift pickup drive-through. The system requires you to pull up in your car to your curbside pickup location, call a phone number to announce your arrival, wait in a line of cars, and when you finally get to the front of the line, you call out your order number to retrieve your item.
Many consumer complaints have arisen against leading Canadian retailers as people post on social media about their poor curbside pickup experience.
Buy Online Pickup in Store (BOPIS)
Canada has been slow to adopt the Buy Online Pickup In Store (BOPIS) concept, and it is a missed opportunity. According to OrderDynamic’s Omni-2000 Research Canada, 31% of Canadian retailers offer BOPIS. This lags behind the global average of 37.6% in countries like the UK, Germany, Australia, Austria, and France.
Had Canada embraced BOPIS earlier, retailers would have been better prepared for the large high demands for curbside pickup in light of COVID-19. For example, Nordstrom NYC on 57th Street, New York, is a leader in BOPIS strategies and has an area on the first floor dedicated to customers collecting their orders.
The Problem With BOPIS
There are other retailers with pickup counters and personnel, but this solution may not be the most efficient during the current health crisis since face-to-face interaction is required. In addition, these BOPIS counters are not usually curbside, and they are limited to the hours they can operate because they are located in-store and are staffed.
The Solution: Smart Parcel Lockers
A more practical approach to BOPIS is to implement automation with smart parcel lockers to keep items safe for collection. Smart lockers can reside inside or outside a store or building, and they take over the management of the order in place of the retailer. The intended recipient is notified by email or text to tell them that there is a delivery waiting for them in the smart locker. Collection can take place at any time, 24/7, and no staff is required to monitor the collection.
The Benefits of Smart Parcel Lockers
Consumer behaviour has demonstrated a desire for fast fulfilment of shopping orders, and smart parcel lockers help to facilitate this.
Retail staff can pick and pack orders anytime; they simply place the orders in a secure locker ready for pickup. The locker then generates a one-time-use pickup code and contactless QR code for the intended recipient, which is sent by text or email. The recipient collects their parcel at a time that is convenient for them.
Smart lockers can also serve as a location for traditional carriers like FedEx, Purolator, and UPS to leave local failed deliveries for customers to collect later. Retailers who open up the lockers to other carriers could benefit from revenue from those carriers. They also enjoy increased foot traffic to their store as customers collect their parcels and potentially make a purchase in-store.
With BOPIS, retailers benefit from sales by bringing consumers in-store. The Harvard Business Review found that stores implementing BOPIS enjoyed 13% more spending in-store. Six months later, customers using BOPIS had visited the store 23% more often and were more likely to recommend the brand than a shop not implementing BOPIS.
There is a better way for consumers to retrieve their deliveries curbside, at a time convenient to them, and without the need for face-to-face interaction or retail staff. It’s time to improve the experience for your customers.
Patrick Armstrong is CEO of Parcel Locker Company Snaile. He’s an accomplished entrepreneur and business leader, and has continued delivering an impressive success portfolio across multiple industries. Since 1999, he has helped to develop and launch five companies which have all enjoyed both acclaim and distinction. His leadership as both CEO, Director of Product Development and Business Strategy directly contributed to these companies’ enduring success stories.
Queen Street West retail stores, photo license via Alamy
Prime Minister Justin Trudeau has announced new measures to support businesses so they can keep their workers on the payroll and weather the COVID-19 (coronavirus) pandemic.
The new bridge loans, not bailouts, are intended for larger businesses to keep them afloat during these challenging economic times.
“We know that times have been tough, and Canadians are concerned about their jobs, and the health and safety of their families. We promised that we would be here to support all Canadians, and that is why we are announcing new measures that will help save middle class jobs, safeguard workers’ benefits, and protect our economy. This will help businesses keep workers on the payroll, and put more Canadians in a position to recover quickly once we make it through these uncertain times,” said Trudeau in a statement.
“Employers, large and small, are facing challenges due to the COVID-19 global pandemic. Our government has their backs. We know that many businesses of all sizes need our help in order to keep their many employees on the payroll and their suppliers paid until the economy recovers. That is why today’s measures will help both large and mid-sized employers to get access to the financing they need to make it through this extraordinarily challenging time,” added Minister of Finance Bill Morneau.
The new measures include:
Establishing a Large Employer Emergency Financing Facility (LEEFF) to provide bridge financing to Canada’s largest employers, whose needs during the pandemic are not being met through conventional financing, in order to keep their operations going. An objective of this is to avoid bankruptcies and help them weather the current economic downturn; and
Expanding the Business Credit Availability Program (BCAP) to mid-sized companies with larger financing needs. Support for mid-market businesses will include loans of up to $60 million per company, and guarantees of up to $80 million.
“It’s generally one of the last pieces of the liquidity puzzle to fall into place. The large companies’ liquidity support was something that was missing in the Canadian package,” said Adam Legge, President of the Business Council of Alberta. “So this is the last piece. It will mean for any of the larger retailers that are struggling this could be an opportunity for them to take advantage of that.
MONTREAL. PHOTO: DEPARTURES
“The other piece being given that retailers offer a direct reflection of the health of the economy overall the more that other companies can take advantage of this and keep people on payroll the greater the consumer spend that will be able to be supported through this broad-based program.
“In the traditional ways of accessing money a lot of them are blocked off right now for companies. So this is that emergency valve for companies that are facing some challenging times that have good potential and good reason to stay viable. It’s something that can help them avoid heading down a path that would leave them without the resources to continue to survive.”
Karl Littler, Senior Vice President, Public Affairs at the Retail Council of Canada, said the federal government announcement is closer to a one-size fits all solution than perhaps the organization might have wanted.
“But to be fair, there’s obviously certain sectors that are similarly distressed even if the circumstances are not identical and obviously they moved to provide something on a broad basis rather than on a retail or rental specific basis,” he said. “They significantly extended the BCAP program for financing of up to $60 million and then they’ve created this LEEF program for entities that are looking for financing at a larger level than that.
“Bill Morneau specifically indicated in his press conference this could go to leases that companies need to pay, different sectors will need funds for different reasons, the retail sector may need this for rent. So obviously he sees this as a significant part of the answer there too.”
SPRING GARDEN ROAD IN HALIFAX. PHOTO: FLICKR
“There’s no question that businesses of all sizes need some kind of support and some of the programs have been oriented more at the small where there may be a need for other instruments, other types of programs for larger companies,” said Dan Kelly, President of the Canadian Federation of Independent Business. “The wage subsidy is the most flexible of them. That’s of relevance to small, medium, and large employers.”
The Canada Emergency Wage Subsidy (CEWS) supports employers that are hardest hit by the pandemic, and protect the jobs Canadians depend on. The subsidy generally covers 75 per cent of an employee’s wages – up to $847 per week – for employers of all sizes and across all sectors who have suffered a drop in gross revenues of at least 15 per cent in March, and 30 per cent in April and May. The program will be in place for a 12-week period, from March 15 to June 6.
Other government programs include the Canada Emergency Business Account (CEBA) which will provide interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced.
WHYTE AVENUE IN EDMONTON. PHOTO: LOOPNET
And there’s also the Canada Emergency Commercial Rent Assistance (CECRA) which will lower rent by 75 percent for small businesses that have been affected by COVID-19. The program will provide forgivable loans to qualifying commercial property owners to cover 50 percent of three monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June.
But critics say the program is a mess, confusing, relies on the voluntary participation of landlords, and has too high a threshold of revenue loss for businesses to apply.
Also on Monday, BDC, the Business Development Bank of Canada, announced it has created the Mid-Market Financing Program to bring liquidity to medium-sized companies particularly impacted by COVID-19 and whose credit needs exceed what is already available through the federal government’s Business Credit Availability Program (BCAP), as well as other measures previously announced by BDC.
“The current situation is putting pressure on all business owners, big and small. With this additional support, medium-sized companies will be able to maintain their staff, preserve supply chains and manage cash flow. We understand it will take time for both the economy and Canada’s businesses to stabilize and this new financing program is designed to serve as a bridge through this crisis,” said Michael Denham, President and CEO of BDC.
BDC said it will make additional credit available to complement businesses’ existing debt facilities, working closely with their primary lenders. The Bank anticipates that qualifying companies will have annual revenues in excess of approximately $100 million. These commercial loans, which will take the form of a junior loan done jointly with the business’ primary lender, will range in size between $12.5 million and $60 million each. To be eligible, companies must have been financially stable and viable prior to the current economic turmoil.
EXAMPLE OF PLEXIGLASS SHIELD AT CAFE COUNTER. PHOTO: PEREGRINE
Vancouver-based Peregrine, a designer and manufacturer of high-end retail and restaurant environments from some of the world’s best-known brands, has pivoted during the COVID-19 (coronavirus) crisis and is now poised for the second wave of plexiglass shield production for businesses.
Brian French, the company’s president, said Peregrine immediately pivoted to make plastic safety shields for various essential businesses and services which did not close during the crisis.
“We are seeing a second wave of demand from retailers, hotels, and restaurants that will be reopening with the easing of restrictions. Based on our research of other parts of the world that are ahead of us, we expect part of their reopening strategy will include plexiglass shields strategically placed to protect staff and customers,” said French.
French said, British Columbian restaurant owners have been in consultation with the B.C. Health Authority on what is important to reopen, this included plexiglass shields.
RENDERINGS: PEREGRINE
“We’re still working on the designs and preparing prototypes to experiment with different heights and locations within restaurants. The tables and the bar seem to be a bit more up in the air, but most locations will have plexiglass shields at the host stations” explained French.
Peregrine, which was founded in 1977, primarily manufactures millwork and fixtures for retailers and restaurants with clients including Joey, Earls, Sage Natural Wellness, and Starbucks among others throughout North America.
“As a result of COVID, we are expecting our two main customer sectors (retail and restaurants) to complete fewer new builds and renovations and we have shifted our business focus towards plexiglass shields in the short-term” said French. French said the company has always done the more traditional, commercial millwork but plastics manufacturing has always been part of the business.
EXAMPLE OF PLEXIGLASS SHIELD AT HOTEL DESK. PHOTO: PEREGRINE
“Previously plastics manufacturing would make up 10 per cent of our business. Now we’re looking to make that more like 30 per cent of our work at least until the restaurants and the retail pick back up,” he added.
“One of the nice things for us being a flexible manufacturer, there’s not really a whole lot of difference in our process. We’re still working with wood. We’re still working with metal. We’re still working with plastics and glass. We’re basically just manufacturing different end products with those same materials. It’s not like we have to re-tool or hire different people. We’re just building something for a different application.”
French said the third wave of response with plexiglass shields are going to be locations such as schools and airports. There has also been demand from offices for shields at the reception areas and shared work spaces.
“Schools are an interesting area. We’ve had some inquiries from large universities in the States. It’s everything from shields in the cafeterias and the reception desks to how do we divide up desks,” he said.
INDOCHINO, a global leader in custom apparel, has launched Virtual Style Consultations where customers can now chat with stylists from their homes.
“We started the brand online and were the first to enable ordering custom apparel online, and easy; choose a fabric, select customizations, create a measurement profile and order. We can even deliver a Tailor Kit of fabric swatches to your doorstep if our customers are having trouble deciding,” Drew Green, the company’s President and CEO, told Retail Insider.
“One thing that our customers love about our award-winning showrooms is the personal consultation with our style guides. With many of our consumers needing to stay home to protect their communities the past two months due to COVID-19 we realized now was an opportunity to launch a unique service that can be accessed from any home in the world.
SCREENSHOT OF INDOCHINO’S WEBSITE
“Virtual consultations offer a way for individuals to connect with our team of talented stylists from our US and Canadian showrooms. They get all the expert guidance of an in-person showroom appointment, without leaving their home. We see VSC becoming a third experience for us to grow and optimize in the months and years to come.”
The company says INDOCHINO stylists from across its 50+ North American showrooms are ready to serve individuals looking for style advice and wardrobe upgrades as well as suiting options for events like weddings and graduations. Each appointment is personalized to each customer, with employees combining their personal style expertise with the brand’s website and visual aids like Pinterest to bring their recommendations to life. They can also walk customers wishing to place an order through INDOCHINO’s online custom shopping experience.
“Scheduling a virtual consultation mirrors the process of booking a showroom appointment. Customers visit the website and, instead of selecting their nearest showroom, they choose their time zone, appointment type and a convenient date and time,” said Green. “They receive a link with instructions and some questions to answer in advance so that the stylist can prepare for the 30-minute video call. Each appointment is personalized for the customer, with employees combining their personal style expertise with visual aids like Pinterest and our online experience to offer insight and bring their recommendations to life.”
CF CHINOOK CENTRE SHOWROOM IN CALGARY. PHOTO: INDOCHINO
Green said INDOCHINO had 50 appointments booked by the end of day one, which exceeded all expectations.
“We plan to make this a permanent fixture in our business, on our website, and our virtual stylists are looking forward to helping customers from all over the world elevate their everyday style, every day. The beauty of virtual means you can access this service from anywhere in the world,” he added.
Green said all operational focus the past eight weeks has been on its online business, launching the Virtual Style Consultation Platform, and preparing to reopen its showroom network.
“Excitingly, we are now opening our showrooms back up in certain markets per the local guidelines. We feel certain that at least nine showrooms will reopen during May, with the rest fast following through June and July,” he said.
WEST EDMONTON MALL SHOWROOM. PHOTO: INDOCHINO
“We are uniquely positioned to become a much bigger and stronger business post COVID-19. We are a digitally native brand and are lucky to have a strong ecommerce business. The renewed focus on our original channel has enabled us to accelerate enhancements and add new features to our website that will improve the overall experience in the long-term. Unlike the vast majority of retailers, we don’t carry any inventory in our stores that needs to be shifted. This means that, although our showrooms are closed, we can be nimble with our product offerings and quickly adapt to changing seasons.
“Many retailers are having to pivot their stores to an appointment-only model in an effort to meet social distancing guidelines. This has been our showroom model since day one so we’ll be ready to serve our customers as soon we’re able to. We have the #1 team in custom apparel, deeply committed to our customers and each other. Customers take on the role of designer, picking out every detail of their garments to make them truly one-of-a-kind. These are made to their precise measurements and shipped directly to their door, hassle free. The company’s omnichannel approach allows them to shop online or in person at any INDOCHINO showroom.”
Green said the world is going through significant change, consumers are increasingly faced with uncertainty and we don’t know yet what the long-term impact will be on the retail sector.
“It’s becoming increasingly apparent that not everyone will survive; and those that do will need to innovate and adapt to a new retail environment — and a new type of customer behaviour. What I firmly believe is that some will come out of this stronger than ever,” he added.
“We were the first to provide customers the ability to shop online for custom apparel and have always put the customer at the heart of everything we do. We opened showrooms when we realized that many enjoyed the in-person experience of our pop-up shops; we have now introduced Virtual Style Consultations to mirror this experience online. We will continue to adapt, continue to deploy consumer centric retail innovation and continue to dream big.”
Update: More than half of Indochino’s showrooms will be open for appointments by the end of May, including almost all of its Canadian locations as follows:
May 21 — Vancouver Yaletown
May 25 — Burnaby Metrotown, West Edmonton Mall and Calgary Chinook Centre
May 29 — Ottawa Rideau Centre, Toronto TD Centre, Toronto Yorkdale and Mississauga Square One
TBD Toronto King St E — currently offering curbside pickup
Army & Navy department store on Whyte Ave, Edmonton - Photo by Google street view
Many retailers in Canada are in turmoil amid store closures due to COVID-19 (coronavirus), and the situation isn’t likely to get much better as stores start to open in parts of the country this spring. Many retailers are in a restructuring phase and some are now examining bankruptcy protection. Some retailers have already announced that they will shutter permanently. This will transform our neighbourhoods and shopping centres for years to come with many retailers and foodservice businesses becoming nothing but a memory.
Vacant storefronts from permanently closed retailers and foodservice providers will create gaps on streets that were once vibrant, and landlords of multi-tenant shopping centre properties may look to redevelopment opportunities. COVID-19 couldn’t have come at a worse time in this country — already, more than 1,000 individual store locations in Canada were set to close forever in the first quarter of 2020 in what was already a challenging time for many retailers. Shifting consumer spending patterns, a rise in online shopping and record-high household debt levels were partly blamed for the downturn.
COVID-19 saw most ‘non-essential’ retailers close in Canada temporarily in March, and the lost sales have put a strain on cash reserves as a result. For at least the first two weeks of store shutdowns, many retailers paid employees which resulted in added expenses at a time of little revenue. At the same time, most landlords have demanded that rents be paid by retail tenants either in full or with government assistance, both of which have created further financial burden for businesses. Adding to this are the crippling debt loads that some retailers are carrying with deadlines for payment — some retailers were in the process of upgrading their units to attract consumers, which means that COVID-19’s arrival was catastrophic for some and as a result, some retailers are already insolvent without brick-and-mortar retail sales.
ARMY & NAVY DEPARTMENT STORE IN EDMONTON IN THE 70S. PHOTO: ROLAND BRESSMER
Some retailers in Canada are already throwing in the towel, and more are expected to follow in the coming weeks and months. On Saturday, Vancouver-based Army & Navy, referring to itself as “Canada’s original discount department store”, announced that it would be permanently closing its five remaining units after 101 years in operation. That includes a large Army & Navy flagship store in downtown Vancouver as well as stores in New Westminster, Langley, Edmonton, and Calgary. Jacqui Cohen, who owns four of the five stores outright, may look to redevelop the sites into new uses.
Other retailers in Canada will also be announcing that they are closing permanently. Also on the weekend, unique Toronto-based variety retailer Lavish & Squalor announced that it was shutting its Queen Street West store after 25 years in operation. Last month, Vancouver-based footwear chain Ronsons announced that it is shutting its 18 stores after 32 years of operations. Many other retailers in Canada are struggling at this time, including major chains. One source Retail Insider interviewed said that some of the retailers looking to file for bankruptcy protection are “household names” and that we should be prepared for some shocking news.
Some of that shocking news arrived last week when Montreal-based footwear retailer Aldo announced that it had filed for and obtained bankruptcy protection in Canada and the United States. Plans are in place to close almost half of the company’s storefronts with a goal to remain operational in the future. Privately held Aldo was already in financial trouble before the COVID-19 store closures. For the 12 months ending February 1, 2020, Aldo lost $74.8 million in Canada and $52.8 million in the United States. The company’s debt stands at $287 million and that’s not including rents owed for April and May of this year — the company failed to pay rents which has also put landlords in a bind.
Other retailers reported to be struggling include Montreal-based fashion retailer Reitmans, which will require a cash injection to remain operational. Some sources have said that the 94 year old chain could end up shutting entirely if things are not sorted out in time. Canada’s largest camera retailer Henry’s announced this month that it wasn’t able to to pay debts owing and that it planned to close several of its stores.
Several major chains are said to be looking to file for bankruptcy protection in the coming weeks and we’ll report on these as they happen. And the filings are expected to be staggered over the coming months, according to Henry Louis who is the Editor-in-Chief of Ontario-based online publication Insolvency Insider. He said in an interview that some retailers will hold off filing for bankruptcy until physical stores are permitted to open so that clearance sales can commence.
Some retailers that do reopen will attempt to grow their brick-and-mortar business in the coming months leading up to the fall of 2020. However, it is expected that consumers will not spend like they once did for a variety of reasons. Some will hesitate to go out in public as much as they did before out of fear of catching the COVID-19 virus. At the same time, many Canadians have lost their jobs which is adding to financial strain. Wealth has been lost due to a declining stock market and incredibly low oil prices. Those that are working may continue to work from home, which means that there may be a decrease in fashion purchases in the coming months. As with other recessions, there is expected to be increased frugality as well as a shift away from conspicuous consumption which could result in a significant hit to some high-end brands, especially those displaying prominent logos.
After attempting to regain sales numbers without success, more retailers in Canada are expected to file for bankruptcy protection in the fall, according to Mr. Louis. This will result in substantially more store closures for the remainder of 2020 and into January of 2021 and beyond. While the December holiday shopping season is typically a robust time for retailers, lower sales could see even more retailers collapse.
Some retailers and foodservice providers also haven’t yet filed for bankruptcy protection due to government support such as wage, loan and rent relief. That has resulted in a situation where businesses can remain a going concern in the short-term until government monies are cut off. To date, government efforts to halt an industry collapse have for the most part been a failure.
At the same time, costs for retailers that do reopen stores are expected to escalate in the coming months. New safety measures and cleaning protocols will be costly at a time when fewer customers might be allowed into a store at one time — if there are any customers at all. Industry expert and recruiter Suzanne Sears, CEO of Retail Staffing Canada and Best Retail Careers International said that she expects retailers will need to pay employees more to work in stores, if retailers are able to secure required staff at all.
SHOPPERS AT CF CARREFOUR LAVAL NEAR MONTREAL BEFORE THE PANDEMIC. PHOTO: CADILLAC FAIRVIEWSHOPPERS AT CF CARREFOUR LAVAL NEAR MONTREAL BEFORE THE PANDEMIC. PHOTO: CADILLAC FAIRVIEW
Other potential challenges include a potential second wave of the COVID-19 pandemic in the fall, which coincides with the annual flu season. This could compound existing problems and scare the consumer for a second time. Given the heightened emotions due to the pandemic as well as constant messaging from governments, medical groups and the media, the fear in many consumers will last for an extended period. At the same time, consumers are becoming more accustomed to shopping online and the habits being formed could become permanent.
Many international retailers are also filing for bankruptcy protection, and some will never survive. This will also have a profound effect on retail in Canada for those brands that have stores in this country. US-based fashion chain J. Crew filed for bankruptcy this month, which could result in its remaining Canadian stores shuttering permanently as well. Other struggling US chains with stores in Canada include Ascena (which operates Ann Taylor and LOFT stores here), L Brands (including Victoria’s Secret), GNC, Gamestop (which operates EB Games in Canada), and others. And even if some international chains are able to restructure their operations, some may choose to close stores in Canada given the high cost of doing business in this country.
Commercial landlords could see mass vacancies across the country as a result. To make matters worse, restaurants and fitness concepts are also struggling. We reported last week that 70% of restaurants in Canada will see a liquidity crisis over the next three months, which will result in many locations closing forever. For those restaurants that do reopen, mandated physical distancing will result in reduced occupancy — given the low margins in the restaurant industry, reduced occupancy will lead to losses that will result in further bankruptcies.
Modern gym interior with equipment. Row of training exercise bikes wheel detail, backlight. Healthy lifestyle concept
The fitness industry will also have to grapple with physical distancing rules. This could particularly affect the boutique fitness concepts that have sprouted up across the country over the past several years. Across the country, fitness concepts had moved into retail spaces formerly occupied by retailers and were seen as a saviour for landlords that had lost retail tenants in the past.
Retailers and malls, for their part, will look to gain consumer confidence through a variety of measures. That includes offering consumers such things as hand sanitizer and masks while implementing expanded cleaning protocols. Limited hours, limited occupancy, spacing configurations for physical distancing, curbside pickup and other measures are hoped to bring consumers back. Many consumers are expected to stay away out of fear of catching the potentially deadly illness regardless.
Malls that have opened already, including the Dallas Galleria in Texas, have remained quiet despite having attempted to gain consumer confidence. In Manitoba, malls such as CF Polo Park in Winnipeg opened last week as well and foot traffic is nothing near where it was though at the same time many retailers have not yet reopened.
Some industry analysts are saying that they expect vacancies in some malls, even the strongest, could surpass 30% by early 2021. What could result is an acceleration of the redevelopment of some mall properties to include housing and other uses. Some mall landlords may consolidate their remaining tenants to reduce the size of retail space and may demolish parts of the property for other uses. A lack of covenant-holding anchor tenants will help speed up the process greatly, resulting in many jobs in the construction and real estate fields.
Landlords owning street-front properties could be in a bind when trying to find new tenants and uses. Many Canadian cities have mandated by law that ground floor space on some streets be for commercial uses. What could result is shuttered storefronts that become unsightly and socially challenging — unless creative solutions can be found. The face of our cities and towns could be much different in the years to come.
There are a few silver linings, however. Entrepreneurs are looking at ways to serve consumers amid a ‘new normal’ and are looking to innovate with new multi-channel concepts. Programs are being announced to help get retailers to shift sales online, and some announcements will soon be made about new artificial intelligence technologies. Chefs of restaurants that have closed are looking to new opportunities in smaller spaces such as food halls. Other entrepreneurs are coming up with ways to financially benefit from the situation with products and services intended to help the industry get back on its feet.
It will be important for everyone to remain strong. This is an unprecedented time and many are struggling. Businesses will need to adapt to a ‘new normal’ in a world that will never be the same as it was. Life will still go on and as Canada is a consumer society, and things will indeed get better in the years to come.
Exterior of CF Polo Park. Photo: Cadillac Fairview
Cadillac Fairview, owner of 19 shopping centres in Canada, says it is not underestimating the importance of a well-thought-out plan as it prepares to reopen its space for non-essential retailers across the country.
“Given these uncertain times, we are focused on providing a high level of safety and comfort while ensuring our community is able to access the goods and services they require,” says the company on its website.
“COVID-19 will likely disrupt our lives for some time, and we’ve adapted our operations to reflect this new normal.”
Cadillac Fairview’s CF Polo Park shopping centre in Winnipeg was the first of its malls to have non-essential retailers reopen on Monday May 4.
CF PACIFIC CENTRE, VANCOUVER. PHOTOS: CADILLAC FAIRVIEW
Sal Iacono, Executive Vice President of Operations at Cadillac Fairview, said non-essential stores will reopen across the shopping centre portfolio dependent on the guidelines set out by each province.
“The occupancy level for the last month generally was less than five percent of all the retail area that we had available to us that was occupied by essential retailers,” he said.
“Effectively the malls looked closed, felt closed, and were closed because 95 percent of the retailers weren’t there. But at no time did Cadillac Fairview actually close the malls. We followed government decrees with regards to non-essential retailers being asked to close.”
Iacono said the company has prepared itself and worked with its clients for when it gets very clear information that it is allowed to reopen shopping centre space for the non-essential retailers.
“And that we do it first and foremost respecting what the local specific health guidelines require us to do,” he said.
“We want to do the right thing first. Secondly we want to inspire confidence both in our clients, our tenants, but also our clients who are shoppers that we are doing everything that we can possibly do to ensure that the experience is a safe and effective one.”
CF FAIRVIEW PARK, KITCHENER, ONTARIO. PHOTOS: CADILLAC FAIRVIEW
Iacono said Cadillac Fairview understands that not all of the retailers will be ready to go from day one.
“We’ll all have to be flexible with regards to what a return to business looks like. For example in Polo Park on Monday, the first day, we had approximately 25 percent of our retailers that opened up on opening day and we expect that by Monday May 11 it will be somewhere around half of all the retailers that we have there. And we expect that over the next week that number will increase from there and so on,” he said.
“We understand it will take some time. We also understand it will take some time for our customers to also start ramping their visits. One thing that we noticed this week is that obviously the people who are coming to shop are purpose driven. There is some pent-up demand that’s going to be exhibited over the next while. People are coming with specific goals in mind and the retailers are preparing themselves in that same fashion. There’s a willingness and a desire to try and get back to some normal level of business and activity but also incredibly mindful to do it in a safe, secure way.”
Cadillac Fairview has developed a template of sorts that will guide its reopening of non-essential retailers across the country:
CF TORONTO EATON CENTRE. PHOTOS: CADILLAC FAIRVIEW
Store operating hours
Initially, it will be offering limited store operating hours. Once reopened it will continue to evaluate store operating hours and update as required but it expects most operating hours to be Monday to Saturday from 11 a.m. to 7 p.m. and Sundays from 11 a.m. to 6 p.m. (to be confirmed locally).
Security
It said protecting employees, visitors, and the general public is of utmost concern. Best practices will be geared toward ensuring a high level of comfort and educating everyone on new protocols, particularly as adapted for individual properties.
Increased cleaning and hygiene practices
Enhanced cleaning practices will continue and there will be clear signage reinforcing the importance of proper handwashing and staying home when ill. Hand sanitizer stations will be located throughout the shopping centre.
If a retail client or CF employee tests positive for COVID-19, or has possibly come in contact with a suspected case, there will be “robust” procedures in place to ensure prompt notification and precautions will be undertaken that could include sending employees home and deep cleaning of impacted areas.
Retail clients will also be urged to have protocols and screening in place to ensure employees who are ill are not coming into work and/or leave in a timely manner.
This will be supported by extensive signage. There will be controlled access to the mall as management monitors the density and number of shoppers in the centre. This could include limiting the number of shoppers in the mall.
The mall will actively manage safe traffic with a number of initiatives including creating one-way traffic in common areas where required, creating clear lanes onto escalators and dividing mall entrances into entry only and exit only doors.
Shopping centre amenities
Guest Services will be open during mall hours. CF SHOP! Cards can be purchased at Guest Services through contactless point of sale.
The CF Lounge for retail employees will be paused until further notice. Nursing rooms will be open but with controlled access and cleaning procedures after each use.
Dining halls will not offer reusable products such as trays, plates, and cutlery. Clients will be asked to use single-use take out supplies only. Seating will either be removed to comply with local guidelines and/or reconfigured to allow for physical distancing. Distancing practices will also be in place for lineups.
Curbside pickup will be offered.
CF Front Door will be an innovative platform helping connect job seekers and retailers with employment opportunities. And the company will be investing in a social media campaign to drive traffic to the platform.
CANVAS has announced the opening of a second store just months after arriving on Ontario’s emerging retail cannabis scene.
Ontario’s first residential cannabis retailer to be solely owned and operated by a woman is expanding in the midst of the COVID-19 shutterings.
“From day one, we focused on building for the future and meeting the growing need for cannabis products within Toronto communities,” said CANVAS Founder Helene Vassos, whose new store, CANVAS Mount Dennis, is located at 1285 Weston Road.
“Our goal has always been to bring a personal touch to the cannabis retail experience,” explained Vassos, whose first store opened in December on the Danforth and has seen exponential month-over-month growth since then.
RENDERING: FORREC DESIGNS
“Our stores are located in beautiful, thriving neighbourhoods that are undergoing major redevelopment, and whose residents are looking for access to a sophisticated and fresh outlook on the cannabis retail experience,” she said “We relish the opportunity to be a part of this growth moving forward and hope to open one or two additional locations before the end of the year.”
The unprecedented global pandemic was not part of CANVAS’ growth plan, however the store is taking every precaution to keep customers safe until Ontario’s restrictions are eased. Like its original location, CANVAS Mount Dennis will adhere to strict COVID-19 preventative measures through online sales and curbside pick-up service only. A protective Plexiglas shield is installed at the front entrance for pick-up orders, and hand sanitizer is provided to every customer. Social distancing is adhered to through visible markers and signage and operational hours have been shortened to 11 a.m. to 7 p.m., with staff wearing masks and gloves.
The new location mirrors the original CANVAS Danforth store with its warm hues, natural elements, and subtle, stylized elegance, including walls and a ceiling enveloped in real moss. It caters to a varied clientele of all ages and carries a wide selection of cannabis products and accessories, including edibles, oils, and topicals.
CLICKTHROUGH MAP OF AREA
“We know our customers by name, we engage with them, and we’ve formed strong relationships,” Vassos said, explaining that her staff is focused on helping customers find the best products for their needs. “It has been a wonderful, positive experience that I look forward to replicating in Mount Dennis.”
Following the success of her first store, the timing was right to expand CANVAS, Vassos explained. She credits her accomplishments in good part to an amazing support team that includes a core group of senior staff and family members, and a business model based on employing full-time permanent staff.
Vassos is leading the way in the industry by helping to establish standards and procedures through ongoing collaboration with government agencies, the Ontario Chamber of Commerce and her colleagues in the retail cannabis industry. She also worked with several vendors on behalf of the industry to facilitate the rapid development of a platform to securely accept online payment for curbside pick-up during the pandemic.
To learn more about CANVAS Mount Dennis and its curated line of cannabis products and accessories, now available for online purchase via CANVAS’s prepaid, ‘Click and Collect’ purchase platform, visit www.canvascannabis.ca.
A new survey from Restaurants Canada says about seven out of 10 restaurants in the country are either very or extremely worried that their business won’t have enough liquidity to pay vendors, rent and other expenses over the next three months.
“Those that were able to remain open for takeout and delivery have demonstrated an exceptional level of responsiveness and innovation while continuing to ensure the health and safety of their staff and everyone they serve,” said Shannon Munro, President and CEO of Restaurants Canada, in an open letter.
“But the creativity and resiliency of our industry won’t be enough to prevent widespread permanent closures as restaurants continue to struggle with insufficient cash flow and insurmountable debt.”
James Rilett, Restaurants Canada Vice President, Central Canada, said the survey found that most foodservice businesses are going to have trouble reopening simply because they don’t have the working capital to reopen.
“Things like buying food, hiring staff back and the things they’ll have to spend money on in the short term to get reopened,” he said.
“In our survey of about two weeks ago, about 10 percent said they didn’t plan on reopening or they were permanently closed. Another 12 percent thought that if this went on for another couple of weeks that they would be permanently close. I would guess at this point it’s between 10 and 20 percent would seriously be considering not reopening.”
The Restaurants Canada survey found that at least one in five independent restaurant operators are dealing with a landlord who is not willing to provide rent relief either through the Canada Emergency Commercial Rent Assistance program or some other arrangement.
Also, 14 percent of independent restaurants haven’t been able to pay rent for April and nearly 20 per cent aren’t able to pay rent for May.
Another consideration, said Rilett, is that restaurants will likely have to hire more staff than usual to take care of all the requirements they will need to adhere to once they reopen. And of course they’ll also have to spend money on restocking their food supply.
“Those are things that are standing in the way of their return to profitability,” he said.
Munro said Canada’s foodservice industry was one of the first sectors impacted by COVID-19, and continues to be one of the hardest hit as 800,000 foodservice workers have been laid off or have had their hours cut down to zero due to the difficult choices that restaurant operators were forced to make. That represents nearly two thirds of the industry’s workforce and double the number of jobs that Canada’s entire economy lost, across all sectors, in the year following the 2008 financial crisis.
She said if conditions don’t improve over the next few months, one out of every two independent restaurants does not expect to survive.
Before the start of the COVID-19 pandemic, Canada’s foodservice sector was a $93 billion industry, directly employing 1.2 million people, providing Canada’s number one source of first jobs and serving 22 million customers across the country every day. The industry is on track to lose as much as $17 billion in sales over the second quarter of 2020 due to the impacts of COVID-19, it said.
In her open letter, Restaurants Canada is urging further action in the following areas where restaurants continue to need support to have a fighting chance at survival:
Commercial tenant protections and rent relief. While the Canada Emergency Commercial Rent Assistance (CECRA) program responds to one of the greatest challenges for restaurants, many will be unable to secure any protection or relief through this mechanism, through no fault of their own. A broader rent relief program is needed to capture businesses that have experienced a significant decline in sales but do not meet the current qualifying threshold, said Munro;
Help with cash flow and rising debt levels. Most restaurants are small and medium-sized businesses that were already operating with razor thin profit margins before COVID-19. With little-to-no sales revenue coming in for most foodservice businesses, many have already depleted their reserve funds, or soon will. Existing measures may need to be expanded and new solutions continue to be welcomed to ensure restaurants will have enough working capital to reopen their doors, added Munro;
Assistance with labour costs. While the federal government’s 75 percent wage subsidy is helping some restaurants keep staff on payroll, those that are now preparing to reopen are concerned about being able to access this support in the months ahead, said Munro. While further provincial assistance is also being sought, the federal government could send a welcomed signal with an extension of the Canada Emergency Wage Subsidy (CEWS) program by a few months.
Go e-commerce, or go bust, says Toronto-based entrepreneur Husan Aripov, co-founder of StylePhotos Canada. As physical stores remain closed in most parts of Canada for now, retailers are rapidly growing e-commerce websites in an effort to reach consumers.
A year ago, Aripov and his brother Khasan founded the company as a pioneer in e-commerce content creation. The goal was to supply the best quality photography available at a very reasonable price.
“Times have changed. Retailers of all sizes are suffering one of the worst macroeconomic shocks in recent history, with a multitude of players closing their doors forever. Who would have thought that the brick and mortar tradition of doing business would suffer so much due to the Canada-wide state of emergency and closure of all non-essential businesses to the public?,” said Husan Aripov.
Retailers across the country are either expanding their online presence or are launching e-commerce for the first time. Online shopping in Canada is said to have more than doubled since March of this year and growth in the channel is expected to continue to grow as many remain wary of venturing outdoors.
Launched in early 2019, Stylephotos.ca began its journey as an in-house photo and video studio for the parent company – OriginalLuxury Inc., shooting luxurious brands such as Philipp Plein, Artioli, Billionaire, and so on. Within a short period of time, the owners (two graduates from the Schulich School of Business at York University) realized that the cost of photography and the average turnaround times in the industry were quite excessive and offered their services to the general public.
Today, StylePhotos Canada offers photo and video services for all players within the e-commerce industry. Covering virtually all product categories, the company currently fulfils product photography and videography requests of such retail giants as Canadian Tire, Puma Canada, Mark’s, National Sports, Gertex, and many more.
“In addition to large retailers who observe this shift towards e-commerce, there is a surge of small local designers and retailers who now can afford to have high quality content thanks to Stylephotos’ Canada pricing strategy and volume approach,” said Husan.
DIFFERENT FORMS OF PHOTOGRAPHY FROM FLAT-LAY, TO 360 VIDEOS, TO LIVE MODELLING SHOOTS. PHOTOS: STYLEPHOTOS
STYLEPHOTOS.CA ECLIPSE SYSTEM FOR SMALLER ITEM PHOTOGRAPHY AND VIDEOGRAPHY, INCLUDING 360 VIDEO CAPABILITY. PHOTO: STYLEPHOTOS
“Currently, StylePhotos offers flat-lay photography, model photography and videography – to create that touch and feel sensation for consumers – , jewelry photography and videography, as well as something entirely new – 3D photography that was introduced in January in Beta stage by Shopify.
“Given the current state of affairs, we can only hope that the COVID-19 pandemic will not put an end to a vast majority of retailers, who are struggling to pay rent, and order collections for their respective stores at the same time. Irrespective of how long it would take for the economy to recover, one can state with confidence that the retail world of today, will be characterized as pre-COVID-19 and post-COVID-19, with significantly higher emphasis on e-commerce presence in the post-COVID-19 era.”
Khasan Aripov said the company is very niche in what it does in the marketplace.
“We are right now the least expensive in terms of the pricing in terms of product photography. We have the quickest turnaround time and we have the highest quality. We managed to achieve this because we have the technology we bought from Europe,” said Khasan.
Khasan said the amount of calls have picked up during the COVID crisis from larger re-sellers who have quite a lot of product and need to get their growing inventory onto the web.
“Everyone has to have e-commerce by now. So now we’re at the stage where a lot of businesses are contacting us just to get their business optimized. The products have to go to the web quickly,” he said.
“We have built an online order guide which should be live very soon. Basically people will be able to go on our website and generate the style guide automatically for their product and then it goes straight to our photographer where they’re going to be shooting the products and they can reproduce exactly what the client is asking. We’re trying to build a more scalable business while making it more standardized and more affordable.”
Khasan said those companies that had a strong e-commerce business leading up to the COVID crisis are not suffering as much as others who have been heavily focused on physical retail.
“A lot of photo studios right now try to milk as much money out of clients as possible. The problem with this is people usually run out of money to actually promote their products,” he said.
“There’s been a drastic switch. We’re getting calls anywhere from people selling tea, which have a small tea shop, to people selling clothing, people who have chocolate companies, a lot of people are calling about face masks and hand sanitizers. The market is changing and I don’t think we’re going to be going back to our daily routine from what I’m seeing.