Just a few months after opening a new flagship store at the Yorkdale Shopping Centre in Toronto, PLUS, Canada’s luxury streetwear shop, is closing seven of its eight locations, including the flagship, and consolidating all operations to its store at the Square One Shopping Centre in Toronto.
In a statement, Ibrahim Itani, the company’s CEO, said the brand is proudly still operating and servicing its customers at its Square One location and online and that it intends to continue to do so.
“After seven incredible years of building PLUS into Canada’s largest retailer of exclusive sneakers, streetwear, and collectibles, we find ourselves at a turning point. Due to a series of unforeseen circumstances, we have had to close our recently reopened flagship store at Yorkdale. This development, paired with the major global economic downturn created a trickle down effect on our business. As a result we made the difficult decision to close seven of our eight locations, and consolidate all our brick and mortar operations to Square One.
“To everyone who has walked through our doors, shared in our passion, and helped us build this incredible community, thank you. Your support and energy have been the cornerstone of our success. We also want to reinforce what we all know to be true, PLUS has always been more than a store. PLUS is a community of People Like Us, and we are deeply grateful for all the memories we have shared together thus far.
“From our first location in Gastown, Vancouver, to opening locations across the top shopping centres across the country, our journey has always been led by a team that does not shy away from challenges. This new one ahead of us will be no different for our capable team. We are committed to navigating this period and ensuring PLUS continues to serve you better.”
In March, the brand announced it was opening a flagship store at Yorkdale. The company’s first location in Ontario was a temporary store in Yorkdale in 2019. The most recent Yorkdale store was the brand’s largest store of its eight locations in Canada.
One retail industry expert said many retailers were given attractive rent deals during COVID which have likely expired, and profitability is now impossible.
“This segment (streetwear + collectible) boomed during the pandemic, but macroeconomic conditions are causing a pullback,” said the expert.
Graham Heuman, Retail Insights Lead for the J.C. Williams Group, said the concept isn’t particularly proprietary, especially in the GTA where sneaker and streetwear resale shops are abundant.
“Additionally, they face constant competition from major e-commerce players like StockX, Grailed, and GOAT, which likely dominate the market share. These multinational businesses attract a wider audience and the seller likely stands to make more from the sale,” he said. “The value of the products they sell is highly volatile, as they are sold at ‘market value’ and rely heavily on hype. Unlike traditional retail, where pricing at MSRP gives consumers assurance of paying the standard cost, these items are priced based on scarcity rather than quality, price, or value.”
Heuman speculated on two things.
“They may have capitalized on lower retail rents following the pandemic by signing short-term leases. It’s possible that their physical stores served more as marketing tools than anything else. With a robust online store that has lower overhead costs, this could be an integral part of their overall strategy,” he said.
“Inventory may have always been a challenge for them. Relying primarily on a model of buying from the public makes it difficult to maintain eight stores with consistent inventory.”
Bruce Winder, Retail Analyst and Author, said he was saddened to hear about the significant downsizing of PLUS streetwear.
“Without knowing the details of the financial arrangements of the company, one can only speculate that they expanded at a very tough time economically. With consumers cutting back on discretionary purchases, it is not hard to imagine how their assortment of highly priced streetwear and collectibles produced assumed lackluster sales of late,” he said.
“I think the magnitude of the brand’s downsize and the timing of the Yorkdale store closing not long after opening raises questions regarding capital budgeting processes at the company. Hard lessons learned for potential future expansion plans. I wish them well as they navigate these tough times. Hopefully their connection to their core customer remains and allows them to survive until consumer spending on luxury streetwear picks up again.”
Liza Amlani, Principal/Founder, Retail Strategy Group, and Co-Founder, The Merchant Life, discussed the latest developments.
“Although it’s sad to see PLUS close doors, I believe it was inevitable. They scaled too quickly and in a niche category. There is an element of exclusivity and a treasure hunt that comes with selling the latest releases and collectibles. The air of exclusivity can get lost if anyone in a Canadian mall can access the products. PLUS should have had 2-3 stores and carried the rest of their inventory online.”
Doug Stephens, Founder of Retail Prophet, said: “Trading on an old sports adage . . . Timing isn’t everything in fashion. It’s the only thing. And there are many in the fashion editorial space who believe the high-end sneaker and streetwear movements’ time is coming to an end. Even the late streetwear guru Virgil Abloh was saying as early as 2020 that he believed streetwear was approaching its sunset. Couple that reality with the backdrop of economic uncertainty in the Canadian economy and it makes for a pretty toxic mix for high-end streetwear retail.”
George Minakakis, CEO, Inception Retail Group, said even the most well-crafted strategies and admired brands can face unexpected challenges in retail.
“Despite its strong community engagement and reputation for quality, PLUS has found itself at a crucial turning point, perhaps at an end-game juncture. What we are seeing here is the fragility in retail that plagues many in the industry. The growth was not sustainable, and the fault lines were very vulnerable,” he said.
“The economy is being impacted by inflation and higher interest rates, which is impacting consumer spending. Economic instability often leads to tighter budgets, causing consumers to prioritize essential purchases over luxury items like high-end sneakers and streetwear. Consolidating to one location and continuing to operate their online platform tells us consumers are not buying.
“Seven stores in seven years is not overexpansion. Unless you have misread the tea leaves regarding market appeal, revenue expectations can dry up quickly, and blaming the economy is easy but not necessarily accurate. In essence, it is overexpansion with the wrong positioning. Relying too heavily on a niche market is risky. When you look at their assortments, they are selling and competing with large brands that have their own branded shops and sell through many other channels where their products can be purchased. I’ve learned over the years that Vancouver isn’t Toronto anymore than New York is LA. This is a cautionary tale of being overly optimistic that a brand’s vision and merchandising practices can be translated into all consumer markets. It simply isn’t the real world. The more specialized or niche it gets, the riskier the landscape.”
Minakakis said that in his view the brand has run into fiscal challenges, otherwise, you wouldn’t close stores.
“Without more transparent information, it’s difficult to say what the real problem is. However, it is a safe assumption that most of this is revenue-related, as such PLUS cannot keep up with its operating expenses nor able to take share from its established sportswear competitors,” he added.
got some info from their staff that the management team did not give proper 2 weeks notice to them instead of just informing them in the same morning that Plus decide to shut down their store due to some issue with the mall ( the staff believe is mostly RENT issue ) as they notice the business being super slow and not much of the inventory in terms of styles and sizes !! it is totally unfair to those front line staff as they have NO idea what is going beside getting very short notice ( like 2 hrs ) and they all got fired from the company which is not professional at all – msg from Plus Staff