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Canada’s apparel retailers flounder

Canada’s apparel retailers continue to grapple with a rapidly changing retail environment like fast fashion rivals and e-commerce. Reitmans will close 40 stores this year and Le Chateau will close 18. In 2016 Reitmans shuttered 104 stores, including the entire Smart Set chain (29 locations) and 42 Reitmans stores.

Le Château, meanwhile, is struggling with debt coming due in early June. Material uncertainties may cast doubt on the ability of the company to continue as a going concern.

Signs of progress at Le Chateau in 2016 included a slight increase in comparable store sales and an increase in online sales of 43.6 per cent.

Zara, H&M and Forever 21 have created a new league of competition, and new retailers continue to enter the market including Quebec-based Simon’s and Japan’s Uniqlo.

One challenge is that mall traffic is down at all but the biggest shopping centers. People go to the mall with a single item in mind, go to the store where they know they can buy it, buy the item they need and leave the mall.

Reitman is focused on making the remaining stores more inviting to customers. This year Reitmans will open seven stores and renovate 34. It is looking at ways to expand the wholesale business internationally in plus-size apparel.

There are already signs of improvement. Same store sales increased 7.6 per cent and sales were up 1.6 per cent despite a net reduction of 90 stores over the year. E-commerce sales increased 50.7 per cent.

 
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