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'This is not the end:' Slew of closures shows challenges in Canadian retail industry

TORONTO, VILLA CLARA, CANADA - 2015/10/13: Carlton Cards gifts and greeting cards store in Toronto. Carlton Cards founded by Harry Harshman in 1920 is Canadas no. 1 greeting card company. (Photo by Roberto Machado Noa/LightRocket via Getty Images)

2020 is off a rocky start for the Canadian retail industry, with several companies announcing store closures this week due to what is being called a challenging and difficult retail environment.

Several retailers, including Carlton Cards, Papyrus, Bench and Ten Thousand Villages, announced this week that they would shutter store locations across the country. This comes shortly after other companies – including Pier 1 Imports, Bose and Links of London – also unveiled plans to close stores.

Carl Boutet, a retail strategist at Studio Rx, said the slew of announcements show that Canada is not immune to the rapidly changing dynamics seen across the retail industry.

“This is a moment of catchup,” Boutet said in an interview. While Canada is not as overstored as the United States retail market is, he said the rise of e-commerce and changing consumer habits and demographics are making it increasingly difficult to remain competitive in Canada.

“I think the majority of the stores that we saw announce this week were very undifferentiated,” he said.

“These are retail concepts that you could have walked into 20 years ago and they would have looked very similar. They haven’t adjusted to how our lifestyles have changed in those 20 years.”

In total, this week’s announcements means that over 100 stores will close across the country. The factors behind the decision to shutter locations varies.

Ten Thousand Villages, a non-profit organization that sold handcrafted products largely made in the developing world, said Tuesday that it will be closing all of its locations in Canada, a move the group’s executive director Rick Cober Bauman called a “difficult decision.”

“With dramatic changes in the Canadian retail landscape and consumer habits, our retail model is no longer viable,” he said in a statement.

Bench’s Canadian partner Freemark Apparel Brands Group told BNN Bloomberg this week that it will be closing brick-and-mortar stores so the company can focus on its e-commerce and wholesale business. There are currently 24 Bench stores across the country.

Bose, meanwhile, said it will close 119 locations in North America, Europe, Japan and Australia, as more customers go online to purchase its products.

Michael LeBlanc, a senior advisor with the Retail Council of Canada, said that while it’s slightly unusual that the announcements were made within a short span, it is not surprising that they were made following the holiday shopping season.

“Just as there’s a cold and flu season, there’s a season where store closures are announced,” LeBlanc said.

“What this highlights is just how competitive the retail space is and how transformative it is. There’s not much margin for error or room for a concept that isn’t exciting, experiential or not turning out results.”

Boutet warns that consumers should expect more store closures in Canada in the year to come.

“January is always when the bloodletting happens,” he said. “But this is not the end.”

With files from the Canadian Press