Reitmans (Canada) Ltd. will close two of its retail chains and lay off roughly 1,400 workers as the company continues a restructuring amid the pandemic.
Montreal-based Reitmans said Monday that it will shutter its 77 Addition Elle stores on Aug. 15 and 54 Thyme Maternity locations on July 18.
"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," Stephen Reitman, the company's president and chief executive, said in a statement.
"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."
The company will liquidate the brands' merchandise and wind down their websites when the stores will close.
As part of the closures, about 1,100 retail and 300 Montreal head office workers will lose their jobs.
Reitman, who assumed the CEO role in early 2020 following the death of his brother Jeremy Reitman, said he was "heartbroken to have to say goodbye" and grateful for the departing workers' contributions.
The closures follow a move last month by Reitmans to seek court protection from creditors under the Companies' Creditors Arrangement Act and restructure the company.
As part of that plan, the retailer will focus on its three remaining brands — Reitmans, Penningtons and RW & CO.
The company employs about 6,800 people and operates 259 Reitmans, 106 Penningtons and 80 RW & CO. locations.
Bruce Winder, an independent retail analyst, said he thinks the move will keep Reitmans alive for about a year, but said the outlook doesn't seem promising.
"What this will help them do is generate a little bit of cash this summer because when you liquidate stores, you get cash and that is one of the upsides of dumping brands," he said.
However, that won't erase temporary store closures necessitated by the pandemic, changes in consumer buying habits or even the demographic Reitmans has managed to attract.
"I see Reitmans as more of a baby boomer brand," he said. "Millennials are more of the sweet spot for most brands in terms of their biggest demographic to target. I can't really see millennials, at least on the Reitmans brand being overly excited."
The pandemic has hastened some of Reitmans struggles and more of the industry consolidation the retail sector has experienced over the last decade, Winter said.
"Unfortunately they're not one of the ones and when the music stops, I don't think there's a chair for them."
This report by The Canadian Press was first published June 1, 2020
Companies in this story: (TSX:RET.A)
Tara Deschamps, The Canadian Press
