The Canadian retail market continues to transform as more store closures announced.

On January 22, two more chains indicated that they will be closing their Canadian locations, another sign of changing times within the retail industry. Schurman Retail Group, the owner of greeting card companies Carlton Cards and Papyrus, is closing all 76 of its retail stores in Canada, along with its 178 locations in the U.S. The Papyrus closures will impact 1,400 employees and will happen over the next four to six weeks, Schurman Retail Group CEO Dominique Schurman told the Financial Post. Freemark Apparel Brands Group, the Canadian company that operates 24 Bench locations in Canada, is also reportedly planning to shut down all their stores.

Michael LeBlanc, senior retail advisor for Retail Council of Canada, said the retail industry has been “transformed,” and individual companies will be changing with it. “There’s not a lot of margin for error or choice,” he said. LeBlanc said some companies may make the decision that a standalone store isn’t strong enough for their brand, and instead focus on working with their partners. This is the case for Carlton Cards, which continues to be sold in other partnering stores, including Shoppers Drug Mart.

LeBlanc also noted that online retail growth has made an impact on sales as well. By most estimates, online sales made up about 10% of all retail sales in Canada in 2019.

But LeBlanc cautioned against panic over multiple store closures at one time. This time of year, he said, is a popular one for companies to announce closures. Many companies will wait until after the holidays to make any final decisions, or to profit as much as they can from the holiday rush before closing for good.

“I don’t think the broader industry is at risk, it isn’t a retail apocalypse,” LeBlanc said. He referenced the 2019 Canadian Shopping Centre Study as proof of this. “In Canadian shopping malls, productivity went up,” LeBlanc said. The study analyzed the top 30 malls across Canada, and calculated productivity based on sales per square foot. Only 9 of the 30 malls saw a decrease in productivity compared to 2018.

While online shopping has created competition for shopping malls, LeBlanc said that the top malls in the study invested “hundreds of millions of dollars” into building up the experience of the shopping centre.

LeBlanc said that on a spectrum with efficiency on one side and experience on the other, online shopping lands on the side of efficiency, and so brick-and-mortar retailers are aiming for an enhanced experience. “Going to a great shopping mall with great retailers, there are a lot of activities going on around you, there are people, there are restaurants,” he said.

Ultimately, LeBlanc said that changes in retail are specific to the company. “There are people exiting stores and opening stores. There are people saying they’re better off just online. And there are people saying they need physical stores to entice customers and articulate their brand.”

Following the Bench closures in Canada, the company plans on focusing on their online business and wholesale customers, Freemark Apparel Brands co-president Lawrence Routtenberg told BNN Bloomberg on January 22.

Source: Financial Post