Liquidation World closing U.S. operations
Calgary-based Liquidation World is winding down itsmoney-losing U.S. operations over the next few months, the company announced Friday.
The companysaid it's taken several steps to stem the red ink but nothing has worked, so it's decided to close 16 of its 18 U.S. stores and turn the other two into distribution centres for merchandise that can't be disposed of any other way.
Its U.S. operations have been money losers for the last five years, it said. So farthis year, lossesat Liquidation World USA are approaching $2 million.
It will keep a presence in the U.S. to buy merchandise for its substantial Canadian operations.Liquidation World is Canada's largest liquidator of consumer merchandise from troubled companies, with 100 stores inCanada.
"Our initial entry into the U.S. market was premised on a strategy that a retail presence in the U.S. market was necessary for the development of important supply relationships," Liquidation World CEO Jonathan Hill said in a statement. "The company is now in a position where its supply relationships are independent of its U.S. retail presence."
Hill also saidthe company's U.S. retail storesended up competing with its Canadian operations fordesirable inventorysourced in the United States. He said that merchandise would be more profitably sold in Canada.
"We believe that directing merchandise from the U.S. operations to Canada will ultimately facilitate overall revenue growth and profitability."
Earlier this month, the company announced a $2.9 million third-quarter loss. The chief financial officer resigned.
Liquidation World shares were down eight cents to $3.07 in afternoon TSX trading, well off their 52-week high of $7.45.