Jacob women's boutique to close stores across Canada
New retail competition and economy blamed for shutdown
The Canadian women's fashion retailer Jacob is closing its stores across Canada, the Montreal retailer announced in a release.
In the next few weeks, Boutique Jacob Inc. says, it will liquidate the inventory of its 92 Jacob, Jacob Outlet and Jacob Liquidation stores across Canada.
It has filed for a notice of intention under the Bankruptcy and Insolvency Act.
The company has existed for 35 years and employs 1,000 people.
Joey Basmaji, president and founder of Boutique Jacob Inc., said he was "proud of the passion and dedication that the Jacob team showcased … while trying to bring the company back to financial health."
The corporation filed for protection under the Companies' Creditors Arrangement Act in 2010, which allowed for a court-administered process to keep it afloat during financial restructuring.
The retailer was not able to return to profitability, however, citing the arrival of new international competitors and a "difficult economic context."
"I hope that the remaining Canadian retailers will get through these difficult economic times," Basmaji said in a release.
Bleak times for retailers, marketing expert says
Jacques Nantel, a marketing professor at HEC Montréal, called today's announcement "sad news" for the retail industry.
"It confirms that being in the retail industry these days, especially in Canada, is a tough industry to be in. They are not the only retailers going through rough times, and unfortunately, they won’t be the last ones," he said.
Nantel said several factors are leading to bleak times for Canadian retailers, such as a growing e-commerce industry, new players entering the market and higher expenses for Canadian families.
"Household revenues in the last five years went up only two per cent. Most of those spending went to new items, such as telecommunications, computers, cells and, of course, taxes and income taxes — which went up by 10 per cent. So there is way less money left for things like the clothing industry," Nantel said, adding that conventional retailers must find ways to tap into the online market.
"For conventional retailers who didn’t have that capacity to turn their business around, well, it has been rough times and tougher ones to come."