Le Chateau to shut 14 stores this year, more closures to come
Montreal-based retailer to shut underperforming stores and focus more on growing online sales
Montreal-based Le Chateau plans to close 14 stores this year and even more in the years ahead as the fashion chain "recalibrates" its brand amid a changing retail environment.
The clothier, which sells both men's and women's garments and accessories, made the announcement in its fourth-quarter results, which include the period up to the end of January.
Sales decreased by 5.3 per cent to $236.9 million last year, the chain said. But both the length of the fiscal year and the number of stores were different compared to the same period in 2014, so a closely watched retail metric known as "same store sales" is a better comparison.
By that metric, sales declined 1.9 per cent last year.
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A bright spot was the chain's beefed up online shopping offerings, where sales rose 34.8 per cent during the year.
The company plans to focus more on that growing part of the business moving forward, while it closes underperforming stores.
As of the end of January, the company had 211 stores across the country, down by 11 compared to a year earlier.
As well as the 14 stores expected to be shut this year, roughly 40 will be shuttered within the next three years, Le Chateau said.
By the time all is said and done, the retailer will have cut almost 200,000 square foot of selling space.
"Our strategy is to continue to recalibrate our retail network and close underperforming stores," the chain said in a release Monday. "Overall, we remain optimistic about the opportunity to grow our business and improve our margins."
The company renovated five urban stores last year and launched a marketing campaign to raise brand awareness, which boosted women's wear and footwear sales.
Industry analyst Jean Rickli of J.C. Williams Group said Le Chateau has been slow in implementing needed changes
"They're struggling," he said in an interview. "I think they are starting to get it now but we find it's late."
On the Toronto Stock Exchange, Le Chateau's shares were up almost 9.1 per cent to 24 cents in morning trading.