Mexx Canada to liquidate stores before closing by end of February
95 stores in Canada to be closed, 25 by the end of this week
Insolvent fashion retailer Mexx is liquidating its 95 stores in Canada by the end of February.
By the end of this week week, 25 locations and 250 jobs will be gone.
In addition to 1,700 employees at its retail operations, the company has 85 at its head office and distribution centre, which will close in March.
Mexx Canada, a Montreal-based company that operates in eight provinces, filed for bankruptcy protection late last year. It owes creditors $113.4 million, mainly to related companies Mexx Europe and Lifestyle.
Restructuring efforts in Canada and the Netherlands have failed to find a buyer that would keep the retailer open for business, even on a smaller scale, says bankruptcy trustee Gilles Benchaya of Richter Advisory Group.
Like other Canadian fashion retailers, Mexx has faced increased competition from U.S. brands that entered the market.
Pressure from global competitors
In an interview with CBC News, Benchaya said Mexx simply couldn't keep up with multinational fast-fashion retailers like Zara, H&M, Forever 21, and Banana Republic.
“These are multi-million dollar companies that have tremendous leverage with their suppliers, and are able to bring product in at value price-points," said Benchaya. "Mexx is a relatively large player, but in size compared to the Forever 21s and the Zaras, H&Ms, they’re a lot smaller.”
Benchaya compared Mexx's financial challenges to those of Jacob, another Canadian retailer which declared bankruptcy last May.
“Some of the Canadian retailers adapted well to the influx of competition," said Benchaya. "But a lot of the chains that are 50, 100 stores are going to have challenges to compete against companies that have thousands of stores around the world."
With files from CBC News