Specialty apparel retailer Express is shutting down its Canadian subsidiary, Express Canada, as part of its strategic approach to improve profitability and manage and optimize its retail footprint. It announced on Thursday that it intends to shutter all 17 Canadian stores in Alberta, Ontario and British Columbia, and discontinue its Canadian operations beginning mid-May.
The reason being cited is failure of the Canadian subsidiary to meet expectations due to the challenging Canadian environment, coupled with unfavourable exchange rates.
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“While difficult, this action is best for the future of Express and we are committed to carry it out in a way that reflects our respect and appreciation for employees who are impacted,” said David Kornberg, Express President and CEO, adding, “The decision to exit Canada is consistent with our long-term strategy and will have no impact on our operations in the US, which remain in a solid financial position.”
He further maintained that the company remains focused on growing e-commerce, building omni-channel capabilities and relaunching its customer loyalty programme.
In fiscal 2016, Express Canada contributed a US $ 6 million net loss for the company and posted net sales of US $ 34 million. The company also reported a 7 per cent decrease in full year net sales to US $ 2.2 billion.
E-commerce however performed well for the company, increasing by 5 per cent and accounting for 19 per cent of net sales, but this could not offset the decrease in comparable sales, which was driven by challenging mall traffic and retail promotions.
