Just after a month of Coldwater Creek Inc. going bankrupt in the US, Canadian fashion retailer Boutique Jacob Inc. has announced the closure of all of its 92 stores due to financial constraints. The Montreal-based company will liquidate its remaining inventory in the coming weeks after filing a notice of intention to make a proposal to its creditors under the Bankruptcy and Insolvency Act. But this time Indian exporters were lucky as industry insiders confirm that Boutique Jacob Inc. was currently not sourcing much from India and those who were working for the retailer had mostly stopped operations about a year ago when payments became a problem.
The retailer has been under creditor protection since November 2010 and underwent a major revamping, closing more than a third of its stores since then. However, the retailer was unable to make the business profitable or find new inanciers. An importing company Casa Bawa Fashion based out of Montreal, whose representative visit India regularly and source from Delhi-NCR and Jaipur confirmed that Indian exporters will not be affected. “Earlier we were dealing with Boutique Jacob Inc. regularly but as its condition started to deteriorate and payments were also not as it used to be, we stopped doing business with them a few years ago. To the best of my knowledge, Boutique Jacob Inc. was not sourcing much from India in the last few years,” said Gulam Bawa in conversation with Apparel Online.
Among the factors leading to the company’s inability to overcome financial difficulties, the company cited the challenging economy and “international competitors who quickly stole market share” from Canadian retailers.
While the Indian exporters were not affected, the closing of Boutique Jacob Inc. has created a little worry for the health of Canadian Retail in general. “Jacob, could be the first of a string of ailing retailers to close their stores, leaving landlords with a potential glut of liquidated outlets especially in less popular malls,” warn industry observers.
Since 2009, retailers’ mall productivity as measured in sales per square foot rose 24 per cent to US $ 475 in 2013 in the United States but picked up at just half that rate in Canada, by 12.2 per cent, to $ 627 (Canadian) over the same period, according to data from real estate firm Cushman & Wakefield. Other domestic retailers, including fashion chains Le Château Inc., Reitmans (Canada) Ltd. and Danier Leather Inc., also are feeling a pinch. Some US chains are finding it rough there as well. It is also being said that Aeropostale Inc. is closing 27 stores in Canada amid falling sale.
