The Body Shop store in Victoria’s Hillside Shopping Centre is among 33 Canadian locations being closed as the Body Shop Canada Ltd. seeks to restructure itself under the Bankruptcy and Insolvency Act.
The Canadian subsidiary of the international cosmetics brand announced Friday that it will immediately begin liquidating almost a third of its 105 stores. It is also halting its e-commerce operations.
The company did not say how many workers would lose their jobs as a result of the store closures that span locations in cities including Toronto, Ottawa, Edmonton, Calgary, Saskatoon and Saint John.
Three B.C. locations are among those being closed. The other two are in White Rock (Semiahmoo) and Vernon (Village Green).
A court filing showed the company owes more than $3.3 million to unsecured creditors and about $16,400 to secured creditors.
The company’s U.S. arm has also ceased operations, The Body Shop Canada said Friday.
The moves come weeks after the company’s parent, The Body Shop International Ltd., filed for administration — a process that allows companies to restructure or wind down without paying off its debts — in the U.K.
British media reported Thursday that 75 of the brand’s U.K. stores would close and 40 per cent of its headquarters staff would be laid off.
In Canada, the company wants to keep the bulk of its stores and said in a press release it hopes Ontario court proceedings will give it “breathing room” while it evaluates its strategic alternatives and engages in restructuring.
Efforts to improve the business, which uses an environment-friendly ethos to sell an assortment of bath, body, hair and skincare products, have cropped up as The Body Shop marks 44 years in Canada.
The Canadian division of the retailer has been a steady presence predominantly in malls since its expansion into the country in 1980, but in more recent years has faced several challenges, including the dawn of e-commerce and the growth of beauty brands Sephora, Bath & Body Works and Lush brought intense competition to the sector.
As rivals sprouted up, Lisa Hutcheson, a retail strategist with J.C. Williams Group, saw The Body Shop’s uniqueness erode.
“It really lost its value proposition, and it didn’t change. It just sort of stayed the same,” she said.
“Aside from a few iterations on store design, there wasn’t really ever any innovation, so I think the consumer just started to look to the other brands that were coming along.”
The Body Shop Canada responded in 2022 by opening some stores under a new “workshop” concept that taught customers about sustainability practices, explained who makes their products and what consumers can do to get involved in environmental and community activism.
It also began selling an assortment of products, including its popular body butters, in 25 Shoppers Drug Mart stores last summer with another 25 locations expected to stock the products this year.
The move marked the first time Body Shop products were sold in Canada outside the company’s stores and was meant to make shopping for its merchandise even more convenient.
The Workshop stores and Shoppers partnership preceded the sale of parent company The Body Shop International to European private-equity firm Aurelius Group for £207 million ($355 million) late last year.
Aurelius is known for buying faltering companies it restructures and sometimes resells. Over the last 20 years, it bought British home-shopping channel Ideal World, the Scholl foot-care business and U.K. drugstore chain Lloyds Pharmacy.
In a November press release, Aurelius partner Tristan Nagler positioned The Body Shop purchase as a way to make “operational improvements and re-energize the business and help to deliver the next chapter of success.”
When The Canadian Press asked Aurelius and The Body Shop International in February how The Body Shop’s Canadian operations could be affected by the U.K. administration proceedings, Methuselah Tanyanyiwa of Dentons Global Advisors said both refused to comment. The administration proceedings “only affect the U.K. market and not Canada,” Tanyanyiwa emailed.
FRP Advisory, an accounting firm appointed to handle The Body Shop’s U.K. proceedings, did not respond to repeated requests for comment about the Canadian operations.
The Body Shop was founded by late environment activist Anita Roddick in 1976 to bring consumers beauty and skincare products not tested on animals and developed through fair relationships with farmers and suppliers.
Roddick began with a shop in Brighton, a seaside town south of London. As the company grew its store count, it changed hands several times. It was acquired in 2006 for £207 million ($1.1 billion) by beauty giant L’Oreal, which eventually sold the company to Natura, the Brazil-based owner of Avon, in 2017 for €1 billion ($1.4 billion). Natura sold the firm to Aurelius.
When the Aurelius sale was announced, the firm said The Body Shop had more than 900 company-owned stores in 20 countries and partnerships with head franchisees who operate 1,600 stores in 69 regions.
The Body Shop stores closing in Canada:
Atlantic: Champlain Place (Dieppe, N.B.), Corner Brook Plaza (Corner Brook, Nfld.), Mayflower Mall (Sydney, N.S.), McAllister Place (Saint John, N.B.), Truro Mall (Truro, N.S.)
Ontario: Bayview Village (Toronto), Carlingwood Mall (Ottawa), Cataraqui Town Centre (Kingston), Dufferin Mall (Toronto), Fairview Park Mall (Kitchener), Lambton Mall (Sarnia), Lansdowne Place (Peterborough), Lynden Park Mall (Brantford), Place d’Orleans (Orleans), Queen Street East (Toronto), Rideau Centre (Ottawa), Stone Road Mall (Guelph), The Shops at Don Mills (Toronto), Timmins Square (Timmins), Toronto Pearson Term. 1 (Toronto)
Prairies: Cornwall Centre (Regina, Sask.), Lawson Heights (Saskatoon, Sask.), Lloyd Mall (Lloydminster, Alta.), Londonderry Mall (Edmonton, Alta.), Medicine Hat Mall (Medicine Hat, Alta.), Midtown Plaza (Saskatoon), Park Place (Lethbridge, Alta.), Shoppers Mall (Brandon, Man.), Sunridge Mall (Calgary, Alta.), The Centre (Saskatoon, Sask.)
B.C.: Hillside Shopping Centre (Victoria), Semiahmoo (White Rock), Village Green (Vernon)
— With a file from the Times Colonist
This report by The Canadian Press was first published March 1, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
