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London Drugs closes all of its stores after cyberattack

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Vancouver-based London Drugs has closed all its stores after a weekend cyberattack – the latest Canadian retailer to see its operations disrupted.

The company operates 79 stores, most of them in British Columbia and Alberta, as well as in Saskatchewan and Manitoba. All are closed “until further notice,” spokesperson Jessica Harcombe Fleming wrote in a statement Monday.

London Drugs “was the victim of a cybersecurity incident” on Sunday, according to the statement, and took the step of shutting down its locations “out of an abundance of caution.” The company’s e-commerce site is also unable to fulfill orders for the time being.

However, pharmacists are prepared to assist “any customers with urgent pharmacy needs,” the statement added, advising people to visit their local store if that is the case. (Pharmacists are on-site even though stores are temporarily closed.)

Cyberattacks are a growing concern for businesses across Canada and around the world. Other retailers have lost tens of millions of dollars in sales and costs related to such incidents, including Indigo Books & Music Inc. – which saw its systems knocked offline and sensitive employee data compromised in a hack last March – and Sobeys parent Empire Co. Ltd., which was hit by a breach in November, 2022. As of last month, the grocer was still working with its insurance providers to file claims related to the incident, citing the “complexity” of cyber insurance for the time lag.

“These cyberattacks are a nasty piece of business. I wouldn’t wish them on my worst enemy,” Empire chief executive officer Michael Medline said on a conference call with analysts last year.

Data security is also a concern. Sensitive employee data were compromised in the Indigo hack, and the Liquor Control Board of Ontario disclosed last year that it had experienced data breaches targeting customers’ personal information on two separate occasions.

Hackers who breach a company’s system will frequently demand a ransom to restore access or to return sensitive data. London Drugs spokespeople did not respond to a question about whether a ransom demand was made, but the statement noted that, currently, “we have no reason to believe that customer or employee data has been impacted.”

The retailer has brought in third-party cybersecurity experts to help contain the incident and conduct a forensic investigation. The company’s spokespeople did not respond to a question about whether law enforcement had also been called in to investigate.

“London Drugs is such a careful company – if it can happen to them, it can happen to anybody,” said David Ian Gray, a Vancouver-based consultant to the retail industry. Mr. Gray said he has seen the pace of cyberattacks increase in the past two years, adding that he knows of a number of other retailers that have experienced cybersecurity incidents over that period and never disclosed it publicly.

“This is the most urgent and important area in retail right now,” he said.

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Roots sees room for expansion in activewear, reports $5.2M Q2 loss and sales drop

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TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.

The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.

“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.

The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.

But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.

Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.

“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.

“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”

Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.

The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.

In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.

Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.

The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.

The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.

Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.

Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.

It will also re-evaluate its design ranks.

Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.

Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:ROOT)

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Talks on today over HandyDART strike affecting vulnerable people in Metro Vancouver

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VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.

No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.

About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.

Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.

Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.

A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”

This report by The Canadian Press was first published Sept. 12, 2024.

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Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

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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.

Companies in this story: (TSX:TRZ)

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