Swimco chief executive Lori Bacon had a date in mind.
The first day of summer sounded like the perfect time for the head of a Canadian swimsuit retailer to set off on retirement.
But the arrival of COVID-19 changed a lot of plans, including hers.
Instead of retirement, Bacon is working on restructuring the family-run business in a bid to weather its recent insolvency and see better days.
“We’re still here, we’re fighting the good fight,” said Bacon, who sees it as another evolution for the 45-year-old company.
“We’ve been through evolutions in malls. We’ve been through evolutions in our product offering. And this is a very dramatic time frame, but it’s one more evolution.”
Company owes more than $1 million to landlords
For Swimco, like so many other retailers, the impact of the pandemic was swift.
In an affidavit filed with the Court of Queen’s Bench in Calgary, Bacon said that up until mid-March, the company had been operating its retail applications in the “ordinary course.”
But with the pandemic’s arrival and the related emergency health measures, Swimco was forced to close all of its retail locations and temporarily lay off the vast majority of its staff.
A Swimco store located in Calgary’s Southcentre Mall. The retailer has reopened most of the outlets it was operating before the pandemic as authorities have lifted related restrictions. (Tony Seskus/CBC)
From mid-March to late-May, Swimco’s only source of revenue was from its online sales, according to the affidavit. That revenue, however, was insufficient to pay ongoing lease obligations or to service Swimco Group’s long-term debt.
During this period, the company’s landlords were willing to defer lease payments and, eventually, its stores reopened as various governments allowed.
But sales revenues didn’t return to their normal levels and the Swimco Group became unable to meet its payment obligations to various creditors.
When one of its landlords demanded payment by a certain date, the company elected to seek creditor protection to allow it to “reorganize its affairs to better fit with the new retail reality.”
The company estimates approximately $6.5 million in unsecured claims for the Swimco Group, including $1.6 million in landlord rent, according to a court filing in June.
The Calgary-based company notified creditors last month that Swimco Aquatic Supplies Ltd. and Swimco Partnership had each filed a notice of intention to make a proposal, known as an NOI, a procedure under the Bankruptcy and Insolvency Act.
An NOI provides companies that are struggling financially with protection from creditors for up to six months, giving them the opportunity to restructure their financial affairs and avoid bankruptcy.
In Swimco’s case, the company aims to streamline operations, focus on its most successful locations and, ultimately, return to profitability.
It reopened most of the stores it was operating prior to the pandemic, but shut a handful of outlets and cut staff, proceeding with its reorganization plans.
The permanent store closures include three in Ontario — London, Hamilton and Newmarket. Swimco also did not renew its lease on a store in downtown Vancouver.
“We’re looking to restructure our business and come up with a stronger, smaller … company,” Bacon told CBC News. “We see a bright future where our world of travel does resume, even if it is two years away.”
Pandemic hit retailers hard
Many North American retailers are trying to find their footing in a retail environment upended by the economic wallop of COVID-19.
In recent weeks, numerous companies have closed shops. On Thursday, the U.S. parent company of Ann Taylor, Loft and Justice announced it will close all of its clothing stores in Canada.
A strong e-commerce presence that allows stores to “flip the switch” quickly to more online sales will help retailers survive the pandemic, one expert says. (Credit: iStock/Getty Images)
Indeed, many retailers have been hit hard by COVID-19.
Authorities shuttered stores and malls due to the pandemic.Many shoppers have moved online. Even after re-opening, retailers face the added costs of cleaning to meet health guidelines. The future for the sector — like many others during the pandemic — seems uncertain.
“It’s quite a tough time for retailers, as you can imagine,” said Farla Efros, president of HRC Retail Advisory. “It’s not a fun time to be a retailer, unless you’re in groceries.”
Efros said the retailers that are most likely to survive the current shake-up will be those with strong balance sheets and an e-commerce presence that allows them to “flip the switch” quickly to push more into that area. Being nimble to adjust to consumer needs will also be key, she said.
Swimco has long history in Canada
Swimco will be known to many Canadian shoppers.
It started out in 1975 as a home-based, mail-order swimwear business, catering to the needs of swim teams, lifeguards and synchronized swimmers.
In 1980, it began selling fashion swimwear, eventually opening three retail locations in Calgary. Over the years, Swimco added locations in all four western provinces and Ontario.
Up until mid-March, the company operated 25 different retail locations, which employed some 205 full and part-time employees. It is now operating 20 stores, employing more than a hundred people.
The company has also made cuts at its Calgary headquarters and warehouse, reducing its staff of about 45 people by roughly half, said company director Dave Bacon.
Lori Bacon’s hope is Swimco’s relatively small size will allow it to pivot much faster than larger companies, like a “seadoo that can turn quickly.”
Going forward, the plan is to operate with roughly 20 stores, grow its e-commerce business and evolve its product offerings, adding items its customers would want to buy regardless of travel. Integral to the plan, Bacon said, is renegotiating rent with landlords.
In the short term, Dave Bacon said maximizing the swimsuit retailer’s sales over the next six weeks of summer will also be important, adding “this is our Christmas.”
“Everyone in our industry trying to figure this out,” Lori Bacon said of the pandemic’s fallout.
“It’s an emotional and tough time, but we see the light and think, ‘OK, let’s give it a go.'”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
