One year after getting a $15 million loan from its founder, Le Chateau has announced it is closing 14 stores this year.
The Montreal-based retail chain already shut down 11 stores in 2015, and has plans to close 40 more locations in the next three years.
Le Chateau has 211 stores in Canada and four in the Middle East.
In 2015 the chain tweaked its fashion line in an aim to sell clothing to what it called a "more mature" customer, including professionals in their twenties and thirties.
It also remodeled five of its stores in Canada throughout 2015, including the location at Fairview Pointe Claire, though the company did recently close its flagship store on Ste. Catherine St. "
"As Le Chateau has told me repeatedly, you don't need five stores in the downtown area when so many people are shopping online," said theconstantshopper.com founder Eva Friede.
Retail analysts say it's no longer good enough for retailers to do more of what they have been doing in the past and assume it will work.
"The market trends are changing. Consumers are shopping in a different way. To think that shoppers are shopping in the way they did ten years ago is utopic, because that's not the way that business is done now," said Bianca Barbucci.
Le Chateau lost $38.7 million in 2014-15, and this past year it lost $12.8 million.
This is the fifth year in a row the company has lost money and facing financial problems, last year Le Chateau went to the company's founder, Herschel Segal, for a $15 million loan.
Since its founding company in the 1960's Le Chateau has repeatedly gone to Segal for loans, arguing it costs less in interest than going to a bank.
The bright light for the retail chain has been its online sales, which increased about one-third in the past fiscal year, however online sales only account for roughly 10 percent of Le Chateau's income.
"You no longer require that big a footprint when the brand is as close as the phone," said Le Chateau Executive VP Franco Rocci. "You don't have to go out to them, they can now access your brand on the phone anytime."
Multiple retail clothing chains based in Canada have had difficulties in recent years, including HBC, Lulelemon, and Reitmans.
Other brands that have failed in the past two years include Danier Leather, Bovet, Smart Set, Mexx Canada, Jacob, and Parasuco Retail.
Barbucci said that retailers that hope to be successful have to adapt.
"I think it is time to wake up, smell the coffee, and re-evaluate your business and think 'How can I cater my business to the consumer of today."
Multiple retail clothing chains based in Canada have had difficulties in recent years, including HBC, Lulelemon, and Reitmans.
Other brands that have failed in the past two years include Danier Leather, Bovet, Smart Set, Mexx Canada, Jacob, and Parasuco Retail.
"We don't just think product, price, and place of distribution now," said Barbucci. "We also think about the fifth P which is people. How do people shop, how do I create a customer experience that is beyond my product, my price?"
Meanwhile several high-end brands are making moves into Canada, with Nordstrom and Saks opening stores in Canada in 2016 and 2017, while Holt Renfrew and Harry Rosen are planning expansions.
