XS Cargo latest discounter to liquidate
Another warehouse retailer has crumbled in the face of competition from big-box discount rivals.
XS Cargo Co. of Mississauga, Ont. began its final liquidation sale over the weekend and will close its 50 stores in eight provinces across Canada after making a failed bid to restructure this summer.
It follows the demise of Big Lots, which operated 78 stores across the country, including 73 under the Liquidation World banner.
XS Cargo, which carried a similar lineup of goods such as housewares, home decor, home electronics and furniture, filed a notice to restructure under the federal Companies’ Creditors Arrangement Act on July 30, reporting asse ts of approximately $15.8-million and liabilities of $18.7-million. It owed $7.4-million to its unsecured creditors.
In its filing, the retailer’s trustee, PWC, made a pointed reference to Target Corp.’ s entry into Canada, which appears to have pushed XS Cargo to a breaking point as it lowered prices to compete head-on with Walmart Canada.
“During t he past six months, [XS Cargo] experienced a downturn in sales due to the emergence of a large well-known American discount retailer who entered the Canadian market along with increased competition from well-established traditional retailers who have significantly increased their tactical promotional activities,” said the report filed in July in Ontario Superior Court. “Both of these factors contributed to difficulties in the [retailer] executing its turnaround strategy.”
Attempts to revive XS Cargo over this summer — a tough one for smaller Canadian retail chains — failed.
XS Cargo struck an agreement with Boston-based Tiger Capital Group LLC on Sept. 15 to liquidate the stores, and the deal was approved in court on Sept. 19. XS Cargo also operated distribution centres in Mississauga and Edmonton.
Bradley Snyder, executive managing director at Tiger Capital, said sales at the liquidation have been robust.
“We do have merchandise coming in every day,” he said. “We are urging customers to come in for great opportunities because we don’t think the sale term will last very long.”
The Toronto-based owner of the 112 Bowring and Bombay Co. furniture and home decor stores filed for court protection from its creditors last month and it shut down the last of its Benix kitchenware stores. Montreal-based fashion retailer Boutique Jacob filed for creditor protection in May and announced it would liquidate and close its stores, though later received a court extension in a bid to keep some stores open.