Swim shops try to stay afloat
Bikini Village files for bankruptcy protection, vows stores won’t close
Bikini Village’s filing for creditor protection Tuesday came as no surprise to retail analyst Randy Harris of Trendex North America. He has been highlighting the swimwear specialist’s struggles for at least two years, predicting that it — and others — will go under.
Groupe Bikini Village Inc., headquartered in Ste- Julie on the South Shore, filed for protection Tuesday, but expects to keep all 52 stores, with 400 employees, open as it bids to restructure.
Bikini Village follows Parasuco Retail’s bankruptcy file this month, as well as a string of recent closings, including Jacob, Mexx Canada, Sony Canada and Target Canada.
In the January report from Trendex, Bikini Village total sales were down 1.9 per cent in the third quarter of 2014, after a second quarter drop of 12.8 per cent and 5.3 per cent in the first. Comparable sales were up slightly in the third quarter, however.
Jocelyn Dumas, chairman of the board for Bikini Village, told The Canadian Press the company needs a cash injection to help it reach profitability. The company is $ 6 million in debt and posted a net loss of $ 6.4 million for fiscal 2014, compared with a $ 1.1- million loss the previous year.
PricewaterhouseCoopers has between 30 days and six months to come up with a plan for the firm to repay its creditors.
Harris said the Bikini Village product was fine, but the company’s marketing left a lot to be desired. He wondered why men’s offerings were in the stores, blurring its image.
“It seems like Quebec retailers operate under the assumption that ‘ If we build it, they will come.’ … It does not work that way anymore,’’ Harris said.
“That’s why all of these retailers, especially in Quebec, have got to get out of the mindset — stuck somewhere in the early ’ 90s.”
Bikini Village moved way too slowly on everything, according to Harris — finding a new president, developing a useful transactional website and developing a marketing plan that differentiated its offering.
“You can say the exact same thing about all these Quebec companies that have filed,’’ he said.
As for Parasuco, Harris said, it makes sense that it is keeping its wholesale division, after filing for bankruptcy on its retail division. “It’s a first- class brand name,” he said.
If you are going to go into retail, you have to do it right, Harris said.
He said Reitmans should be commended for having the foresight to shutter its money- losing Smart Set banner, announcing last year it would close 31 stores and convert another 76 stores to other divisions. Citing Le Château, Harris said there are other retailers that should follow Reitmans’ lead in closing unprofitable stores. Le Château’s total sales for the first three quarters last year were down 6.3 per cent, 9.7 per cent and 11.1 per cent.