Laura Canada remains optimistic about future
86-year-old clothier focuses on niche market
TORONTO • Danier Leather Inc.’s recent insolvency filing is only the latest reminder that Canada is a formidable market for its own legacy retailers.
Having spent most of his life in retail, Kalman Fisher is more than aware of those challenges as president of Montreal- based Laura Canada, an 86- year- old familyrun private womenswear company.
Founded by Fisher’s grandmother Laura Wolstein in 1930, Laura Canada emerged from restructuring in December after closing 22 stores and renegotiating agreements with various landlords.
Competition has taken a steep toll in recent years on some of the country’s oldest retailers, many of them based in Montreal. Reitmans Canada Ltd. and Le Chateau Inc. have struggled with weaker sales and closed down unprofitable stores; Comark, the operator of Bootlegger, Ricki’s and Cleo, was acquired last year after it emerged from bankruptcy protection and closed stores, while the veteran family-run retailer Jacob shuttered all but five of its 91 locations.
“Some areas of the market are more competitive than others, particularly the junior space, the younger space,” Fisher said in an interview.
“In a very short period of time, H&M has become very dominant, as has Zara, and to some degree Forever 21. Any retailers competing in that space have to find a way to really, really differentiate themselves from those world-class retailers. We are in a different space, and our setbacks are not a result of any new retailers taking our market share.”
Indeed, Danier’s woes were tied in part to trying to shift its designs to appeal to younger customers, a common stumbling block for retailers who know that the demographic, though highly fickle, shops for clothes more often than mature customers do.
Laura’s critical mistake occurred when it shifted away from the types of styles embraced by its regular customers, the bulk of whom are women over the age of 45 seeking clothes in regular, petite and plus sizes.
“In the fall ( of 2012) and spring of 2013 we made changes in our fabric and in styling that really, really alienated our core customer without attracting new customers. ( Offering) more basic styles in solid colours as opposed to patterns, prints and textured fabrics. It didn’t flatter our customer,” he said.
Despite turning the business around somewhat in 2014, the problems of 2012 and 2013 had done its damage to the company’s balance sheet. The company filed for creditor protection last August, citing close to $124 million in liabilities and $ 72.5 million of assets
But Fisher is optimistic about the future, despite the less- than- stellar effects of a so- called “Super El Niño” winter on the business, which operates 140 stores under banners including Laura and Melanie Lyne, and the competitive environment.
“Business is still good,” Fisher said. “We feel we are very well placed competitively. We do not feel that we are competing against fast fashion. We are serving a niche that we feel is underserved, and we are servicing them well.”
Bruce Winder, partner in Toronto- based Retail Advisors Network, says the next year will be challenging for most Canadian- based fashion retailers as they grapple with a precarious economy, unrelenting global competition and a weak dollar.
“All of these middle- tier Canadian family businesses are getting crushed,” Winder said. “Most clothing retailers buy their products offshore ( in U. S. dollars), so their landed cost of product is going up. And competition has increased a lot, from global folks like H& M, Zara and online ( companies). These global providers run really good shops and they have global buying power — they are a significant volume buyer compared with what a Canadian company can do. They offer trendy fashion at a price others can’t compete with.”
Retailers of who sell outerwear will be the hardest hit, he said, given the unusually mild winter overall. “Up until this point, it has been nothing short of a disaster for these folks.”