Laura Canada optimistic about the future after learning from a critical mistake that almost destroyed it

TORONTO – Danier Leather Inc.’s recent insolvency filing is only the latest reminder that Canada is a formidable market for its very own legacy retailers.

How the rise of puffy parkas in Canada led to the downfall of Danier Leather Inc

A balmy winter gave Danier Leather Inc. its final push towards initiating insolvency proceedings last week, but the rising interest in down-filled parkas might have were built with a longer-term submit the retailer’s downfall, based on court filings.

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Having spent most of his life in retail, Kalman Fisher is much more than aware of those challenges as president of Montreal-based Laura Canada, an 86-year-old family-run 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 assorted landlords.

Competition has had a high toll recently on a few of the country’s oldest retailers, most of them located in Montreal. Reitmans and Le Chateau 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 their 91 locations.

“Some areas of the market tend to be more competitive than others, specially the junior space, younger space,” Fisher said within an interview.

We are serving a distinct segment that we feel is underserved, and we’re servicing them well

“In a very short time, H&M has become very dominant, as has Zara, and also to some extent Forever 21. Any retailers competing in that space need to find a method to really, really differentiate themselves from those world-class retailers. We are in a different space, and our setbacks aren’t a result of any new retailers taking our market share.”

Indeed, Danier’s woes were tied in part to attempting to shift its designs to appeal to younger customers, a typical obstacle for retailers who realize that the demographic, though highly fickle, shops for garments more frequently than mature customers do.

Laura’s critical mistake occurred when it shifted from the kinds of styles embraced by its regular customers, the majority of whom are women over the age of 45 seeking clothes in regular, petite and plus sizes.

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“In the autumn (of 2012) and spring of 2013 we made alterations in our fabric and in styling that really, really alienated our core customer without attracting new clients. (Offering) more basic styles in solid colours instead of patterns, prints and textured fabrics. It didn’t flatter our customer,” he said.

Despite turning the business around somewhat in 2014, the issues of 2012 and 2013 had done its harm to the business’s balance sheet. The organization declared creditor protection last August, citing near to $124 million in liabilities and $72.5 million of assets.



But Fisher remains optimistic concerning the future regardless of the under stellar results of a so-called “Super El Nino” winter on the business, which operates 140 stores underneath the banners including Laura and Melanie Lyne, and also the competitive environment.

“Business continues to be good,” Fisher said. “We feel we are perfectly placed competitively. We do not believe that we are competing against fast fashion. We are serving a distinct segment that people 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 because they grapple with a precarious economy, unrelenting global competition along with a weak dollar.

“All of these middle-tier Canadian family based businesses are getting crushed,” Winder said. “Most clothing retailers buy their products offshore (in U.S. dollars), so their landed price of method is going up. And competition has grown a great deal, from global folks like H&M, Zara an internet-based (companies). These global providers run really good shops and they have global buying power – they are a significant volume buyer compared with exactly what a Canadian company can perform. They provide trendy fashion at a price others can’t compete with.”

Retailers who sell outerwear will be the hardest hit, he said, given the unusually mild winter overall. “Up until this time, it has been nothing short of a disaster of these folks.”

Financial Post

hshaw@nationalpost.com

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