Le Chateau sales fall in Q1, strategizes retail network
Canadian apparel retailer Le Chateau reported an 8.6 percent decrease in sales for the first quarter ended April 29, 2017. Sales amounted to $44.4 million as compared with $48.6 million reported for the same period last year.
Comparable store sales decreased 1.5 percent for the first quarter as compared to last year, with comparable regular store sales increasing 0.7 percent and comparable outlet store sales decreasing 9.9 percent.
Net loss for the first quarter amounted to $12.9 million.
The company has been strategizing to recalibrate its retail network by closing underperforming stores and further strengthen its rapidly growing e-commerce platform.
Online sales for the first quarter, included in comparable store sales, continued to climb by 22 percent.
The fashion retailer closed 26 stores last year and currently still has 180 stores (including 50 fashion outlet stores) in operation. In 2017, the company plans to close approximately 18 more stores.
The company is now heavily betting on its online business and opened a new e-commerce warehouse and distribution facility at the end of September in order to better serve customers.
Still, as the retailer continues to see consecutive yearly losses, the company has been continuously turning to its founder Herschel Segal for financing.
“The renewal of the credit facility, a new term loan and the exchange of a portion of the loan from a company controlled by a director of Le Château, into First Preferred Shares are expected to provide Le Château with the financial flexibility to complete its strategy of right-sizing its retail network of stores,” the company said, in a news statement.
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