Roach said on a conference call to discuss the results on Wednesday. She added it is too soon to say when the stores will be able to reopen because provinces are just coming out with their recovery plans for COVID Like other retailers, Roots has seen a bump in e-commerce sales, but not enough to make up for the impact of store closings.
The company changed its distribution model last year in order to manage the fulfilment of its own e-commerce orders, but the transition has driven costs higher, a problem the company is trying to address.
The company has been cutting costs, and after the impact of pandemic-related store closings, Roots has been negotiating rent relief measures with its landlords, chief financial officer Mona Kennedy said on the call on Wednesday. The sales decrease was owing to lower traffic to its bricks-and-mortar stores, while e-commerce growth was not sufficient to offset those declines.
For the full year ended Feb. That was also affected by the impairment charge and other factors, the company said. Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening.
The U. Last year, the retailer as a whole was able to slightly boost its sales with help from a 1. But the company's operating profit fell and it posted a net loss, in part due to a fourth quarter that fell below expectations on "inefficiencies that drove increased costs," interim CEO Meghan Roach said in the release.
The company's newer U. The pandemic has only heightened the company's challenges. With its business on pause, it has temporarily laid off employees at its stores as well as a leather factory in Canada.
The pandemic has made a tough market for apparel and other discretionary retailers even more brutal, as closures eat up liquidity and the prospect of a deep recession and a protracted struggle with the coronavirus leaves many companies with an uncertain financial future.
Crew and True Religion both entered Chapter 11 already citing challenges from the pandemic. Many more are on the edge , with experts predicting coming waves of retail bankruptcies and store closures this year. Follow Ben Unglesbee on Twitter. The digitally native brands that disrupted the industry are entering the next stage in their lives. We look at why they're drawn to one path over another.
As the industry puts behind them, here's a look at some of the players that made notable comebacks this year. Topics covered: retail tech, e-commerce, in-store operations, marketing, and more. Search x. An article from. Dive Brief. Published May 6, The closures also come as a result of an increasingly challenging discretionary retail environment due to the novel coronavirus, said Meghan Roach, interim chief executive officer, during a conference call with analysts Wednesday after the company released its fourth-quarter and full-year financial results.
In order to close the stores quickly and cost effectively, it filed for a Chapter 7 bankruptcy for its American subsidiary, Roots USA Corp. The company's two long-standing American stores in Michigan and Utah will remain open.
These are an important part of the company's heritage and have well-established customer bases, she said. In addition to the two locations, Roots believes online sales in the near term is the best approach to the American market. The news came as the company announced other cost-savings measures to help it navigate the impact of the coronavirus.
The company's focus for this fiscal year was generating cash flow so it had already taken significant steps, she said, but it has made "substantial further reductions. The board of directors is forgoing compensation for three months and senior leadership has temporarily reduced their salaries by 25 per cent, she said. All head office staff salaries have been reduced as well. Roots reduced forward inventory expenses where possible, minimized discretionary spending and stopped capital investments, she said.
It continues to work with partners, suppliers and others to identify additional areas for cost savings. Kennedy declined to provide a dollar figure for cost savings so far when asked by an analyst during the call. In mid-March, the company temporarily closed its retail stores in North America and its leather factory in Canada.
At the time, it temporarily laid off store and factory employees. It is now reviewing potential opportunities to bring those employees back using various government relief programs. Roots shares surged
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