Specialty apparel retailer exiting Canada

The retail environment in Canada is proving more challenging than some U.S. retailers had anticipated.



Express said it will close all 17 of its stores in Canada, and discontinue its Canadian operations through its Canadian subsidiary, Express Fashion Apparel Canada Inc. The retailer will continue to operate 635 stores in the United States.



The company said its decision to exit Canada was part of its ongoing strategy to improve profitability and manage and optimize its store footprint. It also cited unfavorable conditions to retail up north.



"The challenging Canadian retail environment, coupled with unfavorable exchange rates prevented us from meeting the expectations we had when we entered the market in 2011,” said David Kornberg, president and CEO, Express. “Our overriding focus remains to invest in and direct our resources towards those areas that can generate the greatest return, including growing our e-commerce business, relaunching our customer loyalty program, and continuing to build our omnichannel capabilities to allow our customers to engage with our brand and shop wherever, whenever, and however they want.”



For the fiscal year ended January 28, 2017, Express Canada had net sales of approximately $34 million (in U.S. dollars) and contributed a net loss of approximately $6 million to Express’ consolidated financial statements.



Express will incur charges of approximately $6 million in the first quarter of 2017 and the remaining $22 million to $28 million of exit costs in the second quarter of 2017 related to its exit from Canada. The company anticipates tax benefits from the move in the range of $14 million to $16 million, of which approximately $7 million is expected in the first quarter of 2017 and the remaining $7 million to $9 million in the second quarter of 2017.



Express Canada currently has 17 stores across Alberta, British Columbia, and Ontario. The retailer intends to conduct store closing sales beginning mid-May.