MONTREAL – Laura’s Shoppe Inc. is planning to close five fewer stores than originally planned as landlords at several malls have agreed to cut rents and suppliers have offered significant discounts on clothes for the fall season.
The Montreal-based company will close 15 stores on Sept. 13, according to a court filing in Quebec Superior Court. None of the locations were disclosed.
Seven more store leases are set to expire at year-end.
Laura’s Shoppe, which like many Canadian fashion retailers has struggled amid an influx of large international competitors, filed for creditor protection last month.
Besides the Laura, Laura Petites and Laura Plus brands, the company operates under the Melanie Lyne banner.
The company originally planned to close 20 stores and seek rent reductions on 26 others. It ultimately secured rent reductions for more than 36 locations that will save $5.2 million a year.
Laura’s said the stores being closed contributed less than five per cent of overall revenues and all either generated losses or were marginally profitable.
Meanwhile, Laura’s said it expects to earn some $5 million in extra gross profit from discounts provided by suppliers on about $34.5 million of fall merchandise that went on sale a couple of weeks ago.
An additional $1.2 million in annualized savings are expected from the decision to close or reduce the size of office space at two buildings in Laval, Que., and vacate unused offices in Mississauga, Ont. The move has resulted in the temporary layoff of 93 employees, some of which will become permanent.
Laura’s said it will employ about 2,000 workers in stores across Canada, the distribution centre and remaining office as a results of the changes, down from 2,330 when its network spanned 162 stores.
Laura’s operates in all provinces except Prince Edward Island and also has two e-commerce sites. About half the stores and store-level employees are in Ontario. Quebec has the second-most stores at 37.
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