- Angela Gonzalez-Rodriguez |
The insolvent fashion retailer will be shutting down all its stores in Canada, so by the end of this week week, 25 locations and 250 jobs will be gone, reported the CBC.
In addition to 1,700 employees at its retail operations, the company has 85 at its head office and distribution centre, which will close in March, announced the apparel group in a note issued earlier this week.
Mexx Canada, a Montreal-based company that operates in eight provinces, filed for bankruptcy protection late last year as it still owes creditors 113.4 million dollars, mostly to related companies Mexx Europe and Lifestyle.
Additionally and like other Canadian fashion retailers, Mexx has faced increased competition from US brands that entered the market.
“Restructuring efforts in Canada and the Netherlands have failed to find a buyer that would keep the retailer open for business, even on a smaller scale,” said in an interview with CBC News bankruptcy trustee Gilles Benchaya of Richter Advisory Group.
Thus, Mexx simply couldn't keep up with multinational fast-fashion retailers like Zara, H&M, Forever 21, and Banana Republic, further explained Benchaya.
“These are multi-million dollar companies that have tremendous leverage with their suppliers, and are able to bring product in at value price-points," said Benchaya. "Mexx is a relatively large player, but in size compared to the Forever 21s and the Zaras, H&Ms, they’re a lot smaller,” he added.
“Some of the Canadian retailers adapted well to the influx of competition," said Benchaya to CBC News. "But a lot of the chains that are 50, 100 stores are going to have challenges to compete against companies that have thousands of stores around the world."