Please Mum, the Vancouver-based national children’s clothing retailer, has closed 68 stores and laid off 750 people after filing for protection under the Bankruptcy and Insolvency Act.
“There has been a massive increase in competition from the U.S. and other countries,” founder and CEO Kathryn Adrian said in an email interview. “This comes as a result of the recession down south. The recession there, and to a degree here, has changed the market’s focus from “˜hand-me-down’ quality to less quality but a lot cheaper prices.”
Please Mum’s ecommerce site, 250 employees and 21 stores remain, including three in Metro Vancouver: the West Broadway, Metropolis at Metrotown and Willowbrook Mall stores.
Young mothers are now seeking fast fashion disposable clothing rather than quality, Adrian said. Long sleeved, screened T-shirts that used to sell two for $20 are now selling two for $10 or $12, and denim pants that used to sell two for $40 are now two for $30 or even two for $20.
Big chains such as Old Navy and H&M are fighting for the bottom of the market, Adrian said. This is particularly evident in children’s wear as young families endeavour to save as much as possible, she said.
At the same time, labour prices and cotton prices are constantly increasing. The multinationals source globally from countries such as Bangladesh and other developing nations, making massive orders of 8,000 to 10,000 units per style.
Adrian said Aritzia and Lululemon have succeeded by putting brand over price and focusing on product first. “I think that’s the key for Canadian companies,” she said.
To compete in this difficult market, “we need to focus on developing brands that are unique,” said Adrian, who is now focusing her efforts on working with her team to make her remaining 21 stores and ecommerce site successful.
“We may have lower sales at first, but if it’s a great product with unique branding, then it will be a global success.”
Retail consultant David Ian Gray of DIG360 Consulting Ltd. said he believes Adrian is employing the right strategy, but said that with 21 stores, Please Mum is now at “a very dangerous size. They are very exposed. They now don’t have the scale, but they are so big they still have management complexity.
“My guess is she is trying to position for a buyout of their remaining locations.”
Making the transition from entrepreneur to professional manager of a major national retailer is a challenging one, he said. “It’s a different skill set. … She had a lot of vision to develop the brand and she had a lot of success. When everything’s going well, you can get away with a lot.”
Under the Bankruptcy and Insolvency Act, the company now has 30 days to restructure its affairs.
Please Mum is selling stock on its website at 50 to 70 per cent off.
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