Canadian Retail Shifts: Ricki's and Cleo Closing Amid Financial Woes
The Canadian retail landscape is witnessing significant shifts as major names like Ricki’s and Cleo prepare to shut down operations. These well-known women’s apparel brands, owned by Comark Holdings Inc., have filed for creditor protection under the Companies’ Creditors Arrangement Act. The filing comes with the decision to close all Ricki’s and Cleo locations, marking a substantial contraction in Canada’s retail scene.
Comark, which also owns Bootlegger, operates 221 stores across eight provinces. With this announcement, 75 Ricki’s stores, 54 Cleo locations, and 20 combined sites will be shuttered. The parent company cites challenges from the COVID-19 pandemic, increased competition from ultra-low-cost online retailers like Shein and Temu, and supply chain disruptions as primary reasons for this decision. A ransomware attack in late 2021 further compounded their financial struggles, leaving Comark unable to recover.
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By the end of 2024, the company found itself $61 million in debt to vendors, landlords, and other partners. Court filings reveal that some suppliers have halted merchandise shipments, worsening the situation. While exploring options for its Bootlegger banner, including reducing its footprint, the closure of Ricki’s and Cleo has left over 2,000 employees in Canada facing uncertain futures.
Retail experts point to outdated store experiences and a lack of customer-focused inventory as contributing factors. Liza Amlani of the Retail Strategy Group noted that these brands failed to adapt to evolving consumer preferences, resulting in excessive markdowns and stale assortments.
Similarly, Montreal-based Frank and Oak, under UCG Canada Holdings, is also seeking creditor protection. The company owes $71 million and is restructuring in hopes of attracting investors or a buyer. Like Comark, it blames its financial struggles on the lingering effects of the pandemic.
This series of closures highlights a broader trend in the Canadian retail industry. Consumers now have more options online and offline, driving retailers to innovate or risk obsolescence. While these closures signal significant change, experts like Amlani believe they reflect shifting consumer habits rather than an overall decline in the retail market.
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