TORONTO — A victim of competition from Wal-Mart Canada and other price-cutting retailers, Greenberg Stores Ltd., a major Canadian chain, has filed for voluntary bankruptcy and will close 169 stores and put close to 1,400 people out of work.
Greenberg, which operates as MMG of Montreal, says its parent company, Gendis Inc. of Winnipeg, withdrew financial support for the beleaguered chain.
MMG stores operate under the Metropolitan, Met, MetMart, Greenberg and Red Apple/Pomme Rouge banners in small towns and cities across Canada.
The stores range in size from 10,000 to 30,000 square feet and carry a mix of family clothing and hard goods.
At the same time, Gendis said it has acquired the 89 stores from MMG that were profitable and will roll them into its successful 253-outlet SAAN chain of junior department stores.
The move will bring the division to 342 stores with anticipated sales of $280 million (Canadian $400 million) this year.
MMG has debts estimated at $47.7 million (C$64.5 million), of which $39.2 million (C$53 million) is owed to Gendis.
The MMG stores generated sales of $190 million (C$257 million) in 1996, but reported operating losses of approximately $22.2 million (C$30 million) in each of the last two years.
MMG spent about C$40 million two years ago to upgrade stores and change the merchandise mix, with a heavier emphasis on apparel, particularly brand names, to move the chain upmarket. But the strategy didn’t work.
Gendis will take a write-down of $40 million (C$60 million) to cover the cost of the store closings and other expenses related to the restructuring.
Bob Whitney, the former president of MMG and newly appointed president and chief operating officer of SAAN, said heightened competition, a stalled economy and a hesitation on the part of consumers to spend brought about the demise of MMG, which had been a money loser for four years.
“Retailing is overstored in Canada,” he said. “We’re all chasing the same customer.”
Whilke Whitney was reluctant to point the finger specifically at Wal-Mart’s arrival in Canada in 1994, the timing of the company’s slide into the red largely coincides with the Bentonville, Ark.-based discounter’s highly publicized foray into Canada.
Wal-Mart gained a strong foothold here when it acquired 122 Woolco stores.
“If Woolco had died out and not been bought out, things might have been different today for MMG,” Whitney said.
But, he added, competition from the ‘big-box’ retailers such as Canadian Tire Ltd. and Home Depot Inc. have forced everyone to lower prices and find additional ways to cut costs.
Retail analyst Len Kubas of Kubas Consulting Inc. in Toronto said he was surprised by the retreat because parent company Gendis is a well-run, profitable outfit.
“In the last five years, changes in the marketplace in Canada have fostered the most frugal, bargain-conscious consumers anywhere, forcing retailers to lower their prices,” Kubas said.
“And some retailers have been more successful than others in adapting to the new market landscape.”
MMG’s head office in Montreal will close, putting 300 people out of work, and 1,090 full- and part-time sales staff will be let go from the stores.
Last year Gendis, which also owns interests in real estate and oil and gas exploration, earned $67 million (C$95.8 million) on sales of $371 million (C$530 million).

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