DYLEX REVAMP PLAN WILL SHUT 200 STORES, ELIMINATE 1,800 JOBS
Byline: Miles Socha
TORONTO — Ailing retail giant Dylex Ltd. said Wednesday it plans to close about 200 stores in Canada and eliminate 1,800 jobs or nearly 11 percent of its workforce as part of a massive restructuring. Dylex, one of Canada’s largest fashion retailers with 877 stores and 17,000 employees, filed for court protection from creditors Wednesday. The filing is comparable to a Chapter 11 filing in the U.S.
Although Dylex would not specify which stores will close, chains affected include Fairweather women’s stores, Tip Top Tailors men’s shops, Thriftys for men’s and women’s wear, and BiWay off-price apparel and housewares.
Other units, listed as profitable and not effected by the move, are Braemar women’s wear, Harry Rosen men’s wear, Club Monaco men’s and women’s apparel, and Wet Seal, a 132-unit women’s chain in the U.S.
Dylex said it was forced to seek a court-protected reorganization because of the poor apparel retailing climate, increased taxes, cross-border shopping and media reports concerning its financial woes.
“We intend to proceed with this restructuring on a fast track,” Wilfred Posluns, Dylex chairman and chief executive officer, said in a statement. “We expect that this restructuring process will create a stronger, leaner company, without unprofitable leases and locations, considerably better able to compete on a profitable basis in today’s retailing markets.”
Dylex has lost money in four of the past five years. For the 1994 third quarter, it posted a net loss of Can. $110 million.
Under pressure from U.S. investors to improve operations, Dylex recently made a commitment to shrink its unwieldy 18-member board of directors and appoint more independent directors, wresting control from the Posluns family, a controlling shareholder since the company was founded in 1967.
The Harry Rosen division, fearful that the reorganization would spook vendors, sent them a letter saying it will have “no material effect on us.”
“With one month to go (in the fiscal year), year-to-date sales are up 14.8 percent over last year, we are strongly profitable and all of our vendors and suppliers have been paid right up to date,” the letter said. — Fairchild News Service