Danier Leather and Le Chateau Canada are Struggling and May Have To Shut Down Stores

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It’s been a rough year for Canadian retailers as many well known store chains have already been forced to close their doors. Now the struggle to stay in business has hit two more fixtures in the Canadian marketplace, Danier Leather and Le Chateau. Both fashion brands are struggling in recent years as faster and cheaper fashion brands surpass them and online retailers continue to take a large chunk of the market share.

Recently, Danier Leather, with 86 Canadian store locations, has hired Consensus Advisory Services, a boutique investment banking and financial advisory firm, to help it explore strategic alternatives after posting yet another steep decline in sales in the last quarter.

Chief executive officer Jeffrey Wortsman has said, “Danier is working on its business and operational strategy with a view to improving its results.” He also adds that, “As publicly disclosed, Danier regularly monitors its stores and under-performing stores may be closed or relocated as leases expire or otherwise as well as look for opportunities for new stores. One of Danier’s strategies is to optimize its real estate.”

Le Chateau on the other hand has repeatedly turned to its founder, director and majority shareholder Herschel Segal’s firm for loans, most recently in June, when it secured $15-million. Le Chateau has been using this money to renovate its stores and bring them in line with their new elevated merchandise offering. However, as of August 2015, Le Chateau will have renovated only 20 of its 219 Canadian stores since it began this process in 2011.

“Note that that is less than 10 per cent of Le Château’s total locations …This fact translates to a disconnect between Le Château’s more upscale/expensive merchandise and the environment of its stores. Not a good situation to be in for a retailer,” according to retail expert Randy Harris of Trendex North America. So far Le Chateau has been forced to close 15 stores in Canada in the past 3 years. As of now there are 219 stores remaining in Canada and 1 in the US.

Stores such as H&M and Zara are the main competition for Le Chateau. Le Chateau can update and carry up to the minute fashion, but chains such as H&M and Zara can restock and get these fashions in store more quickly due to their more robust supply chains. Danier is up against specialty stores such as Rudsak and general retailers such as Hudson’s Bay and Winners, which also sell leather goods. And both stores are losing in the online market when compared to massive online shops such as Amazon, which is set to surpass Macy’s as the largest online apparel retailer in the US by 2017.

So far Danier, in addition to hiring a consulting firm, has expanded their core leather business to include more down, wool, shearling and cashmere alternatives, as well as trying to offer better pricing so that they can compete with other luxury retailers while maintain the same high quality they are known for.

Le Chateau has not released public statements about their situation, so there is no word on how they plan to improve their situation.


8 responses to “Danier Leather and Le Chateau Canada are Struggling and May Have To Shut Down Stores”

  1. JOhn Doe says:

    I think if these two stores dropped there prices a bit maybe they would have more business. I mean Le Chateau for instance sells a dress shirt for like $80, and they don’t even last. Ladies tank tops go for like $60…that’s a little too much.

    • Am says:

      Hi John,
      I agree. I used to shop a lot at Le Chateau when I was younger, but I find the cost and quality is really mismatched in recent years. Hopefully they’ll drop prices or improve the quality to make it worth buying.

  2. Gayle Turner says:

    Was in a Danier store recently and was not impressed with the prices
    are outrageous, and to boot all handbags are cross body straps which I can use due to surgery. Very disappointed and the staff was not very helpful.

  3. Alex says:

    I would be sad to see Danier go and I think Danier is very reasonably priced.. like cmon if you wait for a sale which happens a few times a month you can get your favourite leather purse for $99. I own atleast 5 Danier bags and I’ve had them for many many years.

    Le Chateau on the other hand I wouldn’t miss.. such a rip off for what it is… poor quality clothing in my opinion.

  4. Mel says:

    I was just about to comment a similar response in that I find Le Chateau’s quality to be about the same as H&M now yet they charge way more for their products. If they want to charge higher prices then the quality should reflect that.

  5. Susan hinga says:

    I just bought a platform Jessica Simpson shoes at the Le Chateau outlet in Edmonton on 137 Ave NW. It cost me $65.00 that’s not an outlet price. Bring the prices down a bit. Thanks

  6. A007 says:

    I’m surprised with Danier!! everytime I ask people for leather jacket recommendations they always tell me to check out Danier, I’v browsed their site and I’m currently saving up for a leather jacket, I love their style! I like this store a lot. It’s leather so..I think if you look at other stores Danier is very fairly priced compared to other places. Winners? not even! there’s never anything I like at Winners, that store has gone downhill in my opinion..
    Le Chateau..I’m not surprised, the one at my mall I never see anyone there, the clothes are overpriced, I do own a couple items and a sweater that I have to say is good quality, it’s nice and thick but I bought it over 5 years ago..haven’t bought anything recently because I think their prices went up a lot since then…and who the heck wears a gown on a daily basis..when I see all those gown at the back I just laugh.. their styles of clothing in my opinion are not new at all, yes maybe they have a couple new items but a good 80% is very old style like early 2000’s, it’s the same stuff, cowl necks? wrap dresses/shirts…no no no! I’m seeing a lot of the same style things I did when I was younger and used to shop there. I will not miss Le Chateau..

    I’m just sad that all these stores are going out of business lately….out La Senza closed down without notice too! is La Senza also going out of business…what the heck! where are we supposed to shop!!? I need to try clothes on before I buy them, can’t do everything online, don’t have a credit card because I don’t want to be in debt, prefer paying in cash once and that’s it/no interest on that.

    Future Shop
    Staples
    La Senza(in my area)
    Le Chateau
    Danier
    Target
    and more I’m sure I missed..
    ..now they’re saying Loblaw’s, No Frills!!! I love No Frills!
    why all the reasonably priced food stores going out!? not everyone can afford pricey food…. what is happening..
    half the mall in my area is all mobile telelphones now! not kidding…is this what a mall is going to look like in the next few years?… empty only for mobile telephones! it’s very sad..

  7. missy says:

    Not surprised at Le Chateau. I went in their a few weeks ago to find a dress for a wedding and they were carrying the same styles they were in 2004! The prices were crazy for the quality, and staff is still incredibly unfriendly and unhelpful. Won’t be sad if they leave.
    Danier I am surprised at. I find their stuff to be very well priced in terms of jackets(even on the low side, you can usually find identical jackets that designers sell for 1000+ for the same material) they last forever and the sales are amazing! I have four leather jackets from Danier and the most I’ve paid is $149 on sale, the other 3 were $99. Even H&M and Zara don’t drop the prices on their leather jackets by that much.

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