*This story has been updated since its publication date to reflect the confirmed store closures, including all Sportium stores and two SAIL locations.
Quebec-based sporting goods retailer SAIL Outdoors Inc., which operates SAIL and Sportium banners in Canada, filed for bankruptcy protection on Tuesday morning in an effort to restructure operations. The company has struggled financially after weeks of store shutdowns and prior to that, competition from expanding sports-focused retailers such as Decathlon, MEC, Sport Chek, and Sports Experts.
As part of the filing, it was announced Thursday of upcoming liquidation sales and store closures of all Sportium stores, along with two SAIL storefronts located in Vaughan ON and Etobicoke (Toronto). The stores will close after liquidation sales and the e-commerce websites (Sail.ca and Sportium.ca) will continue to operate. “The closure of six [Sportium] stores, which means the end of the Sportium banner, is a heartbreaking but necessary decision that will allow us to keep the most promising SAIL outlets,” said Norman Décarie, President and Chief Executive Officer of SAIL Outdoors Inc.
“For several years now, the retail industry has been undergoing a major transformation characterized, among other things, by an increase in online sales and heightened competition,” said Norman Décarie. “Unfortunately, the consequences of the pandemic, such as the closure of stores for two months, have added further pressure on our cash flow and financial health. This situation is forcing us to make major decisions to ensure the company’s sustainability.”
On Tuesday, the company filed for protection under the Bankruptcy and Insolvency Act. SAIL Outdoors Inc. said that this will allow it to obtain necessary support during the implementation of its restructuring plan. The company hopes to turn around its retail business and restore its financial health.
“This strategic decision is the best way to refocus and put our operations on a more solid footing. Our 100% e-commerce dedicated distribution centre, inaugurated last November, demonstrates our commitment to continue to innovate and evolve the company in line with the market and consumer needs,” said Mr. Décarie.
The company’s total debt exceeds $100 million according to filings, with annual sales for its operations of about $300 million.
SAIL operates 14 standalone large-box stores with eight of those locations in the province of Quebec and six in Ontario. The number will be reduced to 12 when two units shutter. Large-format sports retailer Sportium operates four stores in Quebec cities of Québec City, Saint-Hubert, Laval and Kirkland, all of which will be closing. The restructuring will affect approximately 500 employees and the company promised to offer options for transferring employees to other stores or to their distribution centre which supports their online sales fulfilment.
SAIL was founded in 1981 and its first Sportium superstore opened in 2015.
Retail Insider reported in August of 2018 that SAIL was investing $40 million into the company which saw three new stores, a new warehouse, and 300 employees hired. The company saw its footprint grow to well over 1-million square feet and plans for further expansion were in place.
In 2017, we reported that Sportium had opened its third store spanning 70,000 square feet in the Montreal suburb of Laval, and that there were plans in place to open five or six more stores under the banner.
Then came French sports retailer behemoth Decathlon, which is looking to open stores across Canada as part of a significant expansion. Decathlon, known for its highly experiential big-box stores that some refer to as being the “IKEA of sports stores”, opened its first Canadian store in suburban Montreal in the spring of 2018. Decathlon has since opened more stores in the Montreal and Quebec City markets as well as in southern Ontario. Brokerage and real estate consultancy Oberfeld Snowcap is said to be negotiating leases for more Decathlon locations across Canada.
Vancouver-based MEC, formerly Mountain Equipment Coop, also expanded its operations across Canada. MEC carries many of the product categories that SAIL and Sportium carry. MEC, which itself has had financial struggles, operates stores in southern Ontario and in suburban Montreal and Quebec as well as across the country.
Sports Experts, a division of FGL sports umbrella which includes Sport Chek, has also been innovating with glossy new store concepts such as flagship stores that have been reported in Retail Insider. That includes an impressive 75,000-square-foot flagship store at Quartier DIX30 which opened in the fall of 2019 as well as a renovated downtown Montreal flagship. In Ontario, Sport Check operates many stores including several experiential flagships that span in excess of 70,000 square feet.
Inside sources say that we can expect more retailers in Canada to file for bankruptcy protection in the coming weeks and month following extended store shutdowns due to COVID-19. Consumer spending in many segments is expected to be sluggish in the months to come and as a result, retail sales for many will continue to suffer. While the sale of sporting goods may see a boost during the summer months, a lack of organized sports may put a further dent in sales at some sporting goods retailers for the foreseeable future.
