Montreal-based Bentley Group, Canada’s largest luggage retailer, is closing about 120 of its 550 stores nationwide as part of a restructuring.
The move will reduce the workforce of about 3,500 full- and part-time employees by 500, while another 20 staff members at the head office will also lose their jobs.
Owner Andy Chelminski said in an interview yesterday more than half of the affected outlets are part of the struggling Xcetera chain that is being shut down.
“The Xcetera division we started four years ago has not been profitable and is losing money,” Chelminski said.
“It has been our biggest problem.”
Xcetera focused on trendy fashion accessories, jewels, watches and handbags for young urban women.
Ten shops have already been closed across the country, with 30 more to follow suit by month’s end and the remainder scheduled to shut by the end of June.
Chelminski said the signature Bentley Leathers Inc. stores have been “pretty solid,” so most of those outlets will continue to operate.
But in January, the Bentley Leathers subsidiary was given court approval to make a proposal to nearly 400 secured and ordinary creditors that are owed more than $58 million.
The bulk of that debt – nearly $29 million – is owed to financial institutions alone. Revenue departments in Quebec, Ontario, Manitoba, Saskatchewan and British Columbia are owed a total of $1.9 million.
As well, the federal government is owed more than $1.5 million for GST.
Chelminski said a proposal hasn’t yet been presented to creditors.
In addition to Bentley and Xcetera, the private company also sells luggage, wallets, purses, backpacks and related accessories under other banners, including Access.
The closings came on the heels of Mademoiselle Charmante Inc. of Montreal preparing to shut its chain of 47 womenswear shops, after being unsuccessful in selling them off, and restructuring at J. Schreter, the venerable clothing and footwear store on St. Laurent Blvd.
But despite the difficulties at Bentley, Mademoiselle Charmante and Schreter, the president of the Retail Council of Quebec said there has been a steady decline in the number of commercial bankruptcies in the province in the last decade.
“There has been an important decrease year to year since 1998,” Gaston Lafleur said.
Bankruptcies declined from 899 that year to 252 in 2007.
“The trend is bankruptcies are diminishing about seven per cent a year,” he added.
Lafleur also pointed out it’s usually known in the first three months of the year whether a retailer is in financial difficulty following the big holiday period.