XS Cargo fails to restructure and closes all Canadian stores

XS Cargo Co. has announced its intentions to close 50 stores

across eight provinces in Canada after it failed to restructure itself. The entry of discount American chains such as Target has been signalled as the main burden for the Canadian retailer.

On July 30 the company filed a notice that said it would restructure itself under Canada’s Companies Creditors Arrangement Act. The company reported that it owed 7.4 million dollars to its unsecured creditors.

However, the company, founded in 1996, didn´t manage to take its restructuring efforts to safe haven. With Target’s recent arrival in Canada, XS Cargo has also suffered and has been pressured to price more competitively.

According to a report filed in Ontario Superior Court in July, “During the past six months, [XS Cargo] experienced a downturn in sales due to the emergence of a large well-known American discount retailer who entered the Canadian market along with increased competition from well-established traditional retailers who have significantly increased their tactical promotional activities.”

“Both of these factors contributed to difficulties in the [retailer] executing its turnaround strategy.”

On September 15 an agreement was made between XS Cargo and Boston-based Tiger Capital Group LLC to liquidate its stores. On September 19 the deal was approved.

In this vein, Bradley Snyder, executive managing director at Tiger Capital, said that the company’s final liquidation sale has been robust.

“We do have merchandise coming in every day. We are urging customers to come in for great opportunities because we don’t think the sale term will last very long,” said Snyder.