North West Company shifts into expansion mode

Hey there, time traveller!
This article was published 11/06/2015 (4065 days ago), so information in it may no longer be current.

AFTER a three-year hiatus, Winnipeg-based North West Company is set to unleash new Giant Tiger stores in Western Canada.

North West CEO Edward Kennedy said Wednesday the discount junior department store operator plans to open three Giant Tiger outlets this year — one in rural Manitoba, one in northwestern Ontario and likely one in Alberta. And he indicated that pace of expansion will likely continue for the foreseeable future.

“I think three or four stores a year would be a realistic range for us,” he said after the company’s annual general meeting in Winnipeg.

Kennedy said there are several reasons why it makes sense for the company’s 31-store Giant Tiger division to shift into expansion mode: not only is the brand performing better these days, the retail landscape has also changed with Target’s recent withdrawal from Canada.

“We looked at the market conditions and saw that the lay of the land is better,” he said.

“With Target’s exit, the market is more stable and that gives us a clearer picture.”

Kennedy said North West is also on the lookout again for acquisition opportunities after focusing its efforts last year on replacing, renovating and upgrading stores in its top-40 markets in Northern Canada.

Although that remains a priority — the company plans to spend another $65 million this year and $150 million over the next three years — Kennedy said North West is open to acquiring another retail operation or maybe even a wholesale/distribution operation.

Shareholders attending Wednesday’s meeting were told 2015 is off to a good start for the company, with first-quarter sales up 10 per cent to $414 million and net earnings up 23.8 per cent to $15.7 million, or 32 cents per share.

North West chairman Sandy Riley also took the opportunity to outline the company’s position on the recently released Truth and Reconciliation Commission report.

The commission spent the last six years investigating the devastating impact of the residential school system and issued more than 90 recommendations. Chief among them was the federal and provincial governments take concrete steps to improve health, education and economic opportunities for Canada’s aboriginal people.

Riley said as a leading retailer in aboriginal communities throughout Northern Canada, the NWC recognizes the historical opportunities the report presents.

“We want to add our voice to those who are calling on governments to act expeditiously on many of the key proposals within this report. Particularly those that enhance the educational opportunities, health care and living standards for our indigenous citizens,” he said.

“If we do this right, there will be a huge payoff for Canada’s economy as we engage and mobilize the skills, talents and aspirations of our indigenous communities. Especially their youth. But if we get it wrong, the costs, both social and economic, will be immeasurable.”

The NWC operates more than 200 stores in Canada, Alaska, the South Pacific and the Caribbean under the trading names of Northern, NorthMart, Giant Tiger, AC Value Centre and Cost-U-Less.

murray.mcneill@freepress.mb.ca