Canadian retailer Kit and Ace has announced the closure of all of its international stores, as well as layoffs at its head office.
It's the third round of layoffs this year for the Vancouver-based clothing retailer, launched three years ago by Lululemon founder Chip Wilson.
In a Facebook post, Wilson characterized the move as the company "simplifying its business plan and operations," focusing on its Canadian showrooms and its online sales.
"We recognize the traditional world of bricks and mortar retailing is changing, which is why we're shifting strategies," Wilson wrote.
"I believe in the business model for Kit and Ace. Going forward, we will be a stronger company."
Experts not surprised
When Kit and Ace first launched three years ago, it expanded rapidly into international markets, including Australia, the U.S. and the U.K.
Craig Patterson, editor in chief of Retail Insider, said industry insiders have been expecting a move like this for a while. He said Kit and Ace may have grown a bit too quickly for its own good, pushing for international expansion before fully forming its own identity as a brand.
"It's not something that a retailer would normally do if they were expanding organically and not through exceptional funding like Kit and Ace has," Patterson said.
David Ian Grey, founder of DIG360 Consulting, says the aggressive expansion strategy seems to have proven too ambitious — especially when the company found itself plagued with quality control problems.
"[Wilson] seemed to believe too much in a tech model of 'fast fail,'" Grey said. "He was misapplying a technology strategy to [retail] growth."
Neither Grey nor Patterson would speculate on whether the move is a precursor to even more closures and layoffs, or a move to an online-only business. But Patterson doesn't think Kit and Ace's products — the main selling point of which is a luxury fabric called technical cashmere — would work in an online-only model.
"I think given the tactile nature of their product, it would be a challenge to sell it only online," Patterson said.
In total, 26 stores will close. Kit and Ace's nine Canadian stores will remain open.
With files from Anita Bathe.