Express Pulls Out of Canada

Retailer only entered market in 2011

May 4, 2017

Six years after entering Canada, Express is quitting the market.

Express had only a small footprint in Canada with a total of 17 stores. In the latest fiscal year, which ended Jan. 28, 2017, the company's Canadian sales totaled about US$34 million, less than 2% of its $2.19 billion in total revenue for the year. Express said that the Canadian operation contributed a $6 million loss for the year.

The men's and women's apparel retailer said the move would leave it with 635 stores in the US. According to the eMarketer Retail & Ecommerce database, Express’s per store sales (including both the US and Canada) averaged $2.67 million in the latest year.

The company cited “the challenging Canadian retail environment” as a driver for the decision, as well as unfavorable exchange rates.

eMarketer expects total retail sales in Canada to edge up just 1.7% this year to $415.73 billion. That growth rate is expected to remain essentially flat for the next several years.

By comparison, sales growth in the US is expected to roughly double that pace this year, expanding by 3.5%.

Meanwhile, ecommerce—the growth driver for most retailers—has been slower to take hold in Canada than in the US. In 2017, ecommerce will make up 7.3% of total Canadian sales, compared with 9.2% in the US, according to eMarketer’s latest estimates.

While ecommerce is growing at a double-digit pace in Canada, the market offers significant diffulties. “Retailer investment returns are hard to attain in a huge country with a dispersed population,” said eMarketer analyst Paul Briggs.