Groupe Dynamite Confirms Shutter of 10 Canadian Stores
Montreal-based fashion retailer Groupe Dynamite Incorporations announced plans to shutter up to 10 Canadian stores in fiscal 2025, primarily under its Dynamite and Garage banners, as part of a strategic shift to expand its US presence and navigate global tariff challenges.
Montreal-based fashion retailer Groupe Dynamite Incorporations announced plans to shutter up to 10 Canadian stores in fiscal 2025, primarily under its Dynamite and Garage banners, as part of a strategic shift to expand its US presence and navigate global tariff challenges. The move comes alongside ambitions to open 20 new stores in the U.S. this year, aiming to grow its total footprint from 298 to 350 locations by fiscal 2028.
Store Closures and Renovations
- Canadian Impact: 10 stores, mostly in Canada, will close, while 10–15 others will be relocated or renovated.
- U.S. Growth: 17 new Garage stores and 3 Dynamite outlets opened in the U.S. in fiscal 2024, with plans for 18–20 net new stores in 2025.
- Recent Closures: In Q4 2024, the company closed 1 U.S. Dynamite store and 2 Canadian Garage locations.
Drivers of Restructuring
- Tariff Pressures: U.S. tariffs on apparel imports from countries like China, Bangladesh, and Vietnam have escalated costs, prompting supply chain adjustments.
- Supply Chain Shifts: Groupe Dynamite is accelerating its pivot from China to manufacturers in Bangladesh, Cambodia, and Vietnam to mitigate risks.
- Agility Focus: CEO Andrew Lutfy emphasized “agility” as a core strategy, mentioning the term 12 times during an earnings call, to adapt to volatile trade policies and consumer demands.
Financial Performance
- Q4 2024 Results: Net profit rose to $31 million (28 cents per share) from $28.6 million a year earlier, driven by a 9.5% increase in comparable store sales and new store contributions.
- Revenue Growth: Total revenue hit $271.8 million, up 13% year-over-year.
Strategic Moves and Challenges
- U.S. Warehouse: A third-party logistics facility opening in July 2025 aims to streamline shipping and reduce delivery times.
- Consumer Resilience: Despite economic headwinds, Lutfy remains optimistic, citing apparel’s resilience: “A $30 top that brings joy can help people through tough times.”
- Risks Ahead: The company flagged potential hurdles, including $4–5 million in new public company costs, lease negotiations, and tariff-related pricing pressures.
The closures reflect broader retail sector strains, with U.S. tariffs and retaliatory measures squeezing margins. Competitors face similar challenges, but Groupe Dynamite’s aggressive U.S. expansion contrasts with Canadian downsizing. Analysts note the strategy balances market diversification against domestic contraction, leveraging U.S. growth to offset tariff impacts.
As Groupe Dynamite pivots southward, its Canadian retrenchment underscores the harsh realities of global trade dynamics. While the brand bets on U.S. expansion and supply chain agility, the success of this balancing act hinges on sustaining consumer loyalty amid rising costs and economic uncertainty.
