TORONTO -- The CEO of a Canadian retailer that suddenly terminated its entire workforce last week admits the company had been unprofitable for several years and simply couldn鈥檛 compete with online retailers such as Amazon.
鈥淯nfortunately when a business costs more money than it makes every day, time is of the essence to close so the business doesn鈥檛 eat itself, if you will,鈥� Things Engraved CEO Shawn Brock told CTVNews.ca in a phone interview Tuesday.
Nearly 300 workers lost their jobs last week when Things Engraved, a company that sold personalized gifts and engraving services in malls across Canada,
Employees received letters last Thursday informing them that they would be let go immediately 鈥渁s a result of financial difficulties over the last few years.鈥� Several employees who spoke with CTVNews.ca voiced frustration and anger, saying that being terminated so soon after the holidays made it feel as if the company didn鈥檛 care about them.
鈥淲e absolutely care and I think certainly value the service they鈥檝e put in and their commitment to the business,鈥� Brock said.
He said the company鈥檚 ownership, Serruya Private Equity, ultimately made the decision last week to cease operations. The timing, while sudden, was done so the company would have enough money to pay out employees, Brock said.
鈥淭he reality is we know it鈥檚 very abrupt and regrettably tough to deal with at a time like this,鈥� he said. 鈥淲e wanted to assure them they would be paid in lieu of the required notice period.鈥�
Store managers were only given one day to contact customers with engraved items they hadn鈥檛 picked up yet, including pieces like an engagement ring and a memorial plate for a funeral.
Many of those items have yet to be returned, and all Things Engraved locations are now closed. The company is now working with malls to help customers retrieve those items.
鈥淲e鈥檒l do everything we can with the landlords,鈥� Brock said.
WHY IT鈥橲 CLOSING
A series of factors came together in the last few years that made it challenging for the business, which first opened its doors in 1982, to turn a profit.
For many years, Things Engraved had a concession partnership with Sears that allowed the company to operate kiosks within Sears鈥檚 mall footprint. This arrangement ended when Sears declared bankruptcy in 2017, leaving 15,000 people out of work.
Sears鈥檚 demise meant that Things Engraved lost nearly 24 of its stores 鈥� some of them the most profitable in its portfolio -- within a span of three months, Brock said.
Of its remaining 73 stores operating by the time of closure, only about one-in-three were profitable, Brock said. From his perspective, online retail was a big part of the problem.
鈥淲hat the business has seen over the last five years, but very acutely over the last three years, is the quick rise in Canada of the Amazon Marketplace where there is quite a lot of sellers doing custom gift products. Etsy, even eBay has allowed lots of mom-and-pop businesses, garage-based businesses, independents, to get in and really step into the personalized custom gift space. And that鈥檚 created a lot of competition for businesses like us,鈥� he said.
鈥淥ur own online business has grown a bit over the years, but not in a way that offsets what I think every business is losing to Amazon, month after month, year after year.鈥�
Last year, more than 9,300 retail stores closed in the United States, more than 100 foreign retailers have entered the Canadian market in the last three years alone, adding to the competitive pressure.
Brock denied rumours that Things Engraved was moving to an online-only business model.
鈥淎t this stage, there鈥檚 no plan for that,鈥� he said. 鈥淎t this stage, we are winding down all operations. We are continuing to sell some inventory online and filling orders to customers, essentially closing that business out now. But we鈥檙e mainly focused on getting product returned to our suppliers.鈥�
As for his next move, Brock said that鈥檚 yet to be determined.
鈥淓ssentially winding this business down on behalf of the ownership and re-entering the job market. Looking for my next career venture,鈥� he said.
Anyone with items left at a Things Engraved store that they haven鈥檛 picked up is asked to email customerservice@thingsengraved.ca with a description of the item and the location that it was left at.
With files from Solarina Ho
