U.S.-based owner of Town Shoes to close all 38 stores in Canada by January

Canadian shoe lovers will soon have one less spot to snatch up footwear and experts say its a symptom of changing consumer behaviour.

Ohio-based shoe brand DSW Inc. said it will shutter its Town Shoes Ltd. brand and close all 38 of its stores, which operated solely in Canada, by the end of the company's financial year in January.

DSW Inc. spokesperson Margaret Standing said the decision was made after the company undertook a 90-day review to look at Town Shoes' historical performance, competitive positioning and future requirements.

Difficult decision

"The decision to exit the Town banner was a difficult decision to make, given its heritage," she told The Canadian Press in an email.

"Unfortunately, as the competitive landscape for mid-luxury, mall-based footwear has dramatically changed, comparable sales have deteriorated consistently and generated significant operating losses."

Tamara Szames, a fashion industry analyst with research company NPD Group, said "off-price" and luxury apparel retailers are both exceeding growth expectations, but businesses in the middle, like Town Shoes, are being challenged.

"When we look at the retailers that have closed down over the last 24 months, it is really those in the middle," she said.

"With e-commerce really driving growth, we have started to see more brick-and-mortar stores close to align with consumer demand."

Only 15 per cent of shoe sales in Canada are done via online channels, trailing the U.S., where 25 per cent of footwear purchases are done through e-commerce, Szames said.

She's expecting to see a "dynamic shift" in the near future, as Canada's online footwear sales grow at twice the speed of the U.S.

She's also predicting the closure of retailers like Town Shoes will continue to add to the changing face of malls, which have already been grappling with how to fill spaces left vacant by the recent Canadian closures of Sears and Target.

The closures have forced many malls to turn to condo developments, health-care offices, restaurants and gyms to fill vacant properties.

The Town Shoes closure will only bring more room to fill because its stores, which average 232 square metres (2,500 square feet), have long been a staple at Canadian malls.

Retail landscape constantly changing

Mall-owner Cadillac Fairview declined to say what it would do with the spaces it owns that are currently housing Town Shoes locations, but said because of the retail market it is always seeking opportunities to "update the merchandising mix" at its shopping centres.

"The reality is that today's retail landscape is highly competitive and constantly changing," said spokesperson Eva Lannon, in an email to The Canadian Press.

"It is never easy to see a valued tenant cease operations or leave our shopping centre."

Beyond mall owners, the sale of Town Shoes will also affect 400 workers employed by the company. DSW said it is hoping to find the workers alternative employment at its Shoe Company, Shoe Warehouse and DSW brands.

DSW purchased a 49.2 per cent interest in Town Shoes from Alberta Investment Management Corp. and other minority shareholders in May 2014 for $75.5 million and picked up the remaining stake in the company in May 2018 for $44.7 million.

Town Shoes was first created in Toronto in 1952 by entrepreneur Leonard Simpson.