Le Chateau, the 60-year old Canadian clothing retailer has announced that they will be shutting down business. My heart sunk when I read this headline and like so many of my generation I heard the collective gasp of my fellow GenXers. What happened?
While I stopped shopping there years ago I took for granted that they’d always be there. This relic from my childhood was supposed to always exist, albeit sitting quietly and in plain sight on the periphery. Sort of like a comfort blanket-every time I walked by it in the mall it evoked happy memories of excitedly rooting through the tables and racks filled with 80s fast fashion. I was a kid and this was the era of Madonna mania with the lace gloves, tanks and headscarves, along with the cross earrings. I don’t even remember how many times I dressed as Madonna on Halloween and I thought I was the coolest kid on the block. Yup, I still have those clothes and earrings as I haven’t had the heart to throw them out. I’ve included pictures for your viewing pleasure. That is me one Halloween dressed as a punk rocker. The belt, studded wrist band and Billy Idol t-shirt are definitely from Le Chateau. Go ahead laugh. I know it’s hysterical.
Think about that. I still cannot discard what I bought (well, my mother bought them, thanks Mom!) from Le Chateau all those years ago. That is the power of nostalgia and a testament to the significance Le Chateau held in our Canadian retail culture. The founder, Herschel Segal founded Le Chateau in 1959 in Montreal. He was ahead of his time and Le Chateau was a fashion forward company. Success didn’t come until 1962 when he began importing from trendy European fashion capitals of the world. At the time these styles would have been scarce in Canada and thus he ushered in a new era of style for the youth of Canada. The attached photo is of John Lennon and Yoko Ono in 1969 sporting bell-bottomed velour jumpsuits from you guessed it-Le Chateau! This was for their bed-in for peace campaign. At that time on planet earth it didn’t get any bigger than John Lennon and The Beatles. Le Chateau was the epitome of cool. (pic: National Post).
You’d think that when a business survives 60 years that they will keep going. We took it for granted. However, the retailer had been floundering for quite some time.
I dig some digging and here are my thoughts from a marketing and business perspective. In my opinion they made mistakes in two crucial areas. One was timing and the other was targeting.
They Took Too Long to Reposition:
Not adapting to a changing economic ecosystem in a timely manner is the death knell of any business. The company had been experiencing net losses since 2013, a reported 35.7 million in 2015 and 37.2 million in 2016 alone. They made a good decision to close poor performing stores from 2014 to 2016 going from 222 to 187 locations. They also were pouring money into enhancing e-commerce capabilities. At the same time, they decided to update the look and feel of their stores. This was a mistake in my opinion. In a world moving to online why would you pour millions of dollars on brick and mortar? They did this by using debt. In 2019 alone retail e-commerce sales worldwide amounted to 3.53 trillion dollars US and that number is only growing. As a business owner you can’t ignore those kinds of numbers.
They even hired an ad agency in 2015. Prior to this it had been 5 years since their previous campaign-an eternity in the retail world. They wanted to reposition the brand to connect with their Canadian heritage and it simply did not work. It’s all about your customer and I just don’t see the client in this equation. This rebrand took years and was just too long. During this time, competitor fast fashion powerhouses such as Amazon, H&M, and Forever 21 were crushing the competition.
They went to the past in terms of targeting when they should’ve looked to the future:
Remember, a key element of marketing is how customers see themselves associated with your brand. Part of the rebrand in 2015 was to connect to old customers. This in my opinion was another mistake. Le Chateau hasn’t been relevant to me for a long time. In my opinion, they made a huge error in trying to appeal to the same generation that bought from them decades ago. I moved on long ago once my income became higher. And I was never going back. That ship sailed. Granted, they have improved the quality of their clothing and became more sophisticated but if I’m going to spend on quality I am going to go with a higher-end brand that doesn’t have dozens of the same item and is more unique.
I would have recommended they close most of their stores and move to efficient, customer-focused online shopping. I also would’ve liked to have seen them connect with today’s youth by aligning themselves with influencers of today with the (youth) fashion look and feel of today. After all, the Le Chateau of my day was cool, hip, and current and they somehow lost that along the way. (this is based on cursory research, of course I would have to take a deep dive of their numbers and market research to make more specific recommendations).
-Always be assessing the external environment and trends.
-Don’t wait to adapt. (Covid-19 taught us that.)
-Always conduct market research. Consumers will tell you what they want so give them what they want.
Thanks for the clothes and memories Le Chateau.