- Leon’s Furniture Limited Group (TSX:LNF) is closing a 72 stores, due to COVID-19’s ongoing economic impact
- The company is also making 50 per cent of its staff redundant, which amounts to around 3,900 employees
- Leon’s Furniture Group is Canada’s largest retailer of furniture, appliances and electronics
- In its 2020 outlook, released earlier this month, the company planned to open six new stores during the year
- Leon’s Furniture Limited (LNF) us up 2.28 per cent, with shares trading for C$10.75 and a market cap of $869.8 million
Canadian retail giant, Leon’s Furniture Limited Group (TSX:LNF) is closing a third of stores and laying off half of its staff, effective immediately.
The company stated that the closures are part of capital adjustment, caused by the ongoing COVID-19 crisis.
Leon’s Furniture Group is Canada’s largest retailer of furniture, appliances and electronics. It also manages retail brands like The Brick, The Brick Mattress Store and The Brick Outlet.
Since the outbreak began, LNF has noted a steep drop-off in customer traffic.
The layoffs will impact 3,900 staff across the country. After the closures, Leon’s Furniture’s has reduced its stores from 205 to 133 locations.
The company will be enhancing its employment insurance and make supplemented payments to employees affected by the decision. The company also stated it will extend its paid benefits moving forward.
This is a surprising development from a company that only last month released a strong 2019 financial report. LNF reported profits across its retail outlets, which resulted in $121 million in net income.
In his 2020 outlook, Edward F. Leon, President and CEO of LNF Group, seemed confidant in further expanding the company throughout the year.
“Our plans for this year include opening another six stores, with the smaller smart store concept expanding our range of viable markets,” he said.
The company did not state whether it is still proceeding with the planned expansion.
Closing so many stores only weeks after releasing these figures shows the rapid impact COVID-19 has had on the Canadian retail industry.
However, in that same address Edward noted that the economy’s ten-year growth could be reaching its pinnacle
“When reflecting back on the past decade, it is worth noting that we have been in the same economic expansion cycle that entire time, and that is lengthy by historical standards.
“There are potential concerns around consumer confidence and high levels of household debt,” he said.
Leon’s Furniture Limited (LNF) us up 2.28 per cent, with shares trading for $10.75 at 1:59pm EST.