Popular chain shutters stores, cites rental costs

by Jill Gregorie20 Jan 2016
Goodwill Industries has “unexpectedly” closed all 16 of its Toronto-area locations this week, citing real estate costs for its demise, according to The Globe and Mail.
 
“We have to rent all our locations,” said Keiko Nakamura, CEO, Goodwill Industries of Toronto, Eastern, Central and Northern Ontario, told the outlet. “As a result, we have high rental costs in terms of the overall percentage of what is spent for the organization. It is a very low-margin operation.”
 
430 employees have lost their jobs as a result of the shuttering, and it is unclear whether they will receive severance pay once the stores are fully closed.
 
While Nakamura says that some Ontario storefronts run by separate Goodwill organizations are “thriving,” she notes that they don’t feel the same market pressures that Toronto, Mississauga, Brampton and neighboring areas do.
 
Although Goodwill sold property on Richmond Street in downtown Toronto for $4.1 million in 2011, the money did not sufficiently cover its following years of losses. In 2014, the organization fell into a $1.1 million net deficit, and 2015 appears to show a continued decline as well.
 
Goodwill’s real estate woes were also exacerbated by labor disputes, particularly since the staff’s union rejected a plan that would allow the stores to reduce workers’ hours between January and March. 
 
“In order to ensure that we were not asking staff to work at a time when we didn’t feel that we would be able to cover their costs, we had to close down the stores,” Nakamura said.
 
The news hits the community particularly hard, as the organization’s hiring process prioritized disenfranchised groups such as the disabled. It also provided labor counselling services to those who are struggling to secure employment.
 
While its peer organization Salvation Army Thrift hasn’t faced the same setbacks as Goodwill, it does acknowledge that real estate costs are a “challenge” in the GTA. 
 

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