Dive Brief:
- Roots Corporation is undergoing a strategic review and exploring possibly selling its business or pursuing other alternatives, the Toronto, Canada-based brand announced Tuesday.
- The company is working with J.P. Morgan Securities Canada as its financial adviser and Torys LLP as its legal adviser for the strategic review, according to a company press release.
- The strategic review is taking place while the company executes its current business plan.
Dive Insight:
Roots’ decision to launch a strategic review follows previous financial struggles for the outdoor apparel brand. In 2020, the company filed for Chapter 7 bankruptcy of its U.S. unit with plans for its subsidiary, Roots USA Corporation, to close seven of its stores.
The company launched a multiyear turnaround strategy, which involved closing underperforming stores and focusing on “high potential locations,” CEO Meghan Roach said during a call with analysts last June. The company still has two locations in the U.S. — one in Michigan and the other in Utah.
For now, the company won’t disclose developments that come from its strategic review, unless its board approves a specific transaction or determines that disclosure is appropriate or required by law.
“As the strategic review proceeds, the Roots management team remains dedicated to acting in the best interests of the Company and to executing on its key objectives,” the company said in a statement. “Roots remains unwavering in its commitment to its customers, partners, and employees in its ongoing operations as the strategic review proceeds.”
Prior to announcing its strategic review, Roots promoted Rosie Pouzar from head of omnichannel growth to chief commercial officer in February. Pouzar joined the company from Sephora Canada, where she held leadership roles, including chief operating officer and senior vice president of retail.
In the retailer’s latest quarter, sales rose 6.8% from a year earlier to $71.5 million, while net income declined 4.5% to $2.3 million in Q3. Roots reported its net debt dipped 5.9% year over year to $44.1 million.
