Fire & Flower will be closing three retail storefronts in Alberta in order to maximize its retail profits. That announcement came along with the company reporting a loss of $32.6 million on revenue of $51.1 million for its fiscal year ending February 1, 2020. The company had 45 stores open in Alberta, Saskatchewan, Manitoba, Ontario, and the Yukon at that time.
Fire & Flower’s Chief Financial Officer Nadia Vattovaz says that the closing of the Alberta stores is par for the course for retail businesses, but it’s particularly important for cannabis retailers.
“This restructuring is part and parcel of what normal retailers do. We need to constantly assess our network of retail stores and take a look at which are performing and underperforming.” Vattovaz says, “[Any other retailer] can open as many locations as they want, but in Alberta, there is a limit on the number of licenses that you can have operating, so it behooves every cannabis retailer to ensure that they are maximizing their portfolio.”
According to recent market projections, Alberta exceeds the number of stores it needs to keep up with demand, while Ontario is running at a 96% deficiency, reportedly needing upwards of 1,400 more stores to meet the province’s needs.
Fire & Flower intends to focus on expanding into the Ontario market to pick up the slack. It has already acquired stores in Ottawa and Kingston, and has applications for eight additional stores across the province, including the Greater Toronto Area, London, Guelph, and Sudbury. Now that the construction industry is starting to move again, Fire & Flower hopes to have these locations, as well as a few more strategically placed locations in Alberta, open within the next few months.
“Looking forward to fiscal 2020, our focus will be on optimizing and growing our retail network,” Trevor Fencott, CEO of Fire & Flower said in a press release, “We will focus on addressable markets and participating in those markets in a meaningful and accretive fashion to our business.”
Recovering from COVID-19
Vattovaz says that issues with staffing availability due to COVID-19 had caused them to temporarily close some Alberta stores to redistribute the staff most effectively. Fire & Flower extended the health benefit offering to employees and many took advantage of it to keep themselves and their families safe, however, now that the threat seems to be somewhat subsiding, the workforce is strengthening again and the company is opening temporarily closed stores three at a time. Albertans should see these stores starting to re-open in the next few weeks.