Author: Tara Deschamps The Canadian Press

Groupe Dynamite Inc.’s CEO says tariffs aren’t blunting the appeal of a new cute top.

While Andrew Lutfy has seen some customers forgoing big-ticket purchases like boats, RVs and basement renovations as countries levy increasing duties, he says that pullback isn’t carrying over to its Dynamite or Garage stores.

The women’s fashion retailer is instead seeing shoppers looking for “some instant gratification” amid all the “heaviness out there.”

“For the price of a martini in a nice restaurant, you could buy a cute top and feel great and wear it over and over again, so we’re seeing a customer that’s looking for moments of joy and happiness and we are an affordable indulgence,” Lutfy told analysts on a conference call on Tuesday.

He said he expects that trend to continue, especially if interest rates, debt levels and prices remain high because of the tariff war U.S. President Donald Trump has sparked with Canada and several countries known for manufacturing clothing.

Groupe Dynamite shares were up nearly 15 per cent or $2.40 at $18.91 on the Toronto Stock Exchange on Tuesday after it reported its latest financial results and raised its guidance for comparable store sales for the year.

The company said it earned a first-quarter profit of $27.3 million or 24 cents per diluted share, up from $23.9 million or 22 cents per diluted share a year ago.

On an adjusted basis, Groupe Dynamite earned 25 cents per diluted share in its quarter ended May 3, up from an adjusted profit of 23 cents per diluted share a year ago.

Revenue totalled $226.7 million, up from $188.9 million, while comparable store sales rose 13 per cent.

In its outlook, Groupe Dynamite said it now expects comparable store sales growth for its full year between 7.5 per cent and nine per cent, up from earlier guidance for between five per cent and 6.5 per cent.

RBC Capital Markets analyst Irene Nattel pointed out that such numbers were ahead of forecasts, meaning the business was “starting the year with a bang.”

The results reflect the work Groupe Dynamite has done to shift its supply chain away from China — one of Trump’s top tariff targets — and set the stage for a further brand expansion.

The company, which is celebrating its 50th anniversary, will expand into the United Kingdom next year and is weeks away from opening a new U.S. distribution centre.

The facility will cut shipping times, improve service levels, reduce costs and help the business better manage and replenish its inventory, president and chief operating officer Stacie Beaver said.

“More importantly, it means when our customer shops with us, she gets exactly what she wants when she wants it,” she said. “That’s the experience our teams deliver every day and it’s a promise we’re excited to bring to the U.K. when we open our first store there next year.”

Back home, she said the company has been renovating its Garage stores to introduce “a cleaner, more elevated” store layout.

The latest to get a revamp are Square One and Conestoga Mall in Ontario.

Their renovations and others are boosting worker satisfaction, Beaver said.

“Turnover is down, engagement is up, and it shows,” she said. “Our associates are more confident, more connected to the product, and better equipped to serve our customers.”

This report by The Canadian Press was first published June 17, 2025.

Companies in this story: (TSX:GRGD)

Tara Deschamps, The Canadian Press

A group of Reitmans Ltd. shareholders have released their second letter in two months urging the apparel retailer to address its stagnating value, saying they want to replace two board directors and end the company’s dual-class share structure.

The open letter published Wednesday is from Donville Kent Asset Management Inc., Parma Investments Ltd. and an unnamed private investor. They collectively own more than 5.5 million class A shares in Reitmans and another 1.1 million common shares in the company.

In the letter, they reiterated their claim from a May 13 letter that Reitmans has demonstrated “consistently poor decision making” and ignored their requests to explore how the company could unlock more value for shareholders. 

As of May 12, the company’s market capitalization was $105 million — lower than its net cash holdings of $158 million, and well below its net worth on paper of $280 million, the concerned shareholders say. This means the business was valued at less than the cash it held. 

To boost the way the market perceives the retailer, the shareholders want the company to drop its dual-class share structure and move from the TSX Venture Exchange, “a junior market typically suited for emerging companies,” to the main Toronto Stock Exchange.

In response to the May letter, Reitmans said it has been in communication with Donville Kent and Parma for many quarters and “regularly evaluates options to optimize shareholder returns.”

But the shareholders maintain boosting the company’s value has fallen by the wayside because of executive chairman Stephen Reitman and his alleged “complete dominance overboard members.”

Reitman is the grandson of the company’s founders, Herman and Sarah Reitman. His family owns, on an aggregate basis, the equivalent of 21.67 per cent of the company’s shares, including a majority of the voting common shares.

Stephen Reitman has worked at the retailer for about 50 years and is well into his seventies.

He held the CEO job when the almost 100-year-old business filed for creditor protection in May 2020, citing the COVID-19 pandemic as one of the reasons for its recent woes.

The Montreal-based company rebounded after a restructuring but in order to survive it had to close 160 stores, cut 1,400 employees and dump its Addition Elle and Thyme Maternity brands. Its RW & Co. and Penningtons banners remain.

The shareholders behind the Wednesday letter argue it’s now time for the company to collapse its dual-class share structure and graduate to the Toronto Stock Exchange.

They say a TSX listing would elevate Reitmans’ profile among investors, including large institutions, result in a more accurate valuation of shares and provide it with more room to grow.

They also want a board shake up and say they are intending to vote against the reappointment of Bruce Guerriero and Daniel Rabinowicz “due to independence issues and a clear misalignment with the interests of all shareholders.”

Instead, they’d like to see Jesse Gamble, senior vice-president at Donville Kent Asset Management, and Deborah Honig, president at Adelaide Capital, join the board as independent directors.

In response, Reitmans says its ownership structure has been in place for many years and independent board members have long provided deep expertise to the business.

“We would like to stress in the strongest possible terms our confidence in the performance and objectivity of each of our independent directors and that any allegations that have recently been made impugning the independence of certain of our independent directors are false and wholly without merit,” the company said in a statement. 

“There should be no doubt whatsoever as to this fact, and (we) categorically reject any assertion to the contrary.”

Since their first open letter was sent on May 13, the concerned shareholders say they have racked up support from organizations and people holding nearly 41 per cent of the shares not held by the Reitman family.

This report by The Canadian Press was first published June 11, 2025.