{"id":513698,"date":"2026-03-04T12:26:10","date_gmt":"2026-03-04T12:26:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/513698\/"},"modified":"2026-03-04T12:26:10","modified_gmt":"2026-03-04T12:26:10","slug":"iconic-retailer-roots-could-be-for-sale-as-it-launches-strategic-review","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/513698\/","title":{"rendered":"Iconic retailer Roots could be for sale as it launches strategic review"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Shoppers pass a Roots store in Toronto’s Eaton Centre on Tuesday.Sammy Kogan\/The Globe and Mail<\/p>\n

Retailer Roots Corp. ROOT-T<\/a> could be up for sale as the iconic Canadian clothing and accessories brand launches a strategic review of the company. <\/p>\n

Toronto-based Roots, which has cultivated an image deeply tied to Canadiana over its 53-year history, announced on Tuesday that its board will be looking at a range of options for the company that could include a sale or other measures.<\/p>\n

Roots has roughly 100 stores in Canada, two locations in the United States, and another 100 partner-operated stores in Asia. The company, known for selling loungewear such as sweatpants and \u201ccabin socks,\u201d as well as leather goods, has been majority-owned by private equity firm Searchlight Capital Partners since December of 2015. It completed an initial public offering on the Toronto Stock Exchange in October, 2017.<\/p>\n

Founders Michael Budman and Don Green, who met at an Ontario summer camp and launched Roots in 1973, continue to own roughly 13 per cent of the shares.<\/p>\n

Searchlight took a majority stake with the intention of accelerating the company\u2019s expansion and building its international presence, but growth has been significantly slower than expected. <\/p>\n

Roots CEO says shoppers remain price-sensitive as retailer records lower profit, sales up 7%<\/a><\/p>\n

In a prospectus filed just before the IPO, Roots estimated that its annual sales would grow to a range of $410-million to $450-million by 2019, but walked back that guidance the following year. In the fiscal year ended Feb. 1, 2025, total revenue was $262.7-million. <\/p>\n

The retailer\u2019s \u201cfinancial track record has not achieved expectations outlined during its IPO,\u201d TD Cowen analyst Brian Morrison wrote in a research note published on Tuesday morning. He added that Roots has consistently generated had strong free cash flow, but has a \u201climited growth profile,\u201d and estimated that in a sale scenario, it would fetch a price at the \u201clow end\u201d of its peer group in the retail industry. <\/p>\n

In an e-mail, Roots chief executive officer Meghan Roach declined to comment on why the board had decided to launch the strategic review at this time.<\/p>\n

\u201cAs this is a board-led process, I cannot comment on the intentions of any investors,\u201d wrote Ms. Roach, who joined the company from Searchlight Capital in 2020. <\/p>\n

Roots\u2019 share price, which has hovered around $3 per share so far this year, jumped 13 per cent in trading on Tuesday following the announcement to close at $3.40. <\/p>\n

The company\u2019s sales performance has been improving: Roots\u2019 comparable sales grew by 11.5 per cent in the first three quarters of its fiscal year.<\/p>\n

But in recent years, profitability has declined. Excluding a one-time impairment charge \u2013 which caused Roots to report a net loss in the fiscal year ended Feb. 1, 2025 \u2013 net income would have been $3.3-million. That was an improvement from the prior year, but just half the income the company reported two years earlier, and down significantly from the postpandemic recovery years.<\/p>\n

Under Ms. Roach\u2019s leadership, Roots has been cleaning up its operations \u2013 including cutting back on the number of items sold at a discount, improving its mix of merchandise, and reducing the cost of producing its products. Roots has also been spending more on advertising, to try to revive the brand in customers\u2019 minds. <\/p>\n

\u201cYounger people are going retro, and they haven\u2019t found Roots yet,\u201d said retail industry consultant David Ian Gray. \u201cMaybe there is an opportunity to reconnect with a younger audience. But that\u2019s going to take more digital savvy than they have now.\u201d<\/p>\n

For some demographics of Canadian shoppers, on the other hand, Roots has enviable, almost universal brand awareness \u2013 but that can be both a blessing and a curse, said Randy Harris, president of market research firm Trendex North America. <\/p>\n

\u201cWhen you have awareness like that, people say, \u2018I don\u2019t need to look at that; I know what they\u2019re about,\u2019\u201d he said. <\/p>\n

Roots has also been eyeing U.S. expansion \u2013 an effort the company abandoned in 2020 \u2013 but succeeding in that market takes significant investment, Mr. Gray said.<\/p>\n

\u201cIf you look at what Aritzia has been doing, that\u2019s not an overnight success,\u201d he said. \u201cThey\u2019ve been investing persistently there, and putting serious money into it.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Shoppers pass a Roots store in Toronto’s Eaton Centre on Tuesday.Sammy Kogan\/The Globe…\n","protected":false},"author":2,"featured_media":513699,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-513698","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/513698","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=513698"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/513698\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/513699"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=513698"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=513698"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=513698"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}