Skip to main content

A Toronto Loblaw store is seen in this file photo.Gloria Nieto/The Globe and Mail

Fashion purveyor Joe Fresh is launching a major international expansion, adding 141 stores in 23 countries beyond North America over the next four years.

Grocery giant Loblaw Cos. Ltd., which makes Joe Fresh, will offer the line in countries in the Middle East, Eastern Europe and South Korea – beyond the stores in which it is now sold in Canada and the United States.

The line will be made available through three international partnerships, Galen G. Weston, executive chairman of Loblaw, said on Thursday.

"It's representative of what has been a long standing belief on our part that there's an international level of opportunity for the Joe Fresh brand," Mr. Weston said.

As well, Loblaw will start to test e-commerce in the Toronto area for its food and consumers products, company president Vicente Trius told a conference call. The cyber-shopping will be modelled on a British system of having customers order their goods online and pick them up in stores. Loblaw will test the program in three of its Toronto area outlets in 2014, Mr. Trius said. "Yes, we're briging this to Canada," he said.

Last year, Loblaw started to sell its Joe Fresh apparel online.

Loblaw already has teamed up with retailer J.C.Penney to sell Joe Fresh in its U.S. department stores. But the troubled American chain recently scaled back on those offerings, Mr. Weston said.

"It hasn't gone quite the way we hoped it would," Mr. Weston said, blaming the lower-than-expected performance on the change of leadership and strategy at J. C. Penney.

"But we are comfortable that they are committed to some lower volumes but to a sustained relationship with Joe Fresh," Mr. Weston added. "And so we continue to be optimistic about that business."

Like the J.C. Penney partnership, the new international expansion will be done through wholesale agreements between Loblaw and a third party, entailing "no material risk from a capital perspective," he said.

As well, Loblaw stocks Joe Fresh in its larger supermarkets as well as in standalone outlets, including some flagships south of the border.

For its fourth quarter, Loblaw announced its profit fell to $127-million or 45 cents a share from $139-million, or 49 cents a share a year earlier. Excluding some items, Loblaw earned 65 Canadian cents per basic share, beating analysts' estimates.

The company, whose $12.4-billion deal to buy Shoppers Drug Mart is expected to close this quarter, said total revenue rose 2.3 per cent to $7.64-billion.

Retail sales rose just 1.8 per cent while sales at established stores rose 0.6 per cent. Loblaw is also involved in property leasing and financial services.

Net interest and other financing charges jumped 68 per cent to $141-million.

With files from Reuters