Davids Footwear was once synonymous with Toronto luxury retail, drawing well-to-do shoppers in search of the latest stilettos, sandals and pumps from the likes of Jimmy Choo, Christian Louboutin and Manolo Blahnik.

But now the shelves at the tony Yorkville shop sit half empty, with signs highlighting deep discounts of the kind more often found at retailers like Winners. It’s a similar scene at the company’s four other stores, including one in Ottawa.

Davids, which has been a Toronto institution since 1951, is going out of business, forced into receivership earlier this summer by Rosejack, an investment company controlled by Larry Rosen, CEO of fashion retailer Harry Rosen. According to court filings, Davids owed just over $9 million to Rosejack. Neither Rosen, Richard Markowitz — grandson of Davids founders Louis and Julia Markowitz — nor a representative from court-appointer receiver Richter would comment.

“All forecasts and cash flow projections disclosed that the Company would continue to suffer further losses for a number of years and that the Company would require additional liquidity,” Rosen said in an affidavit filed in court, noting that Davids had lost $991,859 in the fiscal year ending Feb. 2, 2019. The company’s existing stock will be liquidated to give Rosejack a shot at collecting some of the $9 million it’s owed.

Rosen also noted that three other shoe retailers have recently sought protection from creditors, including Rockport Shoes, Nine West and Payless ShoeSource.

“Davids has not been immune from the challenges that the retail footwear business has encountered and continues to face,” Rosen said, adding that falling sales meant the company’s flagship location was paying rent that was more than 30 per cent of its gross revenues, roughly double the ideal percentage for a successful store.

The end for Davids comes just two years after Rosen, through Rosejack, took over the storied shoe store and unveiled plans to turn it into a 20-location chain across the country.

“We thought there was a great opportunity to work together to take the Davids concept and expand it right across the country,” Rosen told the Star’s Francine Kopun at the time.

“We see a network of maybe up to 20 Davids stores across the country, we see a very strong online, we see locating in the seven major markets in this country,” said Rosen.

Unfortunately for Rosen, and Davids, that proposed expansion came just as some heavy-duty competiton came to Toronto from the U.S., and suppliers started selling from their own store fronts, said retail analyst Lisa Hutcheson.

“The landscape for luxury retail has changed so much in the last two years,” said Hutcheson, managing partner at retail consulting firm J.C. Williams Group.

“Nordstrom coming changed things. And a lot of the higher-end brands that Davids would stock are starting to open their own retail stores,” said Hutcheson.

In his affidavit filed with the court, Rosen noted that Davids’ main supplier, Italian footwear brand Valentino, had pulled out of the store and opened its own outlet in Yorkdale. Valentino was also looking at opening a second store in the Bloor Street West high-end retail strip known as the Mink Mile, the affidavit said.

“Valentino has been the largest supplier to Davids and accounted for over 20 per cent of the gross sales in the Bay/Bloor store and the Yorkdale mall store in 2018,” Rosen said in his affidavit.

Hutcheson also pointed to the arrival of a Christian Louboutin boutique in Yorkville in 2016 as another example of Davids having to compete with its own suppliers. Brand by brand, Hutcheson said, the exclusivity once found at Davids was getting picked off, and eating into revenue.

“If you used to go to Davids just because of their Louboutin, and now there’s a much bigger selection at the Louboutin store just around the corner, why would you go to Davids now?” Hutcheson asked.

Earlier this year, Italian luxury brand Versace also opened up its Canadian flagship on Yorkville Avenue, stocking hundreds of high-end items, including shoes.

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It’s especially tough for an independent store or smaller chain to weather heavy competition, said Hutcheson, because smaller chains typically have much smaller profit margins, thanks to no economies of scale, and less leverage when bargaining with suppliers.

That attempted growth strategy laid out two years ago? Nice thought, lousy timing.

“It maybe bought them a bit more time. It wasn’t a ridiculous idea,” said Hutcheson.

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