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This article was published 12/3/2020 (190 days ago), so information in it may no longer be current.

The North West Company is selling 34 of its 46 Giant Tiger stores in Western Canada, after deciding to focus more intently on its northern and remote retail operations.

With that announcement — as well as the completion of a multi-year installation of a $35-million information technology project — it renders a number of head office responsibilities redundant.

WAYNE GLOWACKI / WINNIPEG FREE PRESS FILES Edward Kennedy, the CEO of NWC, says the restructured head office is required to lower prices at its stores in northern Canada and Caribbean and South Pacific islands.

The company will eliminate almost 25 per cent of the 540 jobs at its head office.

Of the close to 130 positions that will be cut, about 86 people will be laid off and 40 positions will be eliminated through attrition. The layoffs will take place over the next several months.

"We are sorry about the personal impact this decision has on our people," said Edward Kennedy, NWC’s chief executive officer.

"We built up these numbers (at the head office) and when they come down like this in terms of people’s jobs and roles, it is a reflection on us because we had committed to people that this is place to grow their careers.

"When you have to make adjustments — and with changing conditions it can happen with any business — we regret that."

The company’s head office had grown by about 70 per cent during the past 10 years.

After the Giant Tiger divestiture, the company will have about 200 stores, mostly in Canada’s North and Alaska, as well as a few in remote Caribbean and South Pacific islands.

The decision was made to sell the stores to the parent company, Ottawa-based Giant Tiger Stores Ltd.

In addition to switching the focus to its northern outlets, some of its stores consistently under-performed.

The sale price is $45 million, with an additional $22.5 million coming when certain milestones are met at those stores after the sale closing, which is expected by the end of May.

NWC will retain six Giant Tiger stores in what Kennedy refers to as northern gateway locations: La Ronge, and Meadow Lake, Sask., The Pas and Thompson, Man., and Sioux Lookout, Ont. Its Prince Albert, Sask., Giant Tiger store will be converted to a Valu-Lots clearance centre.

It will close six stores in Red Deer, Fort Saskatchewan and Wetaskiwin, Alta.; North Battleford and Weyburn, Sask.; and the Stafford Street location in Winnipeg.

Most of the discount food and merchandise retailer’s 260 stores across the country are owned by franchisees.

NWC’s master franchisee status for Western Canada will end but it will continue to be a Giant Tiger franchisee.

As well, the two companies will maintain a relationship in which each of them supplies each other.

NWC will distribute some food to Giant Tiger stores and Giant Tiger will start to distribute some household and soft goods lines to NWC’s Northern Stores.

Paul Wood, president and chief operating officer of Giant Tiger, said, "We are thrilled to be reacquiring these stores and at the same time transitioning our relationship with NWC, not ending it. It has been a long relationship between our companies. We know each other’s strengths. We will be able to work together to a mutually beneficial solution."

The NWC made no secret of the performance challenges it had with Giant Tiger stores in the last couple of years.

"We continued to look at how we could improve that performance," Kennedy said.

"Eventually, we did not see how we could, and we are OK with that."

Without the distraction of trying to maximize Giant Tiger’s operation — Kennedy said that was getting harder to provide when the company had other priorities — NWC is refocusing on streamlining its Northern Stores operations.

The company also announced a $10-million undertaking to work towards lowering prices for its network of stores in northern Canada and Alaska.

"Remote communities are a structurally high cost environment," Kennedy said. "We want to find ways to reduce costs and our prices. While everyone wants lower prices, our customers are income-challenged and when that happens, high prices are just magnified even more as a problem."

Kennedy said the restructured head office is just part of the process required to lower those prices.

"To really get sustainable growth in what we think is still a very attractive market… we have to look hard at our own cost structure," he said.

martin.cash@freepress.mb.ca