Gateway Newstands, a major convenience store chain in Canada and the United States whose stores are typically located in office buildings, shopping malls and TTC subway stations, has just filed for bankruptcy.
Even as one of the largest and most frequently spotted stores in North America, Gateway has struggled financially due to declining sales and slowing foot traffic amid lockdown restrictions in both last years.
At least 40 stores had to close at the start of 2020, reducing the initial number of 191 stores in Canada to 150. A court filing shows the company owes its creditors more than $20 million, forcing them to file for creditor protection.
“We emerge with more liabilities than our business can support,” Gateway CEO Mary Kelly wrote in a letter to creditors.
“To continue to support our franchisees and our business in the future, we have made the decision to restructure our debts.”
One of the main culprits at Gateway Newstands has been the lack of foot traffic – a common factor in the closure of so many businesses over the past two years. And with factors like high gas prices, high rents and high labor costs, many stores couldn’t survive.
But there could be a light at the end of the tunnel. According to Export Development Canada“Canadian businesses and consumers appear to have adjusted their operations and habits with each successive wave” and as restrictions continue to ease, “economic activity is [starting] to pick up.”