Factory Direct Granted Permission to Liquidate Stores in Ontario Amid Decreasing Demand

An Ontario court has given the green light to Factory Direct to proceed with the liquidation of its stores in the province due to a decline in viability. The discount electronics and home goods retailer, with its roots in the business since 1995, has made the decision to close its 14 locations across Ontario.

According to court documents, Factory Direct cited significant operating losses amounting to about $1.7 million over an 11-month period until Nov. 30. The company has been battling dwindling sales and escalating costs, factors exacerbated by the extensive inflation experienced in the market.

The retailer, based in Vaughan, Ontario, pointed out that the increasing inflation has negatively impacted the demand for its merchandise, particularly non-essential items like televisions. Moreover, it mentioned the rising competition from online marketplaces and direct-to-consumer businesses that have further challenged its market presence.

Currently, Factory Direct operates stores in various cities, including Hamilton, Brantford, and Niagara Falls. The transition towards liquidation will involve terminating approximately 200 employees as the business operations are scaled down and eventually ceased.