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”From today Dijon closes its doors forever. We keep the thousands of memories of all this time with you. Of each outfit that they wore, of each testimony that we shared together ”. With that message, spread through its website and social networks, the company officially said goodbye to its clients and workers after decades of operations.
Although the announcement came as a surprise to those who tried to enter the store’s website this weekend, the truth is that it was on June 30 when AD Retail – parent company of the Abcdin and Dijon stores – put a definitive end to the commercial operations of Dijon with the closing of its last four stores.
It should be remembered that Cencosud also announced the end of the Johnson format stores in July.
“This decision was part of an orderly closing process that began in January of this year, after not finding an adequate business model that would provide sustainability over time to the clothing sales business,” said the general management AD Retail in a statement this Sunday. Thus, in July the notice was posted on the website.
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At the end of 2019, AD Retail subjected its subsidiaries to a financial reorganization procedure. Although the signs that the business was going uphill started much earlier, the controller explained at that time that the social outbreak had a strong impact on the operation of both companies, which resulted in “67 events of looting, robbery and fire in 39 stores ”. At that time, Dijon – dedicated to the sale of clothing – reported liabilities totaling US $ 140.7 million.
A few months later, it was also AD Retail’s turn to undergo a financial shakeup.
As of that date and in the following months, the company’s management and board of directors evaluated different options. In its 2019 Annual Report, AD Retail openly declared the closure of its Dijon brand. When describing the new business model that had been designed – in the middle of its liability restructuring process – among other things, he mentioned, “closing the Dijon stores operation.”
“The new plan will mean the reduction of the current chain from 74 Abcdin stores and 59 Dijon stores with a total of 78,886 m2 of sales room to only 73 Abcdin stores with a total of 33,000 m2 of sales room,” said AD Retail in its 2019 Report.
The intense competitive environment that apparel marketing faced in 2019 severely eroded Dijon’s margins. “Given that almost all the clothing supply is imported and must be committed well in advance, throughout the year it had to operate with excess inventory and promotions to be able to liquidate it,” the controller said in the same report.
It was in 2013 when AD Retail bought Dijon from the Wurman family, to integrate it into the clothing product portfolio, focused mainly on women and children.
The Dijon acquisition added 64 stores to the 81 Abcdin had that year. The plan in mind was to enhance the specialization of both brands.
However, unlike Abcdin, in recent times Dijon was a headache for the balance sheet of the parent company, with sales levels very different from those reported by the former.
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