Burlington-based West 49 Inc. managed to turn around its fortunes in Ontario but still posted a second-quarter loss of $1.8 million, up from $500,000 a year ago.

"The fact that sales are up in Ontario is good. It's been lagging compared to the rest of the country," said spokesperson Trevor Heisler.

Comparable store sales increased 3.9 per cent on a consolidated basis, including growth of 6.2 per cent at West 49 branded stores, and representing the strongest performance in the past year and a half.

Comparable West 49 stores in Ontario contributed to the 5.2 per cent growth -- the strongest performance in three quarters, Heisler said .

West 49 CEO Sam Baio blamed some of the losses on cross-border shopping. The chain also had to absorb $500,000 in general expenses and mandatory minimum wage increases across many provinces.

Canadian clothing stores, particularly those in Ontario which has suffered manufacturing job losses, have felt the pinch despite clever marketing and product development.

Yesterday, Montreal-based Reitmans' second quarter results (ending in August) showed a slight overall sales decrease.

The company blamed poor summer weather and reduced consumer confidence.

Kaileen Millard, a retail fashion analyst with the NPD Group in Toronto, said cross-border shopping is hurting Canadian retailers -- along with an increase in e-shopping.

But she said retailers such as West 49 have great opportunities. For example, West 49's consumers are divided between nine- to 13-year-olds and 14- to 24-year-olds, with the younger group driving the chain's growth in the past year.

Along the way, though, West 49 has also managed to capture younger and "big" kids -- adults who love the branded and private label clothes and boarder lifestyle West 49 is identified with.

However, Millard said while Reitmans has solidified its consumer groups through a solid set of stores such as Reitmans, RW & Co. and Cassis, West 49 may be spreading itself too thin over too many names, including Arsenic/Amnesia, Billabong, Off The Wall, D-Tox and Duke's Northshore.

lmarr@thespec.com

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