Canadian Retailer Roots (ROOT) Considers Putting Itself Up for Sale as Stock Dwindles

Clothing company Roots ROOT +4.65% ▲ , which is viewed as an iconic retail brand in its native Canada, has launched a review of strategic alternatives, including a potential sale, to maximize shareholder value.

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In a written statement, the company said its board or directors is analyzing a range of options, including the sale of the retailer. Established in 1973, Roots currently has more than 100 retail stores in Canada and two locations in the neighboring U.S.

The company also operates more than 100 partner stores across Asia, including in China. Management said they remain focused on acting in the best interests of the retailer and maximizing shareholder returns. ROOT stock is flat (up 0.33%) over the last three years.

Roots’ Long-Term Struggles

Roots has struggled with dwindling sales coming out of the Covid-19 pandemic and an inability to sell its brand to consumers outside of Canada. The company has reported successive quarters of net losses in recent years and its stock has stagnated.

Despite its ongoing struggles, Roots remains an iconic company within Canada. It features a beaver on its logo, one of Canada’s national symbols, and it has designed the uniforms for Canada’s Olympic athletes in the past. Nevertheless, Roots is one of several Canadian retailers to run into trouble in recent years. Recently, the iconic Hudson Bay Company filed for bankruptcy after nearly 500 years in existence.

Is ROOT Stock a Buy?

Not enough analysts cover Roots’ stock, so instead we’ll look at a three-month performance of its share price. As one can see in the chart below, ROOT stock has declined 11.73% over the past 12 weeks.

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