The health pandemic has affected businesses across the globe, but for retailers that were struggling prior to mandatory closures, the situation has been especially tough. In just a few months, we’ve seen retailers like Aldo Shoes, J.Crew, Gap, and Henry’s struggle to adjust and now another Canadian retailer is succumbing to the strain.
Reitmans recently filed for creditor protection and is the latest victim of the COVID-19 pandemic.
According to CBC News, the fashion company, which owns Reitmans, Penningtons, RW&Co, Addition Elle, and Thyme Maternity, was granted protection from its creditors by a Quebec court. The law means that companies that can’t pay their bills are protected from those it owes money to.
“Filing for protection under the CCAA is truly the hardest decision we have had to make as an organization in our almost 100 years of history, but this pandemic has left us no choice,” Chief Executive Officer Stephen Reitman said. “We believe that this is the only course of action to ensure we remain successful in the future.”
Currently, there are 576 Reitmans-owned stores across Canada.
But the retailer was having problems long before the pandemic started. Over the years, Reitmans has tried to remedy its issues by shuttering stores. In 2017, the Montreal-based company announced plans to close all of its Hyba Activewear stores and prior to that in 2014, Reitmans shuttered all of its Smart Set stores. More recently, the company has been trying to lessen its footprint by closing underperforming stores, specifically its Penningtons and Addition Elle brands.
In its last fiscal year, the company’s sales fell by $53.5 million and had a net loss of $87.4 million for the year up to February 1. According to court filings, the company owes millions in rent payments for April and May and has over $100 million in debt.
“As the restructuring gets underway, the company will look to optimize its retail footprint in Canada to emerge from this process in a stronger state,” the chain said.
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