After 60 years in operation, Le Chateau Inc. is seeking court protection from creditors to allow it to liquidate its assets and close its stores.
The Montreal-based company said Friday that it has spent much of the COVID-19 pandemic trying to refinance or sell the business to a third party that would keep it in operation, but was unsuccessful.
“Its already evident impact on consumer demand for Le Chateau’s holiday party and occasion wear, which represents the core of our offering, has diminished Le Chateau’s ability to pursue its activities,” the company said.
“Regrettably, these circumstances leave the company with no option other than to commence the liquidation process.”
The embattled clothing retailer saw its sales plunged to $14.6 million in the three months ending July 25, down from $49.7 million a year earlier.
The company’s application for protection from creditors under the Companies’ Creditors Arrangement Act (CCAA) will be heard by a Quebec court on Friday.
Le Chateau said it intends to remain fully operational as it liquidates its 123 stores, but the eventual closures will mean the end of about 1,400 jobs – 500 at its head office and 900 at stores.
“We regret the impact this will have on our people and can assure you that we explored all options available to us prior to taking this difficult decision,” the company said.
Le Chateau expects Gordon Brothers Canada ULC and Merchant Retail Solutions ULC to be appointed as consultants to implement the liquidation and PricewaterhouseCooper Inc. to become its monitor in CCAA proceedings.
If Le Chateau’s CCAA application is granted, the company will obtain interim financing from Wells Fargo Capital Finance Corp. Canada to help it fund post-filing working capital requirements.
The company’s application comes after several other Canadian retailers have shuttered or downsized operations in the wake of the pandemic.
Reitmans Canada Ltd., Aldo Group Inc., DavidsTea Inc., Mountain Equipment Co-operative, Moores the Suit People Corp. and Laura’s Shoppe Inc. are among the dozens of retailers that have all filed for CCAA.
A list of some of the companies that have taken steps under the Companies’ Creditors Arrangement Act or Bankruptcy and Insolvency Act since the beginning of the pandemic:
Oct. 23: Le Chateau Inc. (apparel retailer)
Sept. 14: Mountain Equipment Co-operative (outdoor recreation retailer MEC)
Sept. 8: Groupe Dynamite (Garage and Dynamite apparel retailer)
Sept. 8: Geox Canada Inc. (footwear retailer)
Sept. 4: Ernest Enterprises (Mtl) Ltd. (men’s suits and leisurewear retailer)
Aug. 20: SFP Canada Ltd. (Papyrus, Carlton Cards, and Paper Destiny retail stores)
Aug. 17: TA Hotel Management Ltd. Partnership (food and accommodation owner of Vancouver’s Trump International Hotel)
Aug. 5: Moores the Suit People Corp. (men’s business clothing and formalwear retailer)
July 31: Chico’s FAS Canada, Co. (Chico’s and White House Black Market women’s clothing and accessories retailer)
July 31: Laura’s Shoppe Inc. (Laura and Melanie Lyne clothing retailer)
July 27: Stokes Inc. (Kitchenware and home decor retailer)
July 23: Ann Canada Inc. (Ann Taylor and LOFT women’s clothing brands)
July 22: Bo Bebe (baby products retailer)
July 21: Boutique Tristan & Iseut Inc. (clothing retailer)
July 14: Mendocino Clothing Company Ltd. (fashion apparel retailer)
July 8: DavidsTea Inc. (beverage retailer, wholesaler)
July 6: Lucky Brand Dungarees Canada (denim retailer)
June 30: Cirque Du Soliel Canada Inc. (entertainment)
June 29: GNC Holdings (health and wellness products retailer)
June 22: Modasuite Inc. (Frank and Oak clothing retailer)
June 19: Northern Pulp Nova Scotia Corp. (forestry)
June 8: Coalision Inc. (activewear and lifestyle apparel brand Lole)
June 3: Comark Holdings (clothing brands Ricki’s, Cleo and Bootlegger)
June 2: Sail Outdoors Inc. (outdoor sports retailer)
May 19: Reitmans (Canada) Ltd. (clothing retailer Reitmans, Penningtons, RW & CO., Addition Elle and Thyme Maternity)
May 15: Entrec Corp. (transportation)
May 8: Flighthub Group Inc. (travel)
May 7: Aldo Group Inc. (footwear retail)
May 1: Cranbrook Glen Enterprises Ltd. (camera and accessories retailer Henry’s)
April 27: Foodora Inc. (online food-delivery service company)
April 22: Dominion Diamond Mines ULC (mining)
April 16: Marche Restaurants (Movenpick Cafe restaurant)
April 14: Delphi Energy Corp. (energy)
March 31: CannTrust Holdings Inc. (cannabis)