Another Canadian retailer has obtained creditor protection as the impact of the COVID-19 pandemic continues to reverberate through the industry.
Laura’s Shoppe Inc., which sells women’s clothing under the Laura and Melanie Lyne banners, announced on Friday that it intends to restructure its debts and has been granted protection under the Companies’ Creditors Arrangement Act (CCAA).
The Montreal-based retailer has 140 stores across the country and two e-commerce sites, which will remain operational during the restructuring. Like many others, Laura was forced to close stores in mid-March and did not begin reopening until June. The closures “severely impacted” sales, the company said in a statement.
"We have been in business for 90 years, and with the energy and passion of our entire team, we are confident that the company will emerge from the CCAA process even stronger and more resilient than before," chief executive officer Kalman Fisher said in a statement on Friday.
Business closures during the pandemic had a significant impact on the retail sector, and clothing stores have been hit particularly hard. Canadian retailers Reitmans Canada Ltd. and Aldo Group both filed for creditor protection in May. The following month, Reitmans announced it would close 130 Thyme Maternity and Addition Elle stores, and would cut 1,400 jobs, or 20 per cent of its work force.
Montreal-based Frank and Oak is planning to close some of its stores and refocus on e-commerce, where it began selling men’s clothing before expanding into women’s wear and opening brick-and-mortar operations. Its parent company, Modasuite Inc., filed a “notice of intention” in June to allow it to restructure its operations. Another Montreal retailer, Boutique Tristan & Iseut Inc., also filed a notice of intention last week.
Earlier this month, Montreal-based Le Chateau said it is seeking financing and negotiating with lenders, as its business faces “material uncertainties that cast significant doubt upon the company’s ability to continue as a going concern.”
Companies prepare financial statements on the assumption they will remain in business as a “going concern”; they or their auditors are required to advise shareholders if there is meaningful doubt about that. Reitmans issued a similar statement this week as it reported a $74.7-million net loss in its first quarter.
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