Reitmans Canada Ltd. is cutting approximately 1,400 jobs – 20 per cent of its work force – and shutting down its Thyme Maternity and Addition Elle banners as part of the Canadian apparel retailer’s restructuring plans.
The Montreal-based company announced on Monday that it will narrow its focus to three retail brands – Reitmans, Penningtons and RW & Co. – and will close stores to “optimize its retail footprint." Thyme Maternity and Addition Elle make up 131 of the company’s 576 stores across Canada, and will shut down permanently over the summer. The company also has plans to close some underperforming stores in its three remaining banners, but has not confirmed how many.
The job cuts include approximately 1,100 staff in stores and 300 at head office. The company has about 6,800 employees.
Reitmans was struggling with long-term challenges even before the shock of the COVID-19 pandemic. It is now in the midst of a restructuring process that began on May 19 when it obtained creditor protection under the Companies’ Creditors Arrangement Act (CCAA).
The retailer’s shares were halted for trading on the Toronto Stock Exchange as a result of the restructuring announcement. Reitmans’ class A stock has collapsed over the past year, and last traded at 8 cents per share on May 15.
In the fiscal year ended Feb. 1, Reitmans reported a net loss of $87.4-million on sales of $869.5-million.
“We know that when we come out of this process, we want to be more agile. We want to be better-sized,” chief executive Stephen Reitman told The Globe and Mail at the time.
The company has been seeking interim financing as part of the restructuring process. Those discussions are continuing, and the company is “in what we believe to be the final stage of securing financing,” a spokesperson said on Monday.
Reitmans had been working to improve the performance of its retail businesses before the pandemic hit, but it “can no longer afford the required resources to bring them back to profitability,” Mr. Reitman said in a statement on Monday.
Thyme Maternity and Addition Elle stores closed during the pandemic will reopen in the coming weeks according to provincial guidelines, and will begin liquidating inventory. The Thyme stores will permanently close on July 18, and Addition Elle stores will close Aug. 15.
The company will expand its products at plus-size banner Penningtons in an attempt to retain Addition Elle shoppers after the stores close. “We are committed to the plus-size market in Canada with both a size-inclusive offering at Reitmans, and dedicated expertise and service at Penningtons,” Mr. Reitman said in the statement.
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