Skip to main content

Losses at women’s clothing retailer Reitmans Canada Ltd. widened significantly during the COVID-19 pandemic, as the company was among many forced to temporarily close their doors to shoppers.

On Thursday, the Montreal-based company reported a net loss of $74.7-million or $1.53 per share in the 13 weeks ended May 2, 2020, compared to a net loss of $12.6-million or 20 cents per share in the same period last year.

Reitmans closed all of its 576 stores across the country in mid-March, and began reopening in late May.

Reitmans obtained protection from its creditors in May and is still in the midst of a restructuring process. In June, the company announced it would cut approximately 1,400 jobs, or 20 per cent of its work force, and that it would shut down its 131 Thyme Maternity and Addition Elle stores. The Thyme stores have now been shut down and Addition Elle’s closure is planned for August 15. All of the stores slated for reopening are now operational, but the company cautioned on Thursday that it is incurring additional costs due to new cleaning protocols and personal protective equipment, as well as to enforce social distancing at its stores, warehouses and offices.

Reitmans shares were delisted from the Toronto Stock Exchange on Wednesday, and the company plans to transition to trading on the TSX Venture Exchange by the second week of August.

Primarily because of the store closures, Reitmans’ first-quarter sales decreased fell 43 per cent to $104.7-million.

Reitmans has been working to conserve cash. Salaried employees that have not been furloughed or laid off permanently have faced temporary pay cuts. The company has delayed or cancelled capital spending and has cut back on its inventory by canceling or pushing back many product orders. It has also cut back on marketing and travel, and has asked for longer payment terms and “temporary price concessions” from suppliers.

But Reitmans has maintained since May that it is in need of additional financing. In a statement on Thursday, the company said that it “has no other sources of committed financing” and is in negotiations to obtain interim financing.

“This is an environment where liquidity is very, very tight. It’s also an environment where retailers are not so much in favour with the banks,” chief financial officer Richard Wait told the Globe and Mail in an interview in May.

Reitmans cautioned in its statement on Thursday that “a material uncertainty exists that may cast significant doubt about the Company’s ability to continue as a going concern and, therefore, realize its assets and discharge its liabilities in the normal course of business.”

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.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe