Fashion chain Mexx Canada has filed for bankruptcy protection from its creditors, putting in question the fate of its 95 stores amid growing uncertainty in a tough retail field.
This week, Mexx said in a court filing it plans to make a proposal under the Bankruptcy and Insolvency Act. Gilles Benchaya, partner at Richter Advisory Group, the trustee in bankruptcy, said the retailer has 30 days to come up with a restructuring plan or can ask for extensions for up to six months. In the meantime, it's business as usual, he said. Mexx officials could not be reached.
Its Dutch parent company Mexx declared bankruptcy in Amsterdam on Thursday.
Mexx joins other retailers in Canada that are struggling in an intensifying retail landscape that is feeling the pinch of big U.S. discounters such as Wal-Mart Stores Inc., Costco Wholesale, Target Corp. and Amazon.com Inc. Their expansion in this country puts pressure on incumbents to up their game.
Already this year, Jacob has filed for bankruptcy, while home décor chains Bowring, Bombay and Benix filed for court protection from creditors as they seek to restructure. Limite, a fashion chain owned by the Benitah family which also owns the home-furnishings trio of retailers, also filed for bankruptcy protection this fall.
At the same time, fashion retailers such as Reitmans (Canada) Ltd., Le Chateau Inc., Bikini Village Inc. and Danier Leather Inc. are suffering from weak results. Reitmans is closing its Smart Set stores as its parent prepares to convert some of them to its namesake and other banners.
The Mexx filing threatens to have wider repercussions because the company also supplies other chains, with the biggest one being Hudson's Bay Co. Richard Baker, chief executive officer of HBC, said he had no comment. HBC will report its third-quarter results on Tuesday.