ICONIC CANADIAN FASHION retailer Le Château is seeking court protection from its creditors while it winds down its operations and liquidates its assets.
The Montreal-based fashion chain with 123 locations across Canada and 1,400 employees said in a release last last week that it has applied for protection from its creditors under the Companies’ Creditors Arrangement Act, or CCAA.
Closures include a London unit in White Oaks Mall. A unit located in CF Masonville Place had been previously shuttered.
In a release, management said it had “come to the very difficult decision that the company can no longer continue its operations as a going concern after having used its best efforts over the preceding months, with the assistance of professional advisers, to refinance or sell the company to a third party that would continue operating the business.”
The chain said the ongoing Covid-19 pandemic has had an “evident impact on consumer demand for Le Château’s holiday party and occasion wear, which represents the core of our offering [and] has diminished Le Château’s ability to pursue its activities. Regrettably, these circumstances leave the company with no option other than to commence the liquidation process.”
In the three-month period up until July 25, Le Château racked up just $14.7 million in sales across its network of stores and online. That’s down from almost $50 million in the same period last year. As of July, the company says it had about $118 million in assets, against $201 million worth of liabilities.
The chain is just the latest Canadian retail brand to file for CCAA amid Covid-19, including clothier Reitmans, drink seller DavidsTea, outdoor gear sellers MEC and Sail, fashion chain Mendocino, the company that owns Ricki’s Cleo and Bootlegger, and shoe retailer Aldo.
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