Retailer Le Chateau is seeking court protection from its creditors, but will close its operations and terminate its assets.
The Montreal-based fashion chain with 123 positions and 1,400 employees across Canada said in a statement released Friday that it has applied for protection from its lenders under the Companies Lenders Arrangement Act or CCAA.
In a statement, the company’s management said it had “come to the” most difficult decision “in the previous months, with the help of professional advisers, to refinance, after using its best efforts in previous months to worry that the company could no longer continue its operations.
The ongoing COVID-19 pandemic has had a clear impact on consumer demand for Le Chateau’s Holiday Party and occasional costumes, representing a major part of our offering [and] Reduces Le Chateau’s ability to continue its operations. Sadly, these conditions leave the company with no choice but to initiate the liquidation process. “
The retailer is scheduled to hold its annual general meeting in Montreal on Thursday, but the company canceled the event two days earlier without further explanation, saying it would “provide more updates at the scheduled time”.
In the three months to July 25, Le Chateau achieved just 7 14.7 million sales on its store network and online. It dropped from nearly 50 million during the same period last year. As of July, the company had assets of $ 8,118 million and liabilities valued at $ 201 million.
At the time, the chain thanked its landlords for granting rental relief worth $ 6 4.6 million for July and August. However, it still warns that there is some doubt about the chain’s potential to continue as an ongoing concern for the next 12 months.