Advertisement
Advertisement

Reitmans Files for and Obtains Bankruptcy Protection

Date:

Share post:

Iconic Canadian retailer Reitmans, which has been in existence for close to 100 years, has obtained protection under the Companies’ Creditors Arrangement Act to “facilitate its operational, commercial, and financial restructuring” as it reacts to the negative impact of the COVID-19 (coronavirus) pandemic.

The company, which is a leading ladies apparel retailer with retail outlets throughout Canada, employs approximately 6,800 people and operates 576 stores consisting of 259 Reitmans, 106 Penningtons, 80 RW & CO., 77 Addition Elle, and 54 Thyme Maternity.

“Filing for protection under the CCAA is truly the hardest decision we have had to make as an organization in our almost one hundred years of history, but this pandemic has left us no choice – we believe that this is the only course of action to ensure we remain successful in the future,” said Stephen Reitman, President and Chief Executive Officer of Reitmans, and grandson of the company’s founders, in a statement.

PHOTO: MALL CHAMPLAIN

“We have many strengths: we’re the Canadian leader in specialty retail, we have a strong leadership team and talented employees, great national brands, an omnichannel retail strategy with robust online sales, and most importantly, loyal customers who have been shopping on our websites at a record pace since the start of the pandemic. We will dedicate ourselves to the restructuring of our business, and then we’ll carry on with what we do best: offering affordable fashion and great service to our customers and communities for many years to come.”

The news on Tuesday comes as many retailers across North America struggle with the devastating impact the pandemic is having on the sector. Also on Tuesday, Pier 1 Imports announced that it has filed a motion seeking Bankruptcy Court approval to begin an orderly wind-down of the company’s retail operations as soon as reasonably possible after store locations are able to reopen following the government-mandated closures during the COVID-19 pandemic. J.C. Penney also announced recently it will permanently close nearly 30 percent of its 846 stores as part of a restructuring plan under bankruptcy protection.

Bruce Winder, a retail analyst at Bruce Winder Retail, said this period is the acceleration of retail as a number of forces being felt in retail before the pandemic were hurting companies like the ones that are going bankrupt right now.

“What this has done is this has accelerated those changes. You look at some of the stores that are closed that are going for it (creditor protection and bankruptcy) they were weak anyways. The value proposition was weak. They were not best in class. A lot of them have huge debt on their balance sheet because they were owned by venture capital or private equity,” said Winder. “So they didn’t have the balance sheet to weather the storm. Their business model was outdated. In other words, it wasn’t sort of modern and contemporary.

“So they were going to fall anyway. All this did is push them over the edge quicker.”

Winder said more of this will be taking place in the coming days, weeks and months.

“Sadly you’re going to start to see more of this happen in the next few weeks and even months and it’s all a function of how strong is their balance sheet, how patient are their investors, and where do they fall from a category standpoint. This year will be the story of bankruptcies in Canada, in the U.S. and around the world where you’re seeing the brands who are weaker, the brands who have poor balance sheets, old business models, many of them, not all, are going to have to close down and enter Chapter 11 (U.S.) or in our case (Canada) CCAA.

PHOTO: REITMANS
PHOTO: REITMANS FACEBOOK

“It doesn’t mean that they’re all gone. Some of them will come out of it leaner and meaner but I would suggest that most won’t.”

In a news release, Reitmans said the CCAA process will allow the company to implement a restructuring plan that addresses the impacts of COVID-19 in order to build a more resilient organization that will be positioned for long-term success.

“Throughout this process, the Company will remain fully operational through its brands’ e-commerce websites; all physical stores will re-open in conformity with provincial and regional governmental guidelines. As the restructuring gets underway, the Company will look to optimize its retail footprint in Canada to emerge from this process in a stronger state,” it said.

PHOTO: REITMANS

“The retail landscape has been in constant flux over the past several years, resulting in the evolution of consumer behaviour and purchasing patterns. Reitmans has implemented a successful digital-first strategy, amongst other omnichannel initiatives, to drive sustainable growth in this evolving retail environment. However, the COVID-19 pandemic forced the closure of all retail stores, and pushed the retail industry into a new and unknown era.

“In conjunction with its filing under the CCAA, the Company has undertaken a process to secure an interim financing (DIP) that shall provide the required liquidity to meet all of the anticipated needs of Reitmans and its brands to continue normal operations following the opening of its retail locations and throughout the CCAA process. Reitmans is also in discussion with lenders with respect to a permanent financing upon exit from the restructuring process.”

In its fiscal year 2020 which ended February 1, Reitmans reported sales decreased by $53.5 million or 5.8 percent, to $869.5 million from fiscal year 2019. Net loss for fiscal 2020 was $87.4 million ($1.56 basic and diluted loss per share) as compared with $6.8 million net earnings ($0.11 basic and diluted earnings per share) for fiscal 2019.

Michael Kehoe, Lead Ambassador in Canada for the New-York based International Council of Shopping Centers, called the Reitmans’ court protection a significant event on the Canadian retailing scene.

“The firm has been a pillar within the retailing fabric of the country for a generation and the problems they face are common in these challenging economic times. The firm had faced challenges in the recent past related to unproductive locations, high rents, changing shopping patterns and shifting demographics,” said Kehoe, a veteran of more than 40 years in the industry and broker/owner of Fairfield Commercial Real Estate in Calgary.

“The face of shopping centres in Canada will be forever changed as fashion mainstays like Reitmans with their numerous retail banners will emerge from restructuring with a significantly reduced footprint. Retailing is always changing and evolving and Reitmans will carry on in an era of the omnichannel environment.”

2 COMMENTS

  1. Reitman’s bankruptcy, and their subsequent shuttering of Addition-Elle is going to have a bigger impact than I believe most are aware. The average Canadian woman is a size 16. Very few "standard size" retailers carry 16 or above. If you’re a size 20 or above, it’s Penningtons or Addition-Elle (Laura Plus is hard to find, poorly stocked, and very expensive for fabrics that don’t warrant it. Or crossing the border for admittedly MUCH better selection and quality.
    So, if Addition-Elle, and Penningtons close, the plus size woman is forced to shop outside Canada unless a newer option appears.
    Now, both stores have been dropping the ball significantly for a long time. They’ve been trying to sell cheap synthetics that wear poorly and fit worse. They offer almost nothing for the profesional woman who prefers not to wear shredded pants, "sexy" tops that are skin tights with holes all over, or "bodycon", a sad euphemism for poorly cut ad cheating on fabric.
    Plus size wmen need a store where we can go and be sure of finding what we need: quality cotton, linen, or wool trousers, cut well and attractive. Blouses or well made knit tops or sweaters in natiral fibers and attractive styles. Tailored jackets. Quality jeans. Lingerie selection that offers both workaday practicality and date night sexy.
    It’s a tough role to fill because the plus size body varies greatly and is not as easy to cut for as a curveless size 2. A savvy retailer would see this as a golden opportunity.

  2. There is a store in Edmonton, Alberta named Fashion Addition whose clothes I love. I am a plus size and they have casual (Columbia), dress and work style clothes. But unfortunately they are only in western Canada. Would be nice if they expanded to major cities, ie Ottawa, in eastern Canada. Claire France has always been a favourite and fortunately they have retained some of their stores. Their clothes are also for the plus size and they carry casual and dress styles of good quality. I am hoping Pennington’s stays open, was very disappointed when Addition-Elle closed their stores.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

More From The Author

Italian Grocery-Restaurant Concept Lina’s Prepares to Open 15,000 sq ft Location in Calgary’s Inglewood [Photos/Interview]

The expanding business is based on the concept of an Italian public square or marketplace, making it a popular hub that has strong consumer loyalty.

Zellers to Launch Food Trucks in Effort to Drive Traffic to Bay Stores

The retailer has also all but confirmed the relaunch to the Zeddy teddy bear mascot as it prepares to open 25 locations inside of Hudson’s Bay stores this spring.

Cineplex Launches New ‘Junxion’ Entertainment Concept with Additional Canadian Locations Planned [Interviews]

The concept features movies, gaming, dining and live entertainment under one roof, with plans to roll it out to multiple Canadian markets this year as part of a growth strategy for Cineplex.

Queen Street West Retailers in Toronto Anxious about Metrolinx Ontario Line Construction [Interviews]

Construction has the community worried that they’ll experience a repeat of Eglinton line ‘nightmare’.

Ron White Marks 25th Anniversary of its Charity ‘Shoe Drive’ [Interview]

The Toronto-based brand, which has stores in the area, is taking in gently used footwear that still have life in them to give to those in need.

Supply Chain Issues for Canadian Retailers Expected into 2025: Expert

Various factors are contributing to ongoing challenges to coordinate the optimal availability of goods says Gary Newbury.

DTC Jewellery Brand Mejuri Continues Ongoing Expansion with More Stores in Key Canadian Markets [Interview]

Calgary and Montreal are the latest cities to see openings for the popular jewellery brand which is looking to gain market share with a growing loyal client base.

Subway Strategically Increasing Pace of Canadian Location Expansion [Interview]

Subway Canada will open double the amount of stores from last year while it also renovates other locations with new innovations to enhance the consumer experience.

Big Box Outlet Store to Expand Outside of BC with 1st Alberta Location Amid Rapid Growth [Interview]

Western Canada's leading liquidator gets its goods from Costco, Target and Amazon, and consumers are embracing the concept as inflation hits the country.

Miami-Based ‘Woof Gang Bakery & Grooming’ Entering Canada with 1st Store and Plans for Many More [Interview]

The leading pet service franchise brand is expanding into Canada with aggressive expansion plans that could make it a household name.

Video Interview: What’s The State Of The Franchising Industry In Canada Today?

An industry expert talks about where the interest in franchising comes from, the top categories, and other trends in the industry.

Herschel Supply Co. to Open Several New Stores This Year Amid Expansion [Interview]

The popular Vancouver-based lifestyle and accessory brand is seeing success with its first stores and will open more, including in the resort town of Banff Alberta.

Promotions and Loyalty Strategies that Win During Difficult Economic Times [Op-ed]

The founder of GetintheLoop provides insights into what strategies work to engage and reward customers.

Canadian Travel Lifestyle Brand Monos to Open 1st Permanent Store this Spring with More Planned [Interview]

The Vancouver-based brand's direct-to-consumer strategy will include multiple store locations following a successful pop-up at Stackt Market.

Halifax ReTales Tallies Number of Store Openings and Closings in 2022 with Surprising Findings [Interview]

Arthur Gaudreau says that population growth in the Halifax area will lead to positive fundamentals for 2023.

Promenade Shopping Centre in Thornhill to be Redeveloped into Vibrant Urban Centre [Renderings/Exclusive Interview]

The transformational mixed-use development will include new retail to serve the area, amenities, and thousands of multi-family residences for the rapidly growing community.

Rapidly Growing Canadian Outerwear Brand FREED Opening Multiple Pop-Ups as Business Expands

The historic Winnipeg-based brand, known particularly for its plush colourful faux-fur vegan coats, is now run by the founder’s granddaughter who has plans to take FREED to the next level.

Quebec-Based Sneaker and Streetwear Retailer Centrall Launches Store Expansion with Plans for New Locations [Interview]

The retailer carries rare and popular styles of sneakers and has found a cult following in the province, prompting Centrall to grow its store count.

‘Rough Ride Ahead’ for Retailers in Canada as Reality Sets In: Doug Stephens

The leading retail analyst sat down with Retail Insider to discuss a “cornucopia” of challenges retailers in Canada are facing following pandemic disruptions.

Zellers will have Uphill Battle to be Successful and Drive Profits for HBC: Expert [Interview]

Competition, a questionable real estate strategy and challenges in the value-price category are among the headwinds for the re-introduction of the Zellers brand to Canada says Bruce Winder.

RECENT RETAIL INSIDER VIDEOS

Advertisment

Subscribe to the Newsletter

RECENT articles

Italian Grocery-Restaurant Concept Lina’s Prepares to Open 15,000 sq ft Location in Calgary’s Inglewood [Photos/Interview]

The expanding business is based on the concept of an Italian public square or marketplace, making it a popular hub that has strong consumer loyalty.

Zellers to Launch Food Trucks in Effort to Drive Traffic to Bay Stores

The retailer has also all but confirmed the relaunch to the Zeddy teddy bear mascot as it prepares to open 25 locations inside of Hudson’s Bay stores this spring.

Cineplex Launches New ‘Junxion’ Entertainment Concept with Additional Canadian Locations Planned [Interviews]

The concept features movies, gaming, dining and live entertainment under one roof, with plans to roll it out to multiple Canadian markets this year as part of a growth strategy for Cineplex.

Queen Street West Retailers in Toronto Anxious about Metrolinx Ontario Line Construction [Interviews]

Construction has the community worried that they’ll experience a repeat of Eglinton line ‘nightmare’.

Ron White Marks 25th Anniversary of its Charity ‘Shoe Drive’ [Interview]

The Toronto-based brand, which has stores in the area, is taking in gently used footwear that still have life in them to give to those in need.

Supply Chain Issues for Canadian Retailers Expected into 2025: Expert

Various factors are contributing to ongoing challenges to coordinate the optimal availability of goods says Gary Newbury.

DTC Jewellery Brand Mejuri Continues Ongoing Expansion with More Stores in Key Canadian Markets [Interview]

Calgary and Montreal are the latest cities to see openings for the popular jewellery brand which is looking to gain market share with a growing loyal client base.

Subway Strategically Increasing Pace of Canadian Location Expansion [Interview]

Subway Canada will open double the amount of stores from last year while it also renovates other locations with new innovations to enhance the consumer experience.

Big Box Outlet Store to Expand Outside of BC with 1st Alberta Location Amid Rapid Growth [Interview]

Western Canada's leading liquidator gets its goods from Costco, Target and Amazon, and consumers are embracing the concept as inflation hits the country.

Miami-Based ‘Woof Gang Bakery & Grooming’ Entering Canada with 1st Store and Plans for Many More [Interview]

The leading pet service franchise brand is expanding into Canada with aggressive expansion plans that could make it a household name.

Video Interview: What’s The State Of The Franchising Industry In Canada Today?

An industry expert talks about where the interest in franchising comes from, the top categories, and other trends in the industry.

Herschel Supply Co. to Open Several New Stores This Year Amid Expansion [Interview]

The popular Vancouver-based lifestyle and accessory brand is seeing success with its first stores and will open more, including in the resort town of Banff Alberta.

Promotions and Loyalty Strategies that Win During Difficult Economic Times [Op-ed]

The founder of GetintheLoop provides insights into what strategies work to engage and reward customers.

Canadian Travel Lifestyle Brand Monos to Open 1st Permanent Store this Spring with More Planned [Interview]

The Vancouver-based brand's direct-to-consumer strategy will include multiple store locations following a successful pop-up at Stackt Market.

Halifax ReTales Tallies Number of Store Openings and Closings in 2022 with Surprising Findings [Interview]

Arthur Gaudreau says that population growth in the Halifax area will lead to positive fundamentals for 2023.

Promenade Shopping Centre in Thornhill to be Redeveloped into Vibrant Urban Centre [Renderings/Exclusive Interview]

The transformational mixed-use development will include new retail to serve the area, amenities, and thousands of multi-family residences for the rapidly growing community.

Rapidly Growing Canadian Outerwear Brand FREED Opening Multiple Pop-Ups as Business Expands

The historic Winnipeg-based brand, known particularly for its plush colourful faux-fur vegan coats, is now run by the founder’s granddaughter who has plans to take FREED to the next level.

Quebec-Based Sneaker and Streetwear Retailer Centrall Launches Store Expansion with Plans for New Locations [Interview]

The retailer carries rare and popular styles of sneakers and has found a cult following in the province, prompting Centrall to grow its store count.

‘Rough Ride Ahead’ for Retailers in Canada as Reality Sets In: Doug Stephens

The leading retail analyst sat down with Retail Insider to discuss a “cornucopia” of challenges retailers in Canada are facing following pandemic disruptions.

Zellers will have Uphill Battle to be Successful and Drive Profits for HBC: Expert [Interview]

Competition, a questionable real estate strategy and challenges in the value-price category are among the headwinds for the re-introduction of the Zellers brand to Canada says Bruce Winder.