Canadian retail giant Reitmans recently announced it has emerged from its restructuring proceedings through the Companies’ Creditors Arrangement Act and its President Stephen Reitman said he’s confident that its brands (Reitmans, Penningtons and RW&Co.) will flourish.
“We now begin a new chapter in our company’s almost 100-year history,” wrote Reitman in a publicly-released letter. “We remain a proudly owned and operated Canadian company, committed to serving millions of people across this country.”
Reitmans had filed for creditors’ protection on May 19, 2020.
In a recent news release, the retailer said it has paid to the Monitor appointed under the CCAA process, Ernst & Young Inc., the aggregate amount of $95 million with the Plan of Arrangement. It also announced it had entered into a senior secured asset-based revolving facility of up to $115 million with Bank of Montreal.
“The Credit Facility has a term of three years. Funds advanced under the Credit Facility will be used, among other things, to finance the amounts payable under the Plan of Arrangement and to fund Reitmans’ working capital needs and for its ongoing general corporate purposes, including new store openings and renovations,” said the retailer.
“As many of you know, Reitmans (Canada) Limited has been a family-run business based in Montreal for over ninety years,” wrote Stephen Reitman. “During this time, our organization has confronted difficulties and experienced great success. I have always been extremely proud of how our employees and leadership team have handled these ups and downs, and the resilience they have demonstrated.
“Nothing could have prepared us for the challenges we faced in the beginning of 2020.
“With the start of the pandemic and the temporary closing of all 575 of our retail stores in March, we became completely reliant on our e-commerce business. It became clear that we would have to change our business model due to the uncertainty of when our stores would reopen. On May 29, 2020 we entered the Companies’ Creditor Arrangement Act (CCAA) in order to restructure the company and modify our work methods and processes. We were forced to close two beloved brands, Thyme Maternity and Addition Elle, and we made the painful decision to let go many dedicated and hard-working employees.”
In December, the company released its financial results for the third quarter of its fiscal 2022, ending October 30.
Sales for the third quarter of 2022 increased by $14.8 million, or 9.1 per cent, to $178.2 million, primarily due to an increase in store traffic and number of transactions, as customers transitioned back to a “brick and mortar” shopping experience, it said.
Gross profit for the third quarter of 2022 increased $19.8 million to $101.4 million as compared with $81.6 million for the third quarter of 2021. Gross profit as a percentage of sales for the third quarter of 2022 increased to 56.9 per cent from 49.9 per cent for the third quarter of 2021.
“The increase both in gross profit and as a percentage of sales is primarily attributable to lower markdowns and promotional activity in the third quarter of 2022 combined with a favourable foreign exchange impact on U.S. dollar denominated purchases included in cost of goods sold, partially offset by higher merchandise freight costs as the global shipping industry disruption required an increased usage of air freight shipments to meet customer demand,” said the retailer.
In his letter Stephen Reitman said: “When I reflect upon our experiences over the last 22 months, I am struck by the number of people, both within and outside of our organization, who enabled us to emerge successfully from CCAA, and who have supported us during this most difficult time.
“While the uncertainty of Covid-19 may continue, I am confident that Reitmans (Canada) Limited and our brands, Reitmans, Penningtons and RW&CO., will flourish. I look to the future with hope and optimism for us all, our partners and our valued customers.”