Putman Investments Buys Ricki’s and Cleo from Comark

An Ontario court has granted approval for Comark Holdings Inc. to sell its struggling Ricki’s and Cleo apparel banners to Putman Investments Inc., the retail group behind Toys “R” Us Canada and HMV, among others. The deal, valued at approximately $12.8 million, includes the brands’ inventory, furnishings, intellectual property, trademarks, and select store leases.

The sale offers a lifeline to Ricki’s and Cleo, both of which have been under significant financial strain in recent years. The court approval also paves the way for Comark to explore options for its third brand, Bootlegger, with Winnipeg-based Warehouse One emerging as a potential buyer.

Putman Investments Expands Retail Portfolio

The acquisition aligns with Putman Investments’ strategy of acquiring distressed retail brands and attempting to revitalize them. Led by entrepreneur Doug Putman, the Ancaster, Ontario-based company has steadily expanded its retail holdings, purchasing Sunrise Records in 2014, HMV in 2019, Toys “R” Us Canada in 2021, and most recently, womenswear retailer Northern Reflections earlier this year.

In the apparel space, Putman has taken over Northern Reflections and now Ricki’s and Cleo. His past ventures include acquiring and rebranding 45 former DavidsTea locations into T. Kettle, though the chain now operates only two locations. His Rooms + Spaces concept, which sought to capitalize on Bed Bath & Beyond’s closure, has also shut down after struggling to gain traction in the home goods market.

Job Retention and Store Footprint Adjustments

While Comark has been liquidating Ricki’s and Cleo locations under its court-supervised restructuring, the acquisition by Putman means that many retail employees will be offered continued employment. Comark employs 2,056 workers across its three brands, though the exact number of jobs retained under the new ownership remains uncertain.

The future footprint of Ricki’s and Cleo is also unclear, with Comark currently operating 75 Ricki’s stores, 54 Cleo locations, 20 combined locations, and 19 locations shared between these two brands and Bootlegger. The court ruling indicates that the businesses will continue under Putman with a “reduced footprint,” suggesting some store closures or lease renegotiations may follow.

Comark’s Financial Troubles and Creditor Protection

Comark filed for creditor protection last month, citing several major financial setbacks, including:

• The impact of the COVID-19 pandemic on consumer shopping habits
  
• A 2021 ransomware attack that disrupted operations
  
• Increased competition from ultra-low-cost retailers such as Shein and Temu
  
• Supply chain and vendor challenges
  

In an affidavit filed in court, Comark CEO Shamsh Kassam stated that despite cost-cutting efforts, the company’s liquidity position had “rapidly deteriorated,” particularly in the slower post-holiday season. These challenges ultimately led the company to seek buyers for its struggling brands.

Warehouse One Eyes Bootlegger Purchase

Alongside the Ricki’s and Cleo sale, Comark is exploring the sale of Bootlegger through a stalking horse bid process, where an initial bidder sets the floor price for other potential offers. Winnipeg-based Warehouse One, owned by Stern Partners, has emerged as the stalking horse bidder.

Interested parties have until Thursday to submit competing bids. If no alternative offers materialize, Comark will seek court approval to sell Bootlegger to Warehouse One, which plans to maintain at least 25 of Bootlegger’s current 53 stores. However, the financial terms of Warehouse One’s bid have not been disclosed.

Ronald Stern’s Connection to Comark

Stern Partners, which owns Warehouse One, also has direct ties to Comark itself. Government business registry filings indicate that Ronald Stern, founder and president of Stern Partners, is a director and major shareholder of a numbered company that wholly owns Comark. Stern Partners also owns Tip Top Tailors, Urban Barn, Silver Jeans Co., and Mr. Big & Tall.

Stern Partners has not publicly commented on its involvement in Comark’s restructuring or why Putman Investments did not bid on Bootlegger, despite acquiring the other two brands.

Putman Investments’ Growing Retail Footprint

Doug Putman has made a name for himself by acquiring struggling but recognizable retail brands. His retail empire started in 2014 with the purchase of Sunrise Records, expanding into HMV and Toys “R” Us Canada.

In the apparel space, Putman has taken over Northern Reflections and now Ricki’s and Cleo. His past ventures include acquiring and rebranding 45 former DavidsTea locations into T. Kettle, though the chain now operates only two locations. His Rooms + Spaces concept, which sought to capitalize on Bed Bath & Beyond’s closure, has also shut down after struggling to gain traction in the home goods market.

More from Retail Insider:

• Putman Investments Acquires Northern Reflections
• Comark to Close Cleo and Ricki’s Chains Amid Challenges
• Doug Putman Acquires Bed Bath & Beyond Leases