October 23, 2020
Le Château Inc. (TSX:CTU), a Montreal, Quebec-based fashion retailer with a 60-year history and 121 stores across Canada, obtained protection under the CCAA on October 23, listing approximately $125.0 million in liabilities, including $21.2 million in deferred rent owing to landlords, and $81.0 million in assets. In the three-month period up until July 25, the company made $14.7 million in sales across its network of stores and online, down from $50 million in the same period last year. Since 2015, the company's network had already been reduced by almost 50% to adapt to the changing retail landscape and consumer shopping habits. The ongoing COVID-19 pandemic further impacted consumer demand for the company's holiday party and occasion wear, which represents the core of the company's business. Despite re-opening its stores, the company's brick-and-mortar operations continue to be negatively impacted by COVID-19 safety measures. While the company intends to remain fully operational as it liquidates its stores, eventual closures will mean the termination of approximately 1,400 jobs. During these CCAA proceedings, the company will receive interim financing from Wells Fargo Capital Finance Corp. Canada. PwC was appointed monitor. Counsel is Stikeman Elliott for the company, Norton Rose Fulbright for Wells Fargo, Osler for the monitor, McCarthy Tétreault for Gordon Brothers Finance and Fasken for Gordon Brothers and Hilco.