February 18, 2020
Stokes, a Montreal, Quebec-based tableware, kitchenware, and home décor retailer with 147 stores across Canada, filed an NOI on February 18, listing $22.9 million in liabilities, including $9.7 million to Scotiabank and $2.3 million to HSBC. For the last few years, the company has been experiencing financial difficulties due to increasing competition from large-scale and online retailers; successive minimum wage increases across Canada; and high cost of rent in various locations. In 2019, the company reported financial losses of approximately $4.5 million, which were mainly attributable to operational issues following the implementation of a new warehouse management system. These issues led to a significant increase in the company's borrowings and a breach of certain loan covenants with Scotiabank. In order to reduce its retail footprint and streamline head office operations, the company intends to close 43 stores and liquidate inventory, furniture, and equipment located in the closing stores. FAAN Advisors has been retained as Chief Restructuring Advisor. Tiger and Great American will jointly assist with the inventory liquidation. Richter is the proposal trustee. Osler is counsel to the company.