Chico’s FAS Canada, Co. (“Chico’s Canada”)

Chico’s FAS Canada, Co. ("Chico's Canada"), which operates stores in Southern Ontario under the Chico’s and White House Black Market names, filed for bankruptcy on July 31. The bankruptcy process will result in the closure of four Chico’s and six White House Black Market boutiques in Ontario, which have remained closed since March 17 due to the COVID-19 pandemic. The closure of the Canadian boutiques is part of the company’s ongoing cost-savings measures taken to mitigate the impact of the COVID-19 pandemic and address the operational and financial challenges associated with operating in Canada. Chico’s Canada will transition to a digital-only business in Canada. KSV is the bankruptcy trustee. Counsel is Paliare Roland for the bankruptcy trustee and Osler for Chico’s Canada and its parent, Chico’s FAS, Inc..

Laura’s Shoppe Inc.

Laura's Shoppe Inc., a Montreal, Quebec-based clothing retailer with 140 stores across Canada operating under the trade names Laura and Melanie Lyne, obtained protection under the CCAA on July 31, owing approximately $18.1 million to BMO and $13.4 million to its landlords. Founded in 1930, the company attributes its current financial difficulties to the detrimental impact the COVID-19 pandemic has had on the retail business. In July 2015, the company had filed an NOI as a result of issues it was facing with its then-lender, Salus Capital Partners. The NOI proceedings were later continued under the CCAA. The company emerged from its restructuring proceedings as a stronger business and was able to successfully operate in the rapidly-changing retail landscape until very recently, when its operations were blindsided by the unprecedented and unforeseeable pandemic. Although the company has been able to operate its online business in recent months, the online sales have been insufficient to offset the lost revenue resulting from store closures. KMPG was appointed monitor. Counsel is Fishman Flanz Meland Paquin for the company, Stikeman Elliott for the monitor, and Dentons for BMO.

Stokes Inc.

Stokes Inc., a Montreal, Quebec-based leading tableware, kitchenware, and home décor retailer with 147 stores across Canada, had its NOI proceedings continued under the CCAA on July 27. The company owes approximately $11.4 million in liabilities, including $2.5 million (USD) to Scotiabank. Founded in 1935, the company attributes its financial difficulties to adverse macro-trends such as changing consumer preferences, expensive leases, and a general shift away from brick-and-mortar to online retail channels. In addition, increased competition from discount and online retailers has exerted significant downward pressure on pricing and margins. Due to the COVID-19 pandemic, the company requires additional time to complete a liquidation sale for its stores and formulate a proposal for creditors. However, it has become evident that the company will not be able to do so before the expiry of the 6-month period following the filing of the NOI. Richter was appointed monitor. Counsel is Osler for the company, Stikeman Elliott for the monitor, and Kugler Kandestin for Scotiabank.

ANN Canada Inc.

ANN Canada Inc., a Toronto, Ontario-based premium fashion speciality retailer of women's apparel sold under the Ann Taylor and LOFT brands, and Tween Brands Canada Stores Ltd., which sells apparel under the Justice brand, filed NOIs on July 23, respectively listing $8.6 million and $7.9 million in liabilities. Ascena Retail Group, which indirectly owns the two companies, has not been profitable for the last several years and reported a net loss of approximately $661.0 million (USD) for the fiscal year ended August 2019. The companies have also been severely impacted by the changing retail landscape and, more recently, by the COVID-19 pandemic and containment measures implemented by the US in the various jurisdictions in which they operate. Weeks before filing the NOIs, the companies solicited offers from various liquidators to proceed with a liquidation of their assets. PwC is the proposal trustee. Stikeman Elliott is counsel to the companies.


Tristan, a Montreal, Quebec-based clothing retailer with over 40 locations in Quebec, Ontario and Alberta, filed an NOI on July 21, listing approximately $32.9 million in liabilities. The vast majority of the company's stores are located in malls, which have not been open for months. The company has also been without an operating loan for several months. The company announced that no layoffs or store closures are in the plans, though it will attempt to renegotiate leases. It also plans to make investments in technology. MNP is the proposal trustee. Counsel is Stikeman Elliott for the company and BLG for the proposal trustee.


Mendocino, a Toronto, Ontario-based fashion apparel retailer that carries on business under the trade names Mendocino and M Boutique, filed an NOI on July 14. Prior to the government-mandated shutdown due to the COVID-19 pandemic, the company operated 28 retail locations in the GTA and surrounding area. Like many retailers, the COVID-19 pandemic significantly impacted the company's business and operations, forcing it to revisit its business model. During the NOI proceedings, the company intends to reduce the number of store locations and increase its e-commerce presence. KSV is the proposal trustee. Counsel is Chaitons for the company and GSNH for the proposal trustee.


DAVIDsTEA (NASDAQ:DTEA), a Montreal, Quebec-based leading Canadian speciality tea and tea accessory retailer, obtained protection under the CCAA and had its Chapter 15 bankruptcy recognized in Canada on July 8. Currently, the company owes approximately $21.0 million for various trade and other payables, $7.2 million to its Canadian landlords, and $6.7 million in gift card commitments. Over the last three years, the company has suffered a $28.0 million decline in sales and incurred a combined net loss of $93.0 million. Several factors contributed to the company's financial difficulties, including the US stores under-performing, the minimum wage increase across several Canadian jurisdictions where the company operates, and the high cost of rent for the company's stores. Although the company implemented a series of operational turnaround initiatives, they were insufficient to offset ongoing decline in sales suffered over the last several months. Without the ordinary revenue stream from brick-and-mortar stores as a result of the COVID-19 pandemic, the company's online sales and wholesale transactions alone are insufficient to enable the company to meet its outstanding liabilities as they become due. Absent a CCAA proceeding, the company faces a looming liquidity crisis. The company intends to close 82 of its Canadian stores and all 42 of its American stores. PwC was appointed monitor. Counsel is Fasken for the company and Stikeman Elliott for the monitor.

Lucky Brand Dungarees Canada

Lucky Brand Dungarees Canada, the Canadian subsidiary of the American denim retailer, made an assignment in bankruptcy on July 6 following the filing of Chapter 11 proceedings by its parent company. The company operates nine retail stores across Canada selling men’s and women’s denim products and accessories. KSV was appointed trustee. GSNH is counsel for the trustee.

Scholar’s Choice

Scholar's Choice, a London, Ontario-based retailer of children's educational toys, teaching materials and early childhood furniture and toys, filed an NOI on June 30, listing approximately $8.1 million in liabilities, including $2.5 million to Accord Financial. The company, which has served customers across Canada for over 80 years, intends to close thirteen of its retail locations and shift focus to its e-commerce and catalogue operations. MNP is the proposal trustee. Miller Thomson is counsel for the company.

GNC Holdings (NYSE:GNC)

GNC Holdings (NYSE:GNC), a Pittsburgh, Pennsylvania-based specialty retailer of health and wellness products, in its capacity as foreign representative, had its Chapter 11 proceedings recognized in Canada under the CCAA on June 29. Over the past two years, the company has entered into several transactions that it believes have contributed to an increased profitability and stability of its business. However, faced with the potential maturity of its secured debt obligations and a decline in sales and liquidity caused by the COVID-19 pandemic, the company had no option other than to commence Chapter 11 bankruptcy. Following weeks of extensive negotiations, the company was able to negotiate DIP financing and a pre-arranged standalone plan of reorganization with certain of their secured lenders. The company hopes that the overwhelming support of the company's creditors will enable it to quickly emerge from its insolvency proceeding. The company will continue operating, but will become a smaller company as it plans to close up to 20% of its 5,800 retail stores, including 29 stores in Canada. FTI was appointed information officer. Counsel is Torys for the company, Stikeman Elliott for the information officer, and Cassels for the DIP lenders.

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