Reitmans (Canada) Limited (TSX:RET.A)

Reitmans (Canada) Limited (TSX:RET.A), Canada's largest women's apparel retailer and the main operating entity of the Reitmans Group, obtained protection under the CCAA on May 19. Founded in 1926 in Montreal, Quebec, the company now operates 576 stores across Canada, including Reitmans outlets, Penningtons, RW & CO. stores, Addition Elle stores and Thyme Maternity locations. For the past three years, the Reitmans Group has seen a significant decrease in sales and, in its last fiscal year, it incurred a net loss of $87 million. Although the company had started to reduce its number of brick-and-mortar stores prior to COVID-19, the pandemic further caused a sharp decrease in sales when the remaining stores were temporarily closed in March. Given that e-commerce sales represent less than 30% of total sales, the impact of COVID-19 has been significant and the company expects to run out of liquidity shortly. The company, which currently has $361.0 million worth of assets, owes its creditors approximately $109.0 million, including $24.0 million in pension plan obligations as well as unpaid rent owed to its landlords. In consultation with the court-appointed monitor, EY, the company intends to conduct a sale of retail inventory located in certain stores. Counsel is Davies for the company and Osler for EY.

Aldo Group

Aldo Group, a Montreal, Quebec-based Canadian retailer that owns and operates a worldwide chain of shoe and accessories stores under the names Aldo, Globo and Call it Spring, obtained protection under the CCAA on May 7, owing approximately $100.0 million to Southwest, an affiliated company, and $40.0 million to Investissement Quebec. Founded in 1972, the company has grown to become a global leader in footwear and fashion accessories. It has sold over 46 million pairs of shoes and has stores in over 100 countries. The last few years, however, have not been profitable. For the 12 months ended February 1, 2020, Aldo Canada posted a net loss from operations of approximately $74.8 million and Aldo US posted a net loss from operations of approximately $52.8 million. In an effort to improve its financial performance, the group initiated a large-scale transformation plan in late 2019 that included a plan to reduce its brick and mortar reliance and a switch to an asset based lending structure to increase its working capital. The COVID-19 crisis, however, has foiled the company's transformation. Sales have decreased dramatically due to the government-mandated store closures. The pandemic also affected the Group's normal procurement schedules, resulting in its spring merchandise being unsold and delaying the delivery of fall merchandise ordered from suppliers in Asia. Currently, the Group's credit facility is fully drawn and its current prospects do not allow for additional loans without substantial operational changes. While under creditor protection, the company intends to terminate various leases while considering various restructuring alternatives. EY was appointed monitor. Counsel is Davies for the Group, McCarthy Tétrault for EY, and Fasken for Investissement Quebec.

Cranbrook Glen Enterprises Ltd.

Cranbrook Glen Enterprises Ltd., which operates as the camera and accessories retailer Henry's, filed an NOI on May 1, listing approximately $24.0 million in liabilities, including $14.8 million to BMO. With all 30 of the Henry’s retail locations temporarily closed as a result of COVID-19, the company has seen a significant impact to its sales. While its e-commerce operations remain, Henry’s intends to close seven of its stores during this restructuring and reopen the remaining 23 stores once COVID-19 measures are lifted. Grant Thornton is the proposal trustee. Counsel is Loopstra Nixon for the company and McCarthy Tétrault for BMO.

McArthur Furniture (“McArthur”)

McArthur Furniture ("McArthur"), an independent family-owned furniture and mattress retailer with locations in Calgary and Airdrie, Alberta, along with MTK Properties ("MTK"), were placed in receivership on February 4 on application by RBC, owed approximately $653.6 thousand by McArthur and $7.2 million by MTK. McArthur explored options to sell its Calgary and Airdrie retail lands and buildings as part of an overall restructuring plan to address the challenges the company was facing due to the downturn in the Alberta economy and growing shift to online shopping. The receivership order was stayed to allow the company to pursue these two prospective land sales, which would have been sufficient to repay RBC in full. Although the company sold its Calgary location before the deadline on March 31, it failed to sell its Airdrie location. As such, the appointment of KPMG as receiver came into effect on March 31. Counsel is Burnet, Duckworth & Palmer for the applicant and Carscallen for the companies.

1348441 Ontario Inc. (o/a Solutions Your Organized Living Store)

1348441 Ontario Inc. (o/a Solutions Your Organized Living Store), a Mississauga, Ontario-based company that operates a chain of specialty retail stores throughout Ontario selling home and office organizational and storage products, filed an NOI on March 26, listing approximately $13.5 million in liabilities, including approximately $6.0 million to BNS. Founded in 1999, the company was ranked on Profit Magazine's list of Top 100 or the Next 100 fastest growing companies in Canada every year from 2006 to 2010 and was selected as a regional finalist for Canada's 50 Best Managed Companies in 2009. More recently, however, the company has struggled with the digital disruption happening in the retail industry, increased local competition and the COVID-19 mandated store closures. While under creditor protection, the company intends on closing nine non-performing locations and maintaining three performing locations to be reopened when provincially mandated non-essential workplace closures are lifted. Dodick Landau is the proposal trustee. Counsel is Loopstra Nixon for the company and Weisz Fell Kour for the proposal trustee.

Kahunaverse Sports Group

Kahunaverse Sports Group, a Surrey, British Columbia-based retailer of multi-brand sporting equipment, apparel and accessories, and its subsidiary, Soccer Express Trading, filed NOIs on March 11. In recent years, the companies had been experiencing financial losses and challenges in its operations due to poor retail results and mergers of their corporate operations. Furthermore, the companies were compelled to close six of their retail stores as part of the effort to support social distancing. Prior to the NOI filings, the companies and their shareholders entered into a share purchase agreement with Greyrock Capital on the condition that the current debts be compromised. Greyrock Capital also agreed to provide interim financing to the companies to fund much needed working capital as the spring period is one of the busiest seasons of the year for sales. On March 30, the court granted orders approving the interim financing and extending the period in which the companies must file a proposal. PwC is the proposal trustee.

FHC Enterprises

FHC Enterprises, a Vancouver, British Columbia-based company which operates the FIELDS chain of 64 retail stores located in rural communities throughout Western Canada, filed an NOI on March 6, listing $17.5 million in liabilities, including $8.9 million to RBC. The company attributes its financial difficulties to a failure to respond quickly to increasing minimum wage costs and increased carbon taxes. In addition, several of the company's stores have been affected by the downturn in retail and the economies in Alberta and Saskatchewan. MNP is the proposal trustee. Counsel is MLT Aikins for RBC and Gehlen Dabbs for the company.

Le Cordée

Le Cordée, a Montreal, Quebec-based sports and outdoor goods retailer operating five stores in Quebec, filed an NOI on February 21, listing $22.2 million in liabilities, including $10.4 million to National Bank, $857.3 thousand to Arcteryx, and $839.0 thousand to North Face. The company is focused on its transformation, which will include refinancing its operating facility with another lender. MNP is the proposal trustee. EY is financial advisor to the company. PwC is financial advisor to National Bank. Counsel is Norton Rose Fulbright for the company and McCarthy Tétrault for National Bank.


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.

Pier 1 Imports

Pier 1 Imports, a leading American retailer of home décor and accessories with 65 stores in Canada, had its US Chapter 11 bankruptcy recognized in Canada under the CCAA on February 18. Due to a challenging retail environment and certain strategic missteps under past management, the company experienced a decline in its performance, including substantial declines in revenue as well as operating losses and net losses. As of November 2019, the total liabilities of the company and seven of its subsidiaries were approximately $1.3 billion (USD). Moving forward, the company has decided to close all of its Canadian locations by the end of March 2020 as part of its overall restructuring, with Gordon Brothers handling the liquidation. The company will receive up to $256.0 million in DIP financing to continue its US operations during the Chapter 11 proceedings. Alvarez & Marsal was appointed information officer. Counsel is Osler for the company, Stikeman Elliott for the information officer Norton Rose Fulbright for the DIP senior credit facility lenders and Cassels for Gordon Brothers.

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