Studio Black Suede Inc., a Montreal, Quebec-based premium footwear brand, filed an NOI on December 24, 2020 owing approximately $434.0 thousand to CIBC. Litwin Boyadjian is the proposal trustee.
Haggar Canada Direct Co. (“Haggar”), a fashion apparel retailer carrying on business from several retail locations in the Province of Ontario – including Niagara-on-the-Lake, Ottawa, Cookstown and Vaughan – filed an assignment in bankruptcy on December 2. Haggar experienced financial difficulties due to the impact of the COVID-19 pandemic on its retail stores in Canada, including a significant decline in revenues, which led to management’s decision to cease carrying on retail operations in Canada. Fuller Landau was appointed bankruptcy trustee and has obtained an order authorizing it to commence a liquidation sale of the inventory at Haggar’s retail locations. Aird & Berlis is counsel for the company. Danbury Global is conducting the liquidation.
Directions East Retail Ltd., a Toronto, Ontario-based jewellery retailer with a 50-year history, filed an NOI on October 30. Since 2017, the company's sales have declined significantly due to reduced mall traffic and a surge in competing internet sales. Although the company began consolidating its operations in 2019, it was forced to totally shut down operations with the onset of the COVID-19 pandemic in the spring of 2020. When operations re-opened in July, the company had further terminated five of its retail locations. Shortly after, RBC — which had been the company's banker since 1972 — sent the company a demand letter and Notice of Intention to Enforce Security. Given that holiday season sales are critical to the company's financial outlook, the company will wait to file a proposal until after it reviews the financial results of the 2020 holiday season. Rosen Goldberg is the proposal trustee. Counsel is Minden Gross for RBC and Fogler, Rubinoff for the proposal trustee.
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.
Swimco Aquatic Supplies Ltd. and Swimco Partnership (collectively, the "Swimco Group"), a Calgary, Alberta-based swimwear and clothing retailer, was deemed bankrupt on October 10 after the companies failed to make a viable proposal to their creditors. The Swimco Group lists approximately $8.8 million in liabilities, including $1.2 million to Steve Forseth Enterprises. During the mandated closures, the Swimco Group's only source of revenue was from its online sales. However, that revenue was insufficient to pay ongoing lease obligations or to service Swimco Group's long-term debt. Despite re-opening its stores in late May, sales revenues have not returned to their normal levels and the Swimco Group became unable to meet its payment obligations to various creditors. Deloitte is the proposal trustee. Counsel is Field Law for Swimco Group and Cassels for the proposal trustee.
Okaïdi Canada, the Canadian subsidiary of a French children's clothing retailer, filed an NOI on October 7, listing approximately $15.8M in liabilities. In 2010, the company entered the Canadian market and currently operates 15 stores in Quebec and Ontario. Given the COVID-19 environment and the impact on the retail sector, the company suffered significant losses and a major reduction in its sales. The company will evaluate its restructuring options in the coming weeks, including having discussions with landlords. Richter is the proposal trustee. Counsel is BDG Law for the company and Stikeman Elliott for the proposal trustee.
Mountain Equipment Co-operative (MEC), a Vancouver, British Columbia-based member-owned and directed retail consumer co-operative specializing in outdoor activity equipment and clothing, obtained protection under the CCAA on September 14, listing approximately $229.6 million in liabilities and $389.0 million in assets. MEC — which is a key Canadian retail partner with global outdoor brands including Patagonia, the North Face, Arc'teryx, Birkenstock, and Blundstone — currently operates 22 retail locations across Canada. While there was a considerable increase in online sales during March to September, MEC experienced a reduction in sales of $90 million compared to last year, and all MEC stores were closed as of March. The co-op is currently in the midst of a liquidity crisis, primarily due to difficult retail conditions which were exacerbated by the COVID-19 pandemic. As such, it was necessary for MEC to refinance, downsize operations, conduct a review of strategic alternatives, or conduct a potential sale of the MEC business. MEC's board of directors has unanimously approved a deal in which Kingswood Capital Management ("Kingswood"), a Los Angeles-based private investment firm, will acquire MEC's assets. MEC's transition from a co-operative structure to a subsidiary of Kingswood is required to ensure a stable future for the business. Alvarez & Marsal was appointed monitor. Counsel is Norton Rose Fulbright for MEC, Cassels Brock for the monitor, and Fasken for Kingswood.
Brooks Brothers Group Inc., an American lifestyle brand that markets and sells footwear, eyewear, bags, and jewellery, was declared a foreign representative of itself, Brooks Brothers Canada Ltd., and 12 other affiliated debtors-in-possession (collectively, the "Chapter 11 Debtors") under the CCAA on September 11. Prior to the COVID-19 pandemic, the company was already negatively impacted by significant operational and manufacturing challenges due to shifting retail industry trends in recent years. Since the Chapter 11 Debtors filed for bankruptcy in July, they have successfully completed a sale to SPARC Group LLC of substantially all of the Chapter 11 Debtors' assets, including the assets of Brooks Brothers Canada. Alvarez & Marsal was appointed information officer. Counsel is Osler for the company, Torys for the information officer, and Goodmans for the SPARC Group LLC.
Groupe Dynamite, a Montreal, Quebec-based fashion retailer that operates 322 retail stores under the brands Garage and Dynamite, obtained protection under the CCAA on September 8, listing approximately $357.0 million in liabilities and $192.0 million in assets. The company owes $149.4 million to a banking syndicate composed of National Bank of Canada, BMO, TD, and Fédération des caisses Desjardins du Québec. After record performances in 2019 and early 2020, the company was negatively affected by the ongoing pressures of COVID-19 store closures, social distancing measures, and closed borders resulting in a significant lack of tourism. Increases in digital sales since the beginning of the pandemic were not able to offset the massive impact of store closures, and the company's overall sales dropped by 50% compared to the same period in 2019. The company has unsuccessfully tried to renegotiate its store leases in order to limit its losses. During these CCAA proceedings, a numbered company will be providing up to $20.0 million in interim financing. Deloitte was appointed monitor. Counsel is McCarthy Tétrault for the company and Dentons for the National Bank of Canada.
Geox Canada Inc., which is indirectly controlled by Geox SpA ("Geox"), a global shoe and clothing retailer based in Italy, filed an NOI on September 8. Since the beginning of the COVID-19 pandemic, traffic in stores in North America remains more than halved. In the first half of 2020, Geox's revenues amounted to $7.2 million (EUR), representing a 54% decrease compared to the first half of 2019. At this time, the company is utilizing the stability afforded by the NOI to consider its various restructuring options. Geox, which has been restructuring its operations for several years, intends to streamline its physical store network and focus on its online business. Richter is the proposal trustee. Counsel is Aird & Berlis for the company and Fasken for the proposal trustee.