Stokes Inc., CCAA

Stokes Inc., a Montréal, Québec headquartered retailer of kitchenware, tableware and homeware goods, obtained CCAA protection on November 15.

The three-generation family business was founded in 1935 and has grown to operate from a total of 95 retail stores in all of Canada’s provinces.

The company’s margins and profitability have suffered in recent years due to factors including high interest rates, the inflationary environment for goods and services, changing consumer preferences, increased competition, additional costs relating to a second warehousing facility and declining sales.

Stokes has implemented various restructuring initiatives over the past several months, including exiting several underperforming stores, reducing overhead costs and implementing a pre-filing SISP, but this has been insufficient to improve performance.

The company’s loan with BNS, owed over CAD$15 million and over US$2 million, expired in July 2024 and is now payable.

Stokes has initiated the CCAA proceedings to effect an operational restructuring which will focus on liquidating 45 closing stores, with 50 remaining stores in Ontario and Québec.

EY is the monitor.

Counsel is Osler for Stokes, McCarthy Tétrault for the monitor, Kugler Kandestin for BNS, Stikeman Elliott for Tiger Asset Solutions Canada and B. Riley Retail Canada, Gowling WLG for Cominar and other landlords, and Camelino Galessiere for Morguard and other landlords.