Reitmans Ltd. filed for protection from its creditors in Canadian court on Tuesday, making it the latest retailer to restructure its business amid the COVID-19 pandemic.
The Montreal-based company, which operates 576 stores and employs approximately 6,800, said in a news release Tuesday that it is seeking protection under the Companies’ Creditors Arrangement Act “in order to facilitate its operational, commercial and financial restructuring.” The application will be heard in Quebec Superior Court on Tuesday.
“Filing for protection under the CCAA is truly the hardest decision we have had to make as an organization in our almost one hundred years of history, but this pandemic has left us no choice,” Reitman chief executive officer and president Stephen Reitman said in a statement.
“We believe that this is the only course of action to ensure we remain successful in the future."
The retailer, which operates Reitmans, Penningtons, RW&Co, Addition Elle and Thyme Maternity stores, said the CCAA process will allow it to “build a more resilient organization that will be positioned for long-term success.”
Reitmans indicated that it will look at reducing the number of storefronts it operates.
The company will continue operating its online stores through the restructuring process. Bricks and mortar stores will reopen as able to based on provincial and federal guidelines.
The COVID-19 pandemic lockdowns that forced retailers across the world to close its physical stores have exacerbated ongoing issues at the struggling retailer.
The company’s net loss for the year ending Feb. 1, 2020 was $51.7 million, or a loss of $1.06 per diluted share, compared to a loss of $8.9 million last year, or a loss of 14 cents per share.
Reitmans said in a statement on May 1 that the results did not meet the company’s expectations.
“Strategic brand changes implemented at the beginning of the fiscal year failed to resonate with the banners' customer base,” the retailer said.