A Reitmans sign is seen on a store front in Montreal on Tuesday, June 18, 2019. Reitmans (Canada) Ltd. says it is seeking court protection from its creditors under the Companies' Creditors Arrangement Act in order to allow a restructuring of the retailer.
Image Credit: THE CANADIAN PRESS/Paul Chiasson
May 19, 2020 - 11:00 AM
MONTREAL - Reitmans (Canada) Ltd. is seeking court protection from its creditors under the Companies' Creditors Arrangement Act to allow a restructuring of the retailer.
The company said the application will be heard by the Quebec Superior Court on Tuesday.
It said the process will allow the company to implement a restructuring plan that addresses the impacts of COVID-19.
"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," chief executive 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 pandemic forced the closure of the retailer's stores in a bid to slow the spread of the coronavirus but its e-commerce websites have remained open.
The company said the board reached the unanimous decision to seek a restructuring under court protection from its creditors after having considered other alternatives and a number of factors.
Montreal-based Reitmans was founded in 1926 and operates under several banners including Reitmans, Penningtons, Addition Elle, RW & Co. and Thyme Maternity.
The company has been closing stores as it adjusts to competition from U.S. retailers that has hurt sales while increasing its e-commerce business.
In conjunction with its court filing, the company says it has undertaken a process to secure interim financing to allow its stores to continue normal operations following the opening of its retail locations and throughout the CCAA process.
The company said it is also in talks with lenders regarding a permanent financing upon exit from the restructuring process.
Reitmans said it employs approximately 6,800 people and operates 576 stores including 259 Reitmans, 106 Penningtons, 80 RW & CO., 77 Addition Elle and 54 Thyme Maternity.
This report by The Canadian Press was first published May 19, 2020.
Companies in this story: (TSX:RET)
News from © The Canadian Press, 2020