MONTREAL -- Battered by the impact of the COVID-19 pandemic, Montreal-based clothing retailer Reitmans announced Tuesday that it is seeking protection from its creditors in hopes of restructuring.
The Reitmans filing will be heard in Quebec Superior Court Tuesday, the company said, noting that the decision to do so was made unanimously by its board of directors.
"Filing for protection under the CCAA (Companies' Creditors Arrangement Act) 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 – we believe that this is the only course of action to ensure we remain successful in the future," Stephen Reitman, president and CEO of Reitmans, said in a statement Tuesday.
"We will dedicate ourselves to the restructuring of our business," Reitman added, noting that despite widespread store closings due to public health orders across the country "loyal customers ... have been shopping on our websites at a record pace since the start of the pandemic."
Reitmans will reopen its 576 stores - under the Reitmans, Penningtons, RW & Co., Thyme Maternity and Addition Elle banners - as permitted by various public health orders across the country, the company said.
Reitmans employs some 6,800 people across Canada.
Reitmans is also in talks with lenders for permanent financing upon exit from the restructuring process, and is seeking an order from the Quebec Superior Court to postpone its annual general meeting of shareholders.
"The retail landscape has been in constant flux over the past several years, resulting in the evolution of consumer behaviour and purchasing patterns," the company noted, adding it has implemented what it called "a successful digital-first strategy" and other initiatives to drive growth in the changing environment.
Reitmans boasted in January 2011 that it had 968 locations across seven banners, including 158 Smart Set and 22 Cassis stores.
In October 2011, the company announced it would close the Cassis stores and convert many to its other banners. The Cassis brand, which was aimed at women over 40 years old, accounted for less than two per cent of the company's total annual sales, Reitmans said in a statement announcing the closures.
A little over three years later, in November 2014, Reitmans decided to close its Smart Set banner over the next 12 to 18 months. It planned to convert 76 locations to other banners and close 31 outlets. Smart Set sales accounted for about 10 per cent of the company's annual sales.
Reitmans converted some of those Smart Set locations to a new brand, Hyba -- the company's activewear line. However, by March 2018, the company said it would close all 17 Hyba stores by Feb. 2, 2019. It planned to continue selling the line at Reitmans stores, as well as online. Hyba stores accounted for less than two per cent of the company's annual sales, it said.
In announcing the CCAA filing, Reitmans noted the impact of the pandemic has changed the retail landscape even more.
"However, the COVID-19 pandemic forced the closure of all retail stores, and pushed the retail industry into a new and unknown era."
On May 8, another Montreal-based fashion retailer, Aldo, announced it would be seeking protection from its creditors.
A list of some other Canadian companies that have filed for court protection from creditors under the Companies' Creditors Arrangement Act since the beginning of the pandemic:
May 15: Entrec Corp. (Transportation)
May 8: Flighthub Group Inc. (Travel)
April 22: Dominion Diamond Mines ULC (Mining)
April 14: Delphi Energy Corp. (Energy)
March 31: CannTrust Holdings Inc. (Cannabis)
- The Canadian Press contributed to this report