Retailer Le Château is seeking court protection from its creditors while it winds down its operations and liquidates its assets.
The Montreal-based fashion chain with 123 locations across Canada and 1,400 employees said in a release Friday that it has applied for protection from its creditors under the Companies’ Creditors Arrangement Act, or CCAA.
In a release, the company’s management said it had “come to the very difficult decision that the company can no longer continue its operations as a going concern after having used its best efforts over the preceding months, with the assistance of professional advisers, to refinance or sell the company to a third party that would continue operating the business.”
The chain said the ongoing COVID-19 pandemic has had an “evident impact on consumer demand for Le Château’s holiday party and occasion wear, which represents the core of our offering [and] has diminished Le Château’s ability to pursue its activities. Regrettably, these circumstances leave the company with no option other than to commence the liquidation process.”
The retailer was scheduled to have its annual general meeting in Montreal on Thursday, but abruptly cancelled the event two days prior without explanation beyond saying that the company “will provide further updates in due course.”
In the three-month period up until July 25, Le Château racked up just $14.7 million in sales across its network of stores and online. That’s down from almost $50 million in the same period last year. As of July, the company says it had about $118 million in assets, against $201 million worth of liabilities.
At the time, the chain thanked its landlords for granting the chain $4.6 million worth of rent relief for July and August. Despite that, it still warned there was some doubt about the chain’s “ability to continue as a going concern for the next 12 months.”