Well-known Canadian retail names seek creditor protection, close stores
Canada’s retail industry is starting the year with several brands seeking creditor protection and closing stores.
Comark Holdings Inc., which owns apparel brands Ricki’s, Cleo and Bootlegger, and with UCG Canada Holdings Inc., which operates as clothing brand Frank and Oak, both made court applications in recent weeks designed to give them reprieve from creditors and the space to consider the future of their businesses.
Comark’s filing under the Companies’ Creditors Arrangement Act was paired with a decision to shutter all of its Ricki’s and Cleo locations, which sell women’s apparel that is often suited for office environments.
Court documents show the company operates 75 Ricki’s stores, 54 Cleo stores, 20 joint locations and about 19 sites the brands split with Comark’s other banner Bootlegger, which has 53 standalone shops.
The company, which court filings say has 2,056 employees in Canada, said it would seek a future court order to liquidate some of the Bootlegger stores. Its lawyers did not respond to a request for comment.
In court filings, Comark describe how it ran into trouble as it tried to cope with the COVID-19 pandemic, a November 2021 ransomware attack, more competition from ultra low-cost fashion retailers like Shein and Temu and supply chain and vendor issues.
“Notwithstanding their best efforts to reduce expenses, preserve capital and improve profitability, the applicants’ liquidity position continues to rapidly deteriorate, particularly during the traditionally slower post-Christmas retail season,” chief executive Shamsh Kassam said in an affidavit.
He estimated that by the time Christmas arrived, Comark’s brands owed $61 million to a mix of vendors, landlords and other partners who the company would be
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