Montreal-based retailer Frank And Oak has filed for creditor safety for the second time this decade, in search of aid from $71 million in debt, whereas the Ontario firm behind Ricky’s and Cleo says it would shutter their shops.
Frank And Oak, a sustainable-fashion model, filed for creditor safety simply earlier than the Christmas vacation, in line with Le Journal de Montréal, which first reported the information on Monday. It has been owned by New York-based trend agency Unified Commerce Group (UCG) since 2020.
As Frank And Oak’s collectors, UCG and Desjardins are owed $55.5 million, and the corporate owes a further $14.6 million to unsecured collectors, together with the Canada Border Providers Company, the Canada Income Company and Shopify.
Accounting agency PricewaterhouseCoopers has been appointed its trustee in the course of the proceedings.
The model first sought creditor safety in June 2020 because the retail sector struggled with the closure of non-essential shops in the course of the COVID-19 pandemic. The corporate stated in courtroom filings that it is nonetheless dealing with challenges from that point.
Damien Silès, director of the Retail Council of Quebec, instructed CBC Information different contributing components embrace sluggish retail spending by customers, in addition to aggressive competitors from ultra-fast trend model Shein and on-line retailer Temu.
After being hit arduous by the COVID-19 pandemic, clothes retailer Frank And Oak’s struggles have continued. In accordance with the Retail Council of Quebec, the rise of on-line quick trend tendencies could also be enjoying an element within the firm’s challenges.
An organization press launch shared with CBC Information says Frank And Oak is exploring choices to restructure its enterprise. It is going to proceed to function usually with “minimal” disruption to workers and prospects.
“The first aim is to protect the enterprise, safeguard jobs and discover potential options, together with attracting an investor or figuring out a purchaser for the model,” the press launch says.
Frank And Oak was launched as a web based model by co-founders Ethan Track and Hicham Ratnani in 2012. As of this 12 months, it operates 15 brick-and-mortar places throughout the nation in Quebec, Nova Scotia, Ontario and B.C.
Ricki’s, Cleo shops are set to shut
In the meantime, a number of different Canadian clothes manufacturers have additionally introduced retailer closures as they file for creditor safety.
Girls’s attire firm Comark Holdings says it would shutter all the shops underneath its Ricki’s and Cleo banners because it information for creditor safety.
Court docket paperwork present the Ontario-headquartered firm operates 75 Ricki’s shops, 54 Cleo shops, 20 joint places and about 19 websites the manufacturers break up with Comark’s different banner Bootlegger.
A observe on Cleo’s web site says that, efficient Jan. 17, its shops will not settle for returns or present playing cards, nor will it be capable of redeem or obtain loyalty factors.
Retail analyst Doug Stephens instructed CBC Information that many of the model’s 221 shops are mall-based, and “we have already been seeing a continuing exodus of some actually premium manufacturers leaving malls.”
Most malls seeing declines in foot site visitors. Ricki’s and Cleo are additionally challenged by the truth that they don’t seem to be fairly low cost manufacturers, however do not qualify as luxurious manufacturers both, Stephens famous.
“So they’re actually caught in that very, very tough portion of the market that’s attempting to draw at that mid-tier shopper that more and more does not exist anymore.”
CBC Information has reached out to the corporate’s court-appointed monitor for extra details about the shop closures. It is presently unclear when the shops will shut.
A court-appointed monitor says Comark’s profitability has been negatively impacted by the pandemic, a November 2021 ransomware assault, extra competitors from extremely low-cost trend retailers and provide chain and vendor points.
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