The Castle goes bankrupt, accuses COVID-19

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Retailer Le Château is seeking court protection from its creditors while it goes out of business and liquidates its assets.The Montreal-based fashion chain, which has 123 branches across Canada and 1,400 employees, said in a statement on Friday that it had filed for creditors protection under the Companies’ Creditors Arrangement Act. , or LACC.

In a statement, the management of the company said it had “come to the very difficult decision that the company can no longer continue as a going concern after having put all its efforts in the previous months, with the help of professional advisers, to refinance or sell the business to a third party who would continue to operate the business. ”

The chain said the ongoing COVID-19 pandemic has had a “clear impact on consumer demand for Le Château’s party and second-hand clothing, which is the core of our offering. [and] reduced the ability of the Château to continue its activities. Unfortunately, these circumstances leave the company with no choice but to begin the liquidation process. ”

The retailer was scheduled to hold its annual general meeting in Montreal on Thursday, but abruptly canceled the event two days before, with no explanation beyond saying the company “will provide further updates in due course.”

In the three-month period to July 25, Le Château achieved just $ 14.7 million in sales across its store network and online. This is down from almost $ 50 million in the same period last year. In July, the company said it had around $ 118 million in assets, compared to $ 201 million in liabilities.

The chain is just the latest Canadian retail brand to apply for CCAA membership under COVID-19, including clothier Reitmans, beverage vendor DavidsTea and shoe retailer Aldo.

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