Le Château files for creditor protection, appoints PwC as monitor

28 October 2020 Consulting.ca

Le Château, a Montreal-based fashion retailer, has filed for creditor protection. The firm appointed consulting firm PwC Canada as its monitor during the Companies’ Creditors Arrangement Act (CCAA) proceedings.

Le Château announced on October 23 that PwC will oversee the company’s operations as it liquidates its stores and merchandise over the coming months. Gordon Brothers Canada ULC and Merchant Retail Solutions ULC were appointed as consultants to implement the liquidation.

The fashion retailer, which was founded in 1959, will now wind down its operations, which includes 123 stores in Canada. 1,400 employees will lose their jobs, including 500 head office employees and 900 retail store workers. Le Château’s stores and website will remain open while the liquidation period takes place.

Le Château files for creditor protection, appoints PwC as monitor

The company pointed to challenges from the Covid-19 pandemic and a related decline in consumer demand for holiday party and occasion wear – the core of the firm’s offering – as key factors in its collapse.

Le Château said in a press release that it tapped professional advisors to help it refinance or sell the company to a third party, but those efforts ultimately failed.

The struggling retailer saw its sales plummet to $14.7 million in the three-month period to July 25, dropping from nearly $50 million in sales in the same period last year.

Le Château is the latest Canadian retailer to file for creditor protection during the Covid-19 pandemic. Other casualties of the ongoing retailer apocalypse include fashion brands Reitmans and Mendocino, and outdoors retailers MEC and Sail.


Profile
×