Reitmans (Canada) Limited Announces its Intention to Restructure its Operations under the Companies' Creditors Arrangement Act
May 19, 2020
MONTREAL, May 19, 2020 /CNW Telbec/ - Reitmans (Canada) Limited ("Reitmans" or the "Company") announces today that it is seeking protection under the Companies' Creditors Arrangement Act (the "CCAA") in order to facilitate its operational, commercial and financial restructuring. Application under the CCAA will be heard by the Québec Superior Court today.
The CCAA process will allow the Company to implement a restructuring plan that addresses the impacts of COVID-19 in order to build a more resilient organization that will be positioned for long-term success. Throughout this process, the Company will remain fully operational through its brands' e-commerce websites; all physical stores will re-open in conformity with provincial and regional governmental guidelines. As the restructuring gets underway, the Company will look to optimize its retail footprint in Canada to emerge from this process in a stronger state. The retail landscape has been in constant flux over the past several years, resulting in the evolution of consumer behavior and purchasing patterns. Reitmans has implemented a successful digital-first strategy, amongst other omnichannel initiatives, to drive sustainable growth in this evolving retail environment. However, the COVID-19 pandemic forced the closure of all retail stores, and pushed the retail industry into a new and unknown era.
Stephen Reitman, President and Chief Executive Officer of Reitmans, and grandson of the Company's founders, said: "Filing for protection under the CCAA is truly the hardest decision we have had to make as an organization in our almost one hundred years of history, but this pandemic has left us no choice – we believe that this is the only course of action to ensure we remain successful in the future."
Mr. Reitman added: "We have many strengths: we're the Canadian leader in specialty retail, we have a strong leadership team and talented employees, great national brands, an omnichannel retail strategy with robust online sales, and most importantly, loyal customers who have been shopping on our websites at a record pace since the start of the pandemic. We will dedicate ourselves to the restructuring of our business, and then we'll carry on with what we do best: offering affordable fashion and great service to our customers and communities for many years to come."
Reitmans' Board of Directors, in a unanimous decision and after having extensively considered other alternatives and a number of factors, authorized the Company to seek protection under the CCAA as the best alternative for the long-term interests of the Company, its employees, customers, creditors and other stakeholders.
Interim Financing (DIP)
In conjunction with its filing under the CCAA, the Company has undertaken a process to secure an interim financing (DIP) that shall provide the required liquidity to meet all of the anticipated needs of Reitmans and its brands to continue normal operations following the opening of its retail locations and throughout the CCAA process.
Reitmans is also in discussion with lenders with respect to a permanent financing upon exit from the restructuring process.
Annual General Meeting of Shareholders
The Company is also seeking an order from the Québec Superior Court to postpone its annual general meeting of shareholders for the fiscal year ended February 1, 2020, until further notice following the CCAA process.
About Reitmans (Canada) Limited
The Company is a leading ladies apparel retailer with retail outlets throughout Canada. The Company employs approximately 6,800 people and operates 576 stores consisting of 259 Reitmans, 106 Penningtons, 80 RW & CO., 77 Addition Elle and 54 Thyme Maternity. The Company is a publicly traded company listed on the Toronto Stock Exchange (TSX: RET, RET-A). For more information, visit www.reitmanscanadalimited.com.
SOURCE Reitmans (Canada) Limited
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