Reitmans Canada Ltd has been feeling the impact of the Covid-19 pandemic, as it continues to seek to obtain creditor protection under the Companies’ Creditors Arrangement Act (CCAA).
The Canadian retailer, who filed for creditor protection and obtained an initial order under the CCAA on May 19, 2020, received on Friday an extension of the initial order.
The Quebec court issued an “Amended and Restated Initial Order” for an additional period of 60 days, until July 29, 2020.
Ernst & Young Inc. was appointed as a monitor for the CCAA process and has been assisting the retailer in creating a restructuring plan. As of May 17, 2020, the company had an unrestricted cash balance of approximately $40.7 million.
“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,” Chief Executive Officer Stephen Reitman said in a statement, earlier this month.
"We believe that this is the only course of action to ensure we remain successful in the future.”
As of Friday, the company had reopened approximately 380 retail locations with more stores expected to open in the coming week, it said. The company also remains fully operational through its brands' e-commerce websites, though it relies on in-store purchases for roughly 80 percent of its revenue.
In March, Reitmans laid off 90 percent of its Canadian retail store employees and approximately 30 percent of the company's Montreal head office employees.
Reitmans currently 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 retailer was already facing financial pressure before the Covid-19 crisis hit. In its most recent quarter, ended November 2, 2019, sales dropped to $222.3 million, as compared with $239.7 million reported during the same period last year.