Two Canadian clothing retailers that underwent restructuring during the pandemic have sought creditor protection once again, underscoring a challenging time for the industry as consumers cut down on unnecessary spending and stores face competition from online fast-fashion sellers. On Tuesday, Vancouver-based retailer Comark Holdings Inc. announced that it would permanently close down all of its Ricki’s and cleo stores. Those locations will begin liquidation sales soon.
The company is looking for a buyer for its Bootlegger store chain, and plans to close some of those locations as well. Comark, which currently operates 221 stores across the country, was granted protection under the Companies’ Creditors Arrangement Act (CCAA) on Tuesday. Just before the holidays, the owner of Montreal-based fashion retailer Frank and Oak also sought creditor protection under the Bankruptcy and Insolvency Act, a lower-cost option compared to CCAA that requires companies to propose a restructuring plan within a shorter time period. New York-based investment company Unified Commerce Group bought Frank and Oak during its last restructuring in 2020. Executives at the time said they had plans to expand Frank and Oak to international markets. But while the business has grown in recent years, Frank and Oak “has struggled to recoup losses experienced in the aftermath of the COVID-19 pandemic,” UCG chief executive Dustin Jones wrote in a Dec. 16 notice to creditors. The company is now looking for “a viable path forward,” he wrote. That could include selling the business, according to a company press release. As of Dec. 16, UCG Canada Holdings Inc. had roughly $71-million in debt, including $14-million owed to unsecured creditors and more than $55-million owed to UCG Holdings Inc. Frank and Oak was founded in 2012 by former Deloitte consultants Ethan Song and Hicham Ratnan
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Canadian Clothing Retailers Seek Creditor Protection Amid Industry ChallengesTwo Canadian clothing retailers, Comark Holdings Inc. and Frank and Oak, have filed for creditor protection, highlighting the difficulties faced by the retail sector due to decreased consumer spending and competition from online fast-fashion retailers. Comark, owner of Ricki's, cleo, and Bootlegger, is closing its Ricki's and cleo stores and plans to consolidate Bootlegger locations. Frank and Oak, acquired by Unified Commerce Group in 2020, is seeking a viable path forward, potentially involving a sale, as it grapples with pandemic-related losses.
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