Reitmans seeks court protection from creditors under CCAA, plans restructuring

Reitmans (Canada) Ltd. has received an initial order Tuesday after seeking court protection from its creditors under the Companies’ Creditors Arrangement Act to allow a restructuring of the women’s clothing retailer.

The retailer’s application was heard by the Quebec Superior Court earlier Tuesday. Ernst & Young Inc. was appointed as monitor for the CCAA process and will assist the retailer in creating a restructuring plan, the company said in a statement.

The plan will have to deal with the business fallout from COVID-19, which prompted retail outlets across Canada to shut their doors temporarily in an effort to help contain the pandemic from spreading, the company said in an earlier statement before the court proceedings.

Reitmans closed 587 stores on March 17, but its e-commerce websites have remained open. At the time, the company also announced it would temporarily lay off 90 per cent of its Canadian retail staff, starting March 29, across its five banners: Reitmans, Penningtons, Addition Elle, RW & Co. and Thyme Maternity. Thirty per cent of its Montreal head-office staff were also laid off starting March 30. Remaining employees, meanwhile, were asked to contribute to on-going cost-saving initiatives.

“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 Stephen Reitmans said.

Reitman assumed the CEO role in early 2020 following the death of his brother Jeremy Reitman, who served as chief executive and chairman.

“We believe that this is the only course of action to ensure we remain successful in the future.”