Miniso Canada faces bankruptcy application
China-based discount retailer fighting Miniso Guangzhou LLC
Miniso Canada says it has reached a preliminary agreement with Miniso Guangzhou LLC in a case that has threatened to force the Chinese discount retailer’s Canadian operations into bankruptcy.
In a statement posted to its Instagram page on Monday evening, Miniso Canada said the two parties are currently in the process of settling their business issues and finalizing details on the agreement.
“Miniso Canada will continue to provide quality products and services to Canadian consumers,” the statement promised. Miniso Canada’s remarks stemmed from a Dec. 12 application that the China-based Miniso Guanzhou LLC filed with the Supreme Court of British Columbia, seeking to begin bankruptcy proceedings for the brand’s Canadian business.
The company is accusing Min- iso Investments Inc., Migu Investments Inc. and Miniso (Canada) Store Inc. — the operators of about 50 stores selling Miniso products in Canada and have another 10 locations in the process of opening — of fraudulently transferring registered trademark rights to third-party corporations, disposing of inventory and ceasing to meet liabilities as they came due.
The filings also say Miniso Guangzhou LLC is owed the Canadian equivalent of $2.4 million (U.S.) in loans and $13.3 million in inventory.
An affidavit filed by Miniso Guangzhou LLC’s senior legal counsel Ting Shi says the trio of companies that Miniso Guangzhou LLC has made a filing against have “committed acts of bankruptcy,” are insolvent and do not have sufficient assets to pay what they owe.
The lawyer said the company filed the application because it is particularly “concerned that it has lost control of the Canadian operations and, in particular, the Miniso Brand, the integrity of which is likely to be irreparably damaged by the insolvency.” The accusations Miniso Guangzhou LLC and Ting Shi have levelled have yet to be proven in court. The proceedings come as Miniso is staging an ambitious expansion across the country, with locations continuously popping up in Ontario, British Columbia, Alberta and Quebec.
Miniso first entered the market last year with its wide range of household, beauty, technology and food products that it sells for low prices.
At the time, it promised to open 500 locations within three years and industry watchers expected it to threaten Montreal-based bargain brand Dollarama Inc., which has long had a hold on the discount goods market in Canada.