In the last week three more well-known retailers have been forced to seek creditor protection amid the pandemic-related shrinkage in consumer spending. Geox Canada, a shoe and clothing retailer with 30 stores, has seen its sales for the first half of 2020 drop to half that of 2019. Its restructuring under the Bankruptcy and Insolvency Act will focus on store closings and stronger e-commerce.
Groupe Dynamite, a retailer under the Garage and Dynamite banners with over 300 stores across North America, has also sought protection, but under Canada’s other restructuring statue the Companies’ Creditors Arrangement Act. Again, a halving of revenue year-over-year prompted the filing. Although their e-commerce channel saw significant growth, this was not enough to overcome the steep drop-off in business at bricks-and-mortar locations and many such locations will need to be shed or substantially renegotiated.
These latest casualties join a long list of struggling or closed Canadian retailers, big and small, including Ronsons Shoes, Reitmans, Aldo Shoes and Davids Tea. For landlords and suppliers to such businesses, experienced advice is crucial to responding to the challenge presented by such restructurings.