Montreal - May. 19, 2020: Reitmans (Canada) Limited ("Reitmans" or the "Company") announces today that it is seeking protection under the Companies' Creditors Arrangement Act (the "CCAA") in order to facilitate its operational, commercial and financial restructuring. Application under the CCAA will be heard by the Québec Superior Court today.
The CCAA process will allow the Company to implement a restructuring plan that addresses the impacts of COVID-19 in order to build a more resilient organization that will be positioned for long-term success. Throughout this process, the Company will remain fully operational through its brands' e-commerce websites; all physical stores will re-open in conformity with provincial and regional governmental guidelines. As the restructuring gets underway, the Company will look to optimize its retail footprint in Canada to emerge from this process in a stronger state. The retail landscape has been in constant flux over the past several years, resulting in the evolution of consumer behavior and purchasing patterns. Reitmans has implemented a successful digital-first strategy, amongst other omnichannel initiatives, to drive sustainable growth in this evolving retail environment. However, the COVID-19 pandemic forced the closure of all retail stores, and pushed the retail industry into a new and unknown era.
Stephen Reitman, President and Chief Executive Officer of Reitmans, and grandson of the Company's founders, said: "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 – we believe that this is the only course of action to ensure we remain successful in the future."
Mr. Reitman added: "We have many strengths: we're the Canadian leader in specialty retail, we have a strong leadership team and talented employees, great national brands, an omnichannel retail strategy with robust online sales, and most importantly, loyal customers who have been shopping on our websites at a record pace since the start of the pandemic. We will dedicate ourselves to the restructuring of our business, and then we'll carry on with what we do best: offering affordable fashion and great service to our customers and communities for many years to come."
Reitmans' Board of Directors, in a unanimous decision and after having extensively considered other alternatives and a number of factors, authorized the Company to seek protection under the CCAA as the best alternative for the long-term interests of the Company, its employees, customers, creditors and other stakeholders.
Interim Financing (DIP)
In conjunction with its filing under the CCAA, the Company has undertaken a process to secure an interim financing (DIP) that shall provide the required liquidity to meet all of the anticipated needs of Reitmans and its brands to continue normal operations following the opening of its retail locations and throughout the CCAA process.
Reitmans is also in discussion with lenders with respect to a permanent financing upon exit from the restructuring process.
Annual General Meeting of Shareholders
The Company is also seeking an order from the Québec Superior Court to postpone its annual general meeting of shareholders for the fiscal year ended February 1, 2020, until further notice following the CCAA process.
About Reitmans (Canada) Limited
The Company is a leading ladies apparel retailer with retail outlets throughout Canada. The Company 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 Company is a publicly traded company listed on the Toronto Stock Exchange (TSX: RET, RET-A). For more information, visit www.reitmanscanadalimited.com.
All of the statements contained herein, other than statements of fact that are independently verifiable at the date hereof, are forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond the Company's control. Such risks include but are not limited to: the impact of the current COVID-19 pandemic on the Company's business and affairs, including the ability to operate the physical stores in conformity with provincial and regional governmental guidelines and timing therefor, the risks and uncertainties related to the CCAA process, including the ability for the Company to obtain financing during and following the CCAA process, general economic conditions, general conditions in the retail industry, seasonality, weather and other risks included in public filings of the Company, including those described in the Operating Risk Management and Financial Risk Management sections of the Company's most recent Management Discussion and Analysis for the fiscal year ended February 1, 2020. Consequently, actual future results may differ materially from the anticipated results expressed in forward-looking statements, which reflect the Company's expectations only as of the date of this press release. Forward-looking statements are based upon the Company's current estimates, beliefs and assumptions, which are based on management's assessment of government publications regarding the COVID-19 pandemic, including on the timing of re-opening of physical stores and on the public health guidelines associated with such re-opening, its assessment of current and future consumer behavior, including the impact of the COVID-19 on such behavior, its assumption that, in the case of the CCAA process, it will obtain all necessary court orders extending the applicable stays of actions and proceedings against the Company to permit it to propose a restructuring plan to the affected creditors, its perception of historical trends, current conditions and currently expected future developments, as well as other factors it believes are appropriate in the circumstances. Specific forward-looking statements in this press release may include, but are not limited to, statements with respect to the capacity to obtain financing. The reader should not place undue reliance on any forward-looking statements included herein. These statements speak only as of the date made and the Company is under no obligation and disavows any intention to update or revise such statements as a result of any event, circumstances or otherwise, except to the extent required under applicable securities law.