Reitmans to close Addition Elle and Thyme Maternity stores, cut 1,400 jobs
Jun 2, 2020
Reitmans is exiting two of its five fashion banners, as it attempts to re-position the company “for long-term success”, the fashion retailer announced on Monday.
The Canadian company will close its Thyme Maternity and Addition Elle brands over the course of the summer, leaving the company to carry on the legacy of its three premium brands: Reitmans, Penningtons and RW & CO.
As a result, the company will equally be reducing its workforce by approximately 1,100 employees in its retail stores and approximately 300 employees at its head office in Montreal.
"The strategic decision to close two beloved Canadian fashion brands was not made lightly, but it is necessary to enable our business to move forward as a profitable organization,” said Stephen F. Reitman, president and CEO.
“All of the efforts we put forth to turn these brands around were derailed by the Covid-19 pandemic and, unfortunately, we can no longer afford the required resources to bring them back to profitability.”
The Canadian retailer, who filed for creditor protection and obtained an initial order under the CCAA on May 19, 2020, received on Friday an extension of the initial order.
Ernst & Young Inc. was appointed as monitor for the CCAA process and has been assisting the retailer in creating a restructuring plan. As of May 17, 2020, the company had an unrestricted cash balance of approximately $40.7 million.
As of Friday, the company had reopened approximately 380 retail locations. It plans to continue reopening all of its stores including all 77 Addition Elle and 54 Thyme Maternity stores.
The objective will be to liquidate the inventory in anticipation of their permanent closure, which is planned for July 18, 2020 for Thyme Maternity, and August 15, 2020 for Addition Elle. Their respective e-commerce websites are expected to shut down on the same dates.
"With an enhanced product offering at Penningtons, where women can find aspirational and affordable head-to-toe fashion, we will do everything possible to make our Addition Elle community excited to continue to shop with us," added Reitman.
"We are committed to the plus-size market in Canada with both a size-inclusive offering at Reitmans, and dedicated expertise and service at Penningtons. RW & CO. will remain the premier contemporary brand specializing in curated collections of well-crafted city wear for men and women.”
The retailer was already facing financial pressure before the Covid-19 crisis hit. In its most recent quarter, ended November 2, 2019, sales dropped to $222.3 million, as compared with $239.7 million reported during the same period last year.
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