Fashion giant in Burnaby says future in 'doubt,' abruptly cancels shareholders meeting

Embattled clothing retailer Le Chateau Inc. pulled the plug on its meeting of shareholders on the eve of the annual gathering.

The company – which operates a large store at Metropolis at Metrotown in Burnaby - didn't provide a reason for postponing Thursday's event, saying only it "will provide further updates in due course."

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When Le Chateau reported its second-quarter results last month, it said the company's ability to continue as a going concerns for the next 12 months "involves significant judgment and is dependent on, among other things, its ability to obtain necessary financing, either from its existing lenders or from other financing sources."

“There are material uncertainties that cast significant doubt upon the company’s ability to continue as a going concern,” said a previous news release, which detailed fourth-quarter – for the year ended Jan. 25, 2020 - results that included a sale drop of 6.5% year-over-year and a net loss of more than $51 million.

The retailer also said it had reached agreement with landlords regarding rent obligations as of July.

Le Chateau did permanently close 10 stores previously, but all of its current stores have reopened. Right now, there has been no announcement of new store closures.

le chateau
Le Chateau Instagram

Le Chateau has said it’s negotiating with landlords on lease terms and with creditors to secure more financing.

“Management is currently negotiating its financing requirements with its existing lenders and is in discussions with its landlords, and is seeking other potential sources of financing. … There can be no assurance that availability under the existing credit facilities will be sufficient to finance the Company’s operations to the maturity date of the credit facilities,” said a news release.

Like other retailers, the 60-year-old company has been hit hard by mall closures and store closures resulting from the COVID-19 pandemic.

In Burnaby, Metropolis at Metrotown has seen a long list of store closures, including Microsoft, Frank and Oak, Pink and Freddy Pant Room. In Lougheed Town Centre, Aldo recently held a closing-out sale.

Le Chateau saw its sales plunged to $14.6 million in the three months ending July 25, down from $49.7 million a year earlier.

  • With files from Canadian Press

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