Le Chateau has been a part of my life since the 1980s – my entire outfit for Burnaby North Secondary School’s *cough* 1986 grad ceremonies came from there.
So it’s distressing to learn that the fashion giant might not last too much longer in Burnaby at Metropolis at Metrotown.
That’s according to a Le Chateau news release related to its latest earnings report that includes staggering warning.
“There are material uncertainties that cast significant doubt upon the company’s ability to continue as a going concern,” said the 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.
And remember, these dire financial numbers came before the COVID-19 pandemic resulted in the temporary closure of 129 Le Chateau stores in eight provinces, including here in Burnaby.
Expect the next quarterly earnings report to be even more of a bloodbath. A second wave of COVID-19 would be catastrophic.
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. This is different from many other retail companies that have started to close stores forever. Many of these companies have shuttered stores in Burnaby, including Frank and Oak, Addition Elle and Thyme Maternity.
Le Chateau said it’s negotiating with landlords on lease terms and with creditors to secure more financing.
“The Company’s ability to continue as a going concern for the next twelve months involves significant judgment and is dependent on, among other things, its ability to obtain necessary financing,” the news release said. “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.”