Chico’s FAS Canada, subsidiary of US-based women’s apparel retailer Chico’s FAS, filed for bankruptcy on Thursday (30 July) with the Ontario, Canada office of the Superintendent in Bankruptcy.
A regulatory filing yesterday (31 July) with the Securities and Exchange Commission clearly stated that the bankruptcy would mean permanent shutting down of all its 10 stores in Canada.
The 10 stores to be closed, 4 Chico’s and 6 White House Black Market locations, have been shut since March, when coronavirus first started tightening its hold on every retailer across every part of the globe.
While the stores are going to be shut forever, the retailer said that its online operations will continue in Canada.
While corroborating that closure of stores is a part of Chico’s cost-saving measures in Canada, Molly Langenstein, CEO and President, Chico’s FAS, shared that store closure was necessary to address all the operational and financial challenges associated with running its business in the country.
Chico’s FAS is also expecting a non-material charge during FY’20 owing to Canadian bankruptcy. Here it is imperative to state that the firm saw a worrying loss of US $ 178 million in the last quarter due to store closures and prolonged lockdowns.
The company’s stores will start closing down in Canada from this month onwards and may likely conclude in October.
Notably, the shares of Chico’ FAS have been down by over 65 per cent Y-o-Y.
Chico’s FAS runs 4 prominent brands namely Chico’s, White House Black Market, Soma and TellTale and is known for its high-quality womenswear, loungewear and underwear, among others. It generates revenue of US $ 2.1 billion.