Chico’s FAS Canada Files for Bankruptcy
Chico’s FAS Canada, a subsidiary of Chico’s FAS, on Thursday filed for bankruptcy with the Ontario, Canada, office of the Superintendent in Bankruptcy.
The retailer said it plans to permanently close all 10 of its stores in Canada — four Chico’s and six White House Black Market locations, all of which have been closed since mid-March to prevent the spread of the coronavirus — but will continue to operate its e-commerce platforms in Canada.
“The closure of the Canadian boutiques is part of the company’s ongoing cost-savings measures taken to mitigate the impact of the COVID-19 pandemic and address the operational and financial challenges associated with operating in Canada,” Molly Langenstein, chief executive officer and president of Chico’s FAS, said in a statement.
She added that the Canadian operations generated negative cash flow during the company’s last fiscal year, which ended Feb. 1.
The Canadian stores will begin closing sales in early August and will continue for about two months. Meanwhile, the chicos.com, chicosofftherack.com, whitehouseblackmarket.com and soma.com Canada businesses will resume operates as normal.
Chico’s FAS, which houses the Chico’s, White House Black Market, Soma and TellTale brands, reported a $178 million loss last quarter because of the coronavirus shutdown. The company is now also anticipating a non-material charge during fiscal year 2020 because of the Canadian bankruptcy.
As of May 2, the retailer operated 1,332 stores between the U.S. and Canada. It also sold merchandise through 70 international franchise locations in Mexico and two domestic airport locations. During June’s conference call announcement, executives told analysts that the company had plans to close between 50 and 60 stores this year.
Shares of Chico’s FAS, which are down more than about 65.5 percent year-over-year, were trading down nearly 7 percent during Friday’s session.
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