Chico’s Goes Bankrupt in Canada
Chico’s Canada-based business has gone bankrupt.
According to a filing on Thursday with the United States Securities and Exchange Commission, the company’s subsidiary, Chico’s FAS Canada Co., filed for bankruptcy with the Office of the Superintendent in Bankruptcy in Ontario. The proceedings will be conducted through the District Court of Ontario in Canada.
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As part of the move, the apparel and accessories retailer will permanently shutter four of its namesake stores as well as six White House Black Market boutiques in the province. (The locations have remained closed since mid-March as mandated by the government due to the coronavirus outbreak.) The shutdowns of those outposts, which comprise all of the company’s units in the country, would spell Chico’s exit from the Canadian market.
The business added that the closures are part of its “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.” It expects to record a non-material charge to its fiscal 2020 results in connection with the subsidiary’s bankruptcy.
In the United States, on the other hand, Chico’s has already begun reopening stores: The company — also parent to the Soma and TellTale brands — became one of the first nationwide chains to unveil its plan to open back up outposts to the public in late April.
Under its reopening plan, which has three phases, Chico’s began fulfilling national orders using existing inventory in stores. It then started to offer buy online, pick-up in store services, including contactless curbside pickup, which provide customers the option to shop without risking infection through interaction with others. Lastly, it allowed stores to reopen — consistent with local health and safety guidelines — under a new shop-by-appointment service.
As of Feb. 1, Chico’s operated 1,341 units in the U.S. and Canada. Most of its locations are under 3,500 square feet and located in shopping centers. Amid the health crisis, the company has made moves to reduce its operating expenses by roughly 30%. It has also deferred the majority of its payables and said that it was renegotiating its real estate contracts.
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