Reitmans Seeks New Money, Warns on its Future as Losses Grow

(Bloomberg) --

Apparel retailer Reitmans (Canada) Ltd. said it is urgently seeking fresh money after existing bank facilities were terminated or reduced and the Covid-19 pandemic hurt business.

“The company is actively seeking additional financing and is also exploring various alternatives,” the Montreal-based clothier said in a May 1 statement. “If the company is unable to obtain such financing in the limited time period required, it may be unable to continue as a going concern.”

The outbreak of the coronavirus is having “significant impacts” as it closed all of its stores March 17, the company said.

Reitmans was already in a weakened state before the virus. The company's net loss for the quarter ending February 1 was C$51.7 million compared with a net loss of C$8.9 million in the same quarter a year earlier. Sales rose 1% and gross profit declined.

The shares have lost 72% this year and 92% since the beginning of last year.

The results “have not met the company's expectations. This is primarily due to the disappointing financial performance of the company's plus-size banners,” the firm said in the statement. “Strategic brand changes implemented at the beginning of the fiscal year failed to resonate with the banners' customer base.”

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