The Canadian subsidiary of Chico’s FAS inc. filed for bankruptcy Thursday.
The company, Chico’s FAS Canada, filed its petition with the Ontario, Canada office of the Superintendent in Bankruptcy. A regulatory filing with the Securities and Exchange Commission on Friday said the bankruptcy will result in the permanent closure of four Chico’s stores and six White House Black Market boutiques in Ontario. The stores have remained closed since March 17, 2020, due to the coronavirus, or COVID-19, pandemic. The 10 stores comprise the company’s entire store network in Canada. The U.S. operation is operated separately from the Canadian business.
“The company expects to record on a net basis a non-material charge to fiscal 2020 results in connection with the bankruptcy of this subsidiary,” David M. Oliver, interim chief financial officer and senior vice president, controller, said in the filing.
“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,” Chico’s president and CEO Molly Langenstein, said. “The Canadian operations generated negative cash flow during the Company’s last fiscal year ended February 1, 2020. Store closing sales will begin in early August 2020 and continue for approximately 60 days.”
Canadian customers still will be able to shop the company’s fashion merchandise and accessories at chicos.com, chicosofftherack.com, whitehouseblackmarket.com and soma.com, the CEO said. Chico’s Off the Rack is the brand’s outlet concept.
In June, Chico’s posted a first-quarter net loss of $178.3 million, or $1.55 a diluted share, on a net sales decline of 45.9 percent to $280.3 million. Chico’s, like all other nonessential retailers, had to temporarily close stores in mid-March as state and local governments mandated shelter-in-place orders to help curb the coronavirus. At the end of April, Chico’s was also among the first of retailers to begin reopening stores. The company said its stores at shopping centers and strip malls made them the ideal locations for curbside delivery.