(Reuters) - Canadian fashion retailer Le Chateau Inc said on Friday it had sought creditor protection and was preparing to liquidate its assets and wind down operations after taking a hit from the COVID-19 impact.
The 60-year-old chain, which sells occasion- and party-wear, saw its sales slump 72% in the second quarter ended July 25, as Canadians avoided venturing out due to fears of contracting the coronavirus.
Apparel retailers across the globe have been facing mounting debt and bankruptcies as the virus outbreak wreaked havoc on the economy.
Le Chateau, which operates 123 stores, said it could no longer continue its operations as a going concern and filed an application under the Companies’ Creditors Arrangement Act to ensure an orderly liquidation of its assets.
“The retail industry faced numerous challenges due to the ongoing COVID-19 pandemic and the second wave currently hitting our communities across Canada,” Le Chateau said.
Montreal-based Le Chateau has 900 retail employees and employs 500 people at its head office.
Reporting by Praveen Paramasivam in Bengaluru; Editing by Shailesh Kuber
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