Another clothing retailer now files an unexpected bankruptcy to liquidate and close all 56 of its North American stores.
Luxury apparel chain Ted Baker Canada, which operates 31 Ted Baker stores in the U.S., nine in Canada, eight Brooks Brothers Canada shops, and seven Lucky Brand Canada stores, filed for restructuring under Canada’s Companies’ Creditors Arrangement Act and for Chapter 15 bankruptcy to liquidate and close all 56 of the North American stores.
Ted Baker Canada on April 24 filed for CCAA protection in the Ontario Superior Court of Justice to stay all court proceedings by creditors while it reorganizes in the Canadian court.
It also filed for Chapter 15 in the U.S. Bankruptcy Court for the Southern District of New York seeking recognition of its Canadian case as a foreign main proceeding, which stays all court proceedings against the debtor in the U.S.
The Canadian court on May 3 approved the debtor’s liquidation process, while the U.S. court on May 8 approved the liquidation process and recognized the CCAA proceedings.
Ted Baker will offer up to 30% savings off original prices on its high-end men’s and women’s designer apparel and accessories at the 31 U.S. and nine Canada stores and its high-end luxury apparel for men, women and children and home furnishings in the eight Brooks Brothers Canada stores during its liquidation sales, according to a May 10 statement.
The debtor will also offer up to 30% off on all men’s and women’s casual apparel at its seven Lucky Brand Canada stores. The above discounts will not be offered on the brands’ e-commerce sites.
Ted Baker’s senior lender CIBC approved up to $7 million in interim financing under its existing credit facilities.
The lender also agree to provide up to $28 million in debtor-in-possession financing under a revolving credit facility from CIBC.
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Other Economy News Today
A whopping 3,000 retail stores will now close this year after popular clothing brands Rue21 and and Express announced their closures.
The list now grows to approximately 3,100 stores shutting down by the end of this year, per The-Sun.
And this number figure is expected to grow as more businesses announce closures throughout the remainder of the year.
Rue 21 recently announced bankruptcy and a plan to close all 540 remaining stores across the US in the next six weeks.
Express also announced plans on closing over 100 stores across the US in addition to a store closure in Central New York.
If the rising rate of retailers closing down stores continues, an estimated 8,000 locations will be closed by the end of the year.
That many closures would be 40% more than the US saw last year.
In 2023, over 4,000 retailers shut down stores, which was twice the amount of store closures from 2022, according to the National Retail Federation.
2023 also saw the closing of hundreds of Bed, Bath and Beyond stores after the major retailer filed for bankruptcy.
The retailer cited inflation as the primary reason for shutting down its in person stores, moving to an online only format.
The inflation rates from January 2023 to January 2024 increased by 3.1%, with food prices rising by 2.6%, as reported by the Bureau of Labor Statistics.
In response to the rising rate of inflation, many stores are raising prices or risk closing.
One Canadian supermarket, Loblaws, raised its food prices so dramatically that customers are staging a boycott for the whole month of May.
The Dollar Tree, a retailer known for everything in its stores being $1 or less, announced that it will be raising prices on certain items to as high as $7.
“This year, across 3,000 stores, we expect to expand our multi-price assortment by over 300 items at price points ranging from $1.50 to $7,” the company’s CEO, Rick Dreiling, said during an earnings call.
The last time the discount chain announced a price hike was in 2021 when prices on select items went from $1 to $1.25.
Aside from raising its prices, Dreiling also announced that over 1000 stores will most likely be closing in 2024.
Other major retailers such as Walgreens, Walmart, and JCPenney announced major closures this year.
Walmart announced store closures in California, Ohio, and Maryland–totaling to six closures so far this year.
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