The Canadian retail landscape faces a significant shake-up in the new year as several well-known brands file for creditor protection and announce store closures. Comark Holdings Inc., the parent company of Ricki’s, Cleo, and Bootlegger, and UCG Canada Holdings Inc., operating as Frank and Oak, are among the retailers navigating turbulent waters.
Comark’s Financial Challenges
Comark Holdings, known for its women’s and casual apparel brands, filed for protection under the Companies Creditors Arrangement Act (CCAA). This move is accompanied by plans to close all Ricki’s and Cleo’s locations, primarily catering to officewear needs. Court documents reveal Comark oversees 75 Ricki’s stores, 54 Cleo locations, and 20 joint outlets, with additional shared spaces with its Bootlegger banner.
The company operates 53 standalone Bootlegger stores and employs over 2,000 people across Canada. In court filings, CEO Shamsh Kassam disclosed that Comark owes approximately $61 million to creditors, including vendors and landlords.
Kassam cited multiple factors behind the financial strain, including the lingering effects of the COVID-19 pandemic, a ransomware attack in late 2021, and increased competition from low-cost retailers like Shein and Temu.
“Despite efforts to cut expenses and improve profitability, liquidity issues have worsened, especially during the post-Christmas retail slump,” Kassam noted. He added that certain vendors had ceased shipments or halted production for upcoming collections.
Frank and Oak’s Restructuring Efforts
Montreal-based Frank and Oak has also sought creditor protection as it explores restructuring options. The retailer operates 15 stores nationwide and aims to safeguard jobs while searching for investors or buyers to secure its future.
Court filings indicate the company owes $71 million to creditors, including textile suppliers, landlords, and utility providers. CEO Dustin Jones attributed the challenges to financial setbacks stemming from the pandemic.
In a message to creditors, Jones emphasised the company’s commitment to developing a restructuring plan to sustain operations and maintain business relationships.
Industry Insights and Expert Opinions
Retail strategist Liza Amlani described the difficulties faced by these brands as emblematic of deeper issues within the sector. “Stores like Ricki’s and Cleo often feel outdated, with excess inventory and heavy markdowns suggesting a disconnect from customer preferences,” Amlani said.
She also critiqued Frank and Oak’s offerings, calling them “uninspired” and pointing to deficiencies in customer service at its locations.
However, Amlani downplayed that these closures signal widespread trouble for the retail industry. “Consumers are more intentional with their purchases,” she explained. “With abundant online and offline options, shoppers are exercising greater discretion.”
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Broader Retail Trends
The struggles of Comark and Frank and Oak coincide with other significant developments in Canadian retail. Toys “R” Us Canada recently announced the closure of five Ontario locations while planning to incorporate play spaces and expand its HMV brand offerings.
The Body Shop Canada also revealed plans to close several stores as it negotiates a sale to a Serruya Private Equity Inc. affiliate in Markham, Ontario.
Despite these setbacks, industry experts like Amlani remain optimistic. “The retail landscape is evolving,” she said. “Success will depend on adapting to consumer behaviour and leveraging digital platforms to stay competitive.”
The year ahead may hold challenges for Canada’s retail sector, but it also presents opportunities for reinvention and growth. Whether these brands can weather the storm will depend on their ability to pivot and meet the needs of today’s discerning consumers.
