June 3 (Reuters) - Comark Holdings Inc said on Wednesday it would restructure under the Companies’ Creditors Arrangement Act (CCAA) as the fallout from the COVID-19 pandemic hit the Canadian apparel retailer’s business.
Apparel retailers have been facing mounting debt and bankruptcies as the economic damage brought on by the pandemic has forced store closures and pressured discretionary spending.
The fashion retailer’s Ricki’s, Cleo and Bootlegger websites will remain operational, Comark said, adding it would optimize its store footprint during the restructuring.
Canada’s Aldo Group had also said it would restructure under the CCAA last month, as virus-led lockdowns weighed on the footwear retailer’s business.
The CCAA is a Canadian Federal Act that allows large corporations to restructure their finances and avoid bankruptcy, while allowing creditors to receive some form of payment for amounts owed to them.
The company, which was bought by private equity firm Stern Partners in 2015, said it expects its principal shareholder to participate in the restructuring process and to submit a transaction proposal that would allow it to emerge from CCAA protection. (Reporting by Aditi Sebastian; Editing by Devika Syamnath)