The McNally Robinson store at Grant Park Shopping Centre in Winnipeg is one of the company's two remaining locations. (CBC)

McNally Robinson Booksellers has emerged from bankruptcy protection and the owner of the company believes there is still a strong future for the industry.

A bankruptcy court on Monday concluded hearings on restructuring the company, said owner Paul McNally.

"It's a conclusion of a process that was punishing [and] very emotional," he said.

"It involved terminating a lot of employees and as you surely know, is deeply emotional and painful. A lot of money was lost."

The company, founded in Winnipeg in 1981, was forced in December to close two of its four Canadian stores — one in Toronto and one in Winnipeg — as it filed for bankruptcy protection in an effort to reorganize.

A total of 175 people lost their jobs as the store at Polo Park Shopping Centre in Winnipeg was shuttered along with a location at the Shops at Don Mills in Toronto.

'It was clear from the opening sales at Don Mills that we had entered into a death spiral.'—Paul McNally

The Toronto store had just opened in April, while the Polo Park store opened in 2008.

A news release in December announcing the decision to close the stores and seek bankruptcy protection cited factors such as the economic downturn and competition from the internet and electronic book publishing as impacting the business.

On Tuesday, McNally said the Toronto store was a mistake. It was opened in the wrong location and the wrong time and ended up being one of the biggest reasons the company suffered such significant losses, he said.

"I don't know if anyone was as disappointed as us but we were surely deeply disappointed. It was clear from the opening sales at Don Mills that we had entered into a death spiral," he said.

Insolvency documents filed with Industry Canada show the company posted losses of more than $2 million in the 2009 financial year.

McNally said the bankruptcy court has approved his family's control of the remaining store in Winnipeg — in the Grant Park Shopping Centre — and the one in Saskatoon.

Those two stores, which employ about 250 people in total, have always been profitable, McNally said.