Jones New York to close all 37 stores in Canada and liquidate
Chain came close to shutting down last year before finding a buyer, but new owner now quitting
A year after seemingly being saved, womenswear retailer Jones New York says it now plans to close all 37 of its stores across Canada and seek creditor protection.
In court filings this week, the chain of women's clothing stores says it is unable to pay its bills and will now proceed to liquidate its holdings, including all merchandise.
In 2015, the chain's U.S. owners planned to shutter the business in Canada, but ended up finding a buyer in Grafton Fraser Inc., a Canadian company that has been in retail since 1853, and runs chains like Tip Top Tailors and George Richards Big and Tall stores.
Grafton bought the Canadian arm of the chain last summer and planned to expand. But court filings this week show the company hasn't been able to make a go of it in a tough retail environment.
"The company is facing a liquidity crisis as a result of ... unexpectedly high inventory costs an excess inventory hangover from the acquisition of the business in 2015 and lower than expected retail sales," the company said in a filing dated June 6.
There are 37 Jones New York stores across Canada, with 300 employees. The stores are primarily in the eastern part of the country, with 23 stores in Ontario and seven in Quebec.
According to filings, the chain is in default to its lenders, which includes CIBC. The bank is owed more than $30.4 million.
Jones New York had been trying to find a partner or buyer since April 21, and set a deadline of May 19 for offers. It got two. Both planned to liquidate the company, which is what is now happening.