Le Chateau founder loans chain $10M
Clothing retailer Le Chateau Inc. has struck a deal with founder and majority owner Herschel Segal to get long-term financing of $10 million.
The Montreal company said Monday the money — a four-year unsecured loan — will be used for capital spending and other investments.
"The loan will provide the company with additional capital and operational flexibility as all of its existing credit and other facilities remain in place," Le Chateau said in a release.
The company has an operating line of credit of about $20 million as well as an import line of credit of $25 million.
Last month, Le Chateau reported a $4.1 million loss for its latest quarter as consumer caution, unseasonably warm weather and one-time costs associated with some corporate moves hit its bottom line.
The loss amounted to 16 cents per share and compared with a profit of 10 cents per share or $2.5 million in the third quarter ended Oct. 30, 2010.
The retailer said its revenue for the quarter ended Oct. 29 was $70.4 million, down 5.4 per cent from $74.5 million in the year-earlier period.
Le Chateau said traffic at its stores was down and same-store sales at its corporate locations fell by 8.4 per cent compared with a year earlier.
Le Chateau has 244 corporate retail locations, all but two of them in Canada. It also has seven stores under licence in the Middle East and web-based sales in Canada and the United States.