Business

Toronto-based fashion chain Mendocino won't reopen its stores

Toronto-based women's fashion chain Mendocino has announced it plans to restructure itself under bankruptcy laws, a move that will result in "all or substantially all" of its 28 stores in Canada staying closed for good.

Chain shut down due to the coronavirus, but now says it will pivot to online selling almost exclusively

Mendocino says it wont reopen its 28 Toronto-area stores and will instead focus on selling online. (JHVEPhoto/Shutterstock)

Toronto-based women's fashion chain Mendocino has announced it plans to restructure itself under bankruptcy laws, a move that will result in "all or substantially all" of its 28 stores in Canada staying closed for good.

Like many others, the chain shut down its physical stores in March, when the coronavirus pandemic started in Canada. It began a cautious process of reopening some of them in late June, when restrictions lifted.

But the company filed paperwork last week to suggest that it is scrapping those reopening plans and instead intends to turn itself into an online-only seller of women's clothing.

"As a result of challenges resulting from the pandemic, the company recently made the very difficult decision to discontinue all or substantially all of their store operations and to focus on an e-commerce model," the chain said.

In paperwork posted online by the insolvency trustee handling the restructuring, Mendocino reveals it owes $2.8 million to its main lender, TD Bank, and $5.7 million to various other unsecured creditors, including landlords, suppliers, and other payment processing companies.

Founded in 1987, Mendocino has a half-dozen stores under its eponymous brand name and two-dozen of the lower-priced M Boutique. According to trade publication Insolvency Insider which first reported the plans, the chain has 28 stores in the GTA.

It's the latest Canadian retailer to succumb to COVID-19, joining Aldo, Reitmans and DavidsTea in announcing restructuring plans in recent weeks that will result in the closure of all or some of their physical stores.

More to come.

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