Sheltered from its creditors since May 7, the Aldo Group almost doubled its operating loss in the first quarter when the COVID-19 pandemic disrupted its activities in addition to causing the closure of several of its stores.
–
–
For the quarter ended May 2, the retailer posted a loss of 68.1 million US, compared to 35.1 million US in the same period last year. This information is contained in the most recent report from Ernst & Young, which acts as file controller, dated June 16.
“The Aldo Group continued to post losses in the first quarter, in particular due to the sharp decrease in volumes given that its stores have been closed for an extended period due to the pandemic,” the document reads.
Unlike publicly traded companies, Aldo does not usually publicly disclose its financial performance.
Without precisely quantifying the revenues generated by the shoe and accessories store chain, it is specified that their decline is around 45% compared to the first quarter of the previous year. Spending also fell 23.4%.
Taking into account non-operating items and foreign exchange gains, the first quarter net loss was US $ 48.6 million compared to US $ 46.6 million a year ago.
Since the Quebec company, which also owns the Boutique Spring and Globo brands, turned to the Companies’ Creditors Arrangement Act (CCAA), it has notably eliminated 260 positions at its head office located in the Montreal borough of Saint-Laurent, in addition to issuing 276 notices to renounce commercial leases.
“(The company) continued to manage its operations on a daily basis, which includes the reopening of 199 stores and the planned reopening of 24 outlets that had been closed due to government restrictions,” said the report.
Aldo had previously told The Press that around half of its 725 stores in five countries – which does not take into account franchisees – could be shut down as part of the restructuring. In an interview granted last week to the Bloomberg agency, the Minister of the Economy, Pierre Fitzgibbon, had indicated that Quebec would help the multinational, which could result in the acquisition of a stake in the latter.
Aldo’s receivables are valued at at least CAN $ 640 million, according to the documents available. In particular, it owes nearly CAN $ 40 million to Investissement Québec, the financial arm of the Québec government. The company benefits from the protection of the courts until mid-July.
The economic storm caused by the health crisis has also claimed other victims in the Quebec retail sector. In addition to Aldo, the retailers Reitmans, Sail Plein Air – which was behind the Sail and Sportium banners – as well as Frank And Oak have also decided to take shelter from their creditors.
–
