CALGARY — Canadian swimwear brand Swimco Group is seeking creditor protection, citing impacts from the COVID-19 pandemic.
The company filed a notice in June that it intended to make a proposal under the Bankruptcy and Insolvency Act, according to legal documents posted online by Deloitte Restructuring.
Chief executive Lori Bacon says the proposal to creditors would take the company down to 20 stores, from 25, and give the company time to renegotiate leases and downsize its head office.
Among the store cuts that have been decided so far, there are three stores in Ontario and one in Vancouver.
After temporarily closing all stores and laying off all of its workers — more than 200 employees — in March, Swimco has slowly brought staff back. A court document says the company had reopened 17 stores and re-hired 107 workers by the end of June.
Bacon says sales numbers have not gone back to normal level, and the company will likely have fewer staff in the near term to manage its reduced store footprint.
“From mid-March to late May, the Swimco Group’s only source of revenue was from its online sales,” said Bacon in an affidavit.
“When one of (the company’s) landlords demanded payment by a certain date, the Swimco Group elected to seek creditor protection to allow the Swimco Group to reorganize its affairs to better fit with the new retail reality.”
Swimco is one of many Canadian retailers feeling that “new retail reality.” It joins companies such as Reitman’s Canada Ltd., Aldo Group and Mendocino Clothing Co., which have all filed for some sort of protection under bankruptcy laws.
Swimco, which opened its first store in Calgary in 1982, focused its business model on the in-store “fit experts,” who advised shoppers on flattering swimwear styles. The privately held company, which started in the 1970s doing mail order, launched an online version of its fit expert service in 2014.
Bacon says that, while pools are opening, travel remains limited, and she is anticipating that vacationing beach goers could be restricted until 2023 or when a COVID-19 vaccine is available.
Swimco plans to keep its focus on body positivity and flattering clothing, although it may transition to more athleisure as part of the “stay at home” movement around COVID-19, she says.
“Ultimately, when travel reopens, I think there’ll be a huge pent-up demand,” Bacon said, predicting it’s “not the end” for the company.
— By Anita Balakrishnan in Toronto
This report by The Canadian Press was first published July 27, 2020.
The Canadian Press