- Le Château’s (CTU) next 12 months remain in doubt, after the company’s already struggling financials were hit by the COVID-19 pandemic
- The fashion design and retail company generated a first quarter net loss of C$13.35 million, compared to a net loss of $10.8 million in 2019’s same quarter
- COVID-19 related government shutdowns caused a steep drop in the company’s sales, which are down 51 per cent to $17.7 million compared to last year’s same quarter
- Consequently, the company’s ability to continue operating remains unclear and it is currently exploring re-financing options
- Le Château is holding steady and is trading at 3.5 cents per share
Le Château’s (CTU) next 12 months remain in doubt, after the company’s already struggling financials were hit by the COVID-19 pandemic.
The fashion design and retail company generated a first quarter net loss of C$13.35 million, deepening its losses compared to a net loss of $10.8 million in 2019’s same quarter.
COVID-19 related government shutdowns caused a steep drop in the company’s sales, which are down 51 per cent to $17.7 million compared to last year’s same quarter.
In response to its struggling economics, the company has implemented a strategic plan to better position it in the coming quarters.
As a result, Le Château will reduce its brick and mortar shops and then optimise its remaining locations, as well as shifting focus to its online e-commerce stores.
This initiative was first brought in more than five years ago, following a trouble few years for its financials, but now the company is doubling down on the stategy as its figures continue to worsen.
Despite the plan, the company’s next 12 months remains a going concern unless it can successfully renegotiate the terms of its defaulted loans and obtains much needed financing.
If this can be achieved, the company believes its switch to an online focus will position it well for a post-COVID retail environment.
“While our industry has been hit particularly hard by the unprecedented social and economic impacts of the COVID-19 pandemic, we acted swiftly to preserve our financial position, and to safeguard the health and safety of our clients and employees, in addition to providing support to our community.
“With most of our stores now open across Canada, we look forward to continuing to serve our customers safely, supported by our e-commerce business,” said the company’s executive team in today’s quarterly release
Le Château is holding steady and is trading at 3.5 cents per share at 12:55am EDT.