CPE News (7/3/2020) – On June 22, 2020, Modasuite Inc., dba Frank & Oak, filed a notice of intention to file a proposal pursuant to Bankruptcy and Insolvency Act (BIA). KPMG Inc. has been appointed as Trustee under the proposal.
As of June 22, 2020, Modasuite owed $5.720 million to one secured creditor, Fédération des caisses Desjardins du Québec, $1.973 million ($1.248 million of which is sales taxes payable) to priority claims/preferred creditors, and $11.264 million to unsecured creditors.
Modasuite’s tangible assets included $2.8 million in cash and restricted cash, $4.5 million in receivables, $7.1 million in inventory, and $2.6 million in fixed assets.
For the ten months period ended April 30, 2020, Modasuite reported a net loss of $7.9 million before taxes. For the twelve month periods ended on June 30, 2019, and July 1, 2018, Modasuite reported net losses of $6.3 million and $10.4 million before taxes respectively.
Since 2016, Modasuite has raised over $38 million in equity and bridge financings with its most recent financing closed in June 2019.
Modasuite major investors include Caisse de dépôt et placement du Québec (CDPQ), Goodwater Capital, and Investissement Québec (IQ). Other investors include Rho Canada Ventures, Real Ventures, Campfire Capital, and private investors.
Operating originally and solely as an online business, Modasute later expanded and opened retail stores. Currently, it operates 19 retail stores in BC, Alberta, Ontario, and Québec. The company has about 350 full-time and part-time employees.
The objective of the BIA filling is to 1) reduce its Canadian retail footprint through liquidations and closure of certain stores, 2) reduce operating costs to attain profitability, and 3) launch a sale and investment solicitation process (SISP).
photo credit: Frank And Oak