Clothing retailer Mendocino files for insolvency, closes stores

TORONTO – Retailer Mendocino Clothing Co. has filed for insolvency and plans to close its stores to focus on online orders, adding to the growing list of Canadian companies closing their doors this year.

The Toronto-based women’s clothing brand filed a notice of intent on July 14 to make a proposal under Canadian bankruptcy law, according to documents posted on the website of trustee KSV Kofman Inc.

While the company previously announced that it would gradually reopen some of its 28 Mendocino and M Boutique stores in the Greater Toronto Area after it closed in March due to the COVID-19 pandemic, it has now started restructuring proceedings. to move most of its business online.

“Due to the challenges resulting from the pandemic, the company recently made the very difficult decision to shut down all or almost all of its store operations and focus on an e-commerce model,” the company said. administrator in documents.

“The protection resulting from the NOI filing will provide the stability necessary to move forward and execute the corporate restructuring plan.”

The Notice of Intent is the formal first step in filing under Canada’s Bankruptcy and Insolvency Act. The filing gives Mendocino a temporary stay from all proceedings of its creditors.

The documents mentioned the Toronto-Dominion Bank as a secured creditor and owed $ 2.69 million, in addition to the $ 5.78 million owed to unsecured creditors like American Express and OPGI Mgmt.

Despite the Bankruptcy Act filing and implication, KSV noted that Mendocino “is not bankrupt”.

Mendocino, which has been in business since 1987, is joining retailers DavidsTea, Aldo, Victoria’s Secret, Bath & Body Works and other demands for creditor protection as businesses struggle to extricate themselves from the economic impact of COVID-19.


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Anne G. Cash

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