Fairfax Financial sells large stake in Reitmans for about $22 million

A Reitmans store located in Montreal (CTV Montreal/JL Boulch)

TORONTO -- Fairfax Financial Holdings Ltd. says it has sold its stake in clothing retailer Reitmans Ltd. for about $22.2 million.

Toronto-based Fairfax, led by investor Prem Watsa, says it sold nearly 7.4 million Class A non-voting shares representing about 14.8 per cent of outstanding shares for $3 each.

The sale is the result of a substantial issuer bid by Reitmans announced in June to purchase for cancellation of up to 15 million outstanding shares.

It comes nearly six years after Fairfax increased its stake by acquiring two million shares for $6.35 per share, that increased its total holdings to almost 7.1 million shares.

Montreal-based Reitmans is a ladies-wear apparel retailer founded in 1926 that operated 594 stores in Canada under the Reitmans, Penningtons, 80 Addition Elle, RW & Co. and Thyme Maternity banners.

It has been closing stores as it adjusts to competition from U.S. retailers that has hurt sales while increasing its e-commerce business.

Reitmans shares, which have fallen from $20 in 2010, gained 3.3 per cent to $2.79 in Wednesday trading on the Toronto Stock Exchange.