Retailer behind Garage, Dynamite latest company hit by pandemic

Shoppers walk past boarded up stores on Montreal's Sainte-Catherine street on Wednesday, June 3, 2020. THE CANADIAN PRESS/Paul Chiasson

TORONTO — Montreal-based Groupe Dynamite, Inc. filed for creditor protection this week under the Companies’ Creditors Arrangement Act (CCAA) and will restructure its business, becoming the latest retailer crippled by the economic fallout of the pandemic.

The company behind the Garage and Dynamite store brands said COVID-19 caused an “unsustainable strain” on the business, which includes more than 300 North American stores -- 85 of them located in the United States. It said it was also filing for Chapter 15 bankruptcy in the U.S. The company indicated it would close some stores, but did not specify how many.

“This pandemic has created a corporate tsunami,” executive chairman Andrew Lutfy said in a statement.

“We’ve come to terms that the impacts of COVID-19 will be felt until such time as we can dance at weddings and crowd into office elevators, and have open borders without quarantine restrictions.”

Read More: These retailers are closing Canadian locations in 2020

Founded in 1975, the company said it had come off a record year in 2019 and was exceeding expectations in early 2020, before COVID-19 hit. The company said that its online business experienced strong growth in the last six months, but not enough to offset the losses at its bricks and mortar locations.

Lutfy said that its 530 head office and warehouse employees would not be impacted by the restructuring, and that there would be minimal impact to the company’s 3,800 store employees, who would be offered relocation options in the event their store is permanently shuttered.

A number of other Canadian retailers based in Quebec have also filed for creditor protection since the pandemic, including Reitmans, Aldo, Tristan, Lole, David’s Tea, and many others.