Montreal fashion brand Frank and Oak, over $70M in debt, files for creditor protection

Montreal-based retailer Frank and Oak has filed for creditor protection for the second time this decade, seeking relief from $71 million in debt.

The sustainable fashion brand filed for creditor protection just before the Christmas holiday, according to Le Journal de Montréal, which first reported the news on Monday. It has been owned by New York-based fashion firm Unified Commerce Group (UCG) since 2020.

As Frank and Oak’s creditors, UCG and Desjardins are owed $55.5 million, and the company owes an additional $14.6 million to unsecured creditors, including Canada Border Services Agency, the Canada Revenue Agency and Shopify.

Accounting firm PricewaterhouseCoopers Inc. has been appointed its trustee during the proceedings.

The brand first sought creditor protection in June 2020 as the retail sector struggled with the closure of non-essential stores during the COVID-19 pandemic. The company said in court filings that it’s still facing challenges from that time.

Damien Silès, director of the Retail Council of Quebec, told CBC News other contributing factors include slow retail spending by consumers, as well as aggressive competition from ultra-fast fashion brand Shein and online retailer Temu.

A company press release shared with CBC News says Frank and Oak is exploring options to restructure its business. It will continue to operate normally with “minimal” disruption to employees and customers.

“The primary goal is to preserve the business, safeguard jobs and explore potential solutions, including attracting an investor or identifying a buyer for the brand,” the press release says.

Frank and Oak was launched as an online brand by co-founders Ethan Song and Hicham Ratnani in 2012. As of this year, it operates 15 brick-and-mortar locations across the country in Quebec, Nova Scotia, Ontario and B.C.