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Be the first with the news that moves the market- Long embattled fashion retailer Le Château (CTU) has slipped back into profit, despite an arduous year to date and looming financial hurdles yet to be rectified
- After a difficult few years beforehand, Le Château was hit dramatically by the onset of COVID-19 and the resulting government mandated lockdown causing it to compound its already heavy losses, earlier this year
- However, in the company’s most recent second quarterly report Le Château pushed back into profit, posting C$337,000 in net earnings, compared to a $13.3 million net loss in the first quarter of 2020
- Despite the financial improvements, the company still posted a half-year net loss of around $13 million and continues to face refinancing issues regarding its loan facility
- Le Château (CTU) is up 20 per cent and is trading at three cents per share
Long embattled fashion retailer Le Château (CTU) has slipped back into profit, despite an arduous year-to-date and looming financial hurdles ahead.
After a difficult few years beforehand, Le Château was hit dramatically by the onset of COVID-19 and the resulting government mandated lockdown causing it to compound its already heavy losses, earlier this year.
In the company’s second quarterly report of the year, however, Le Château pushed back into profit, posting C$337,000 in net earnings, compared to a $13.3 million net loss in the first quarter of 2020.
The company attributed much of its improving profits to an increase in e-sales, as it transitions from brick-and-mortar stores to a more online focussed sales approach.
Earnings before interest, tax, debt and amortisation also followed the improving trend, flipping from a $2.4 million loss in the previous quarter to positive earning of $2.74 million in this latest report.
Despite the financial improvements, the company still posted a half-year net loss of around $13 million and continues to face heavy challenges ahead if it wishes to continue operating.
After revealing its operations were a going concern earlier this year, the company defaulted on its revolving credit facility and is still searching for sufficient refinancing to, once again, become monetarily stable.
That said, Le Château was able to renegotiate terms with its landlords this quarter, buying it further time to re-organise and refinance, once the impact of the pandemic finally abates.
Commenting on its recent operational difficulties, the Le Château team remained optimistic, despite the challenges ahead.
“Through our 60-year history, we have experienced many shifts in the retail landscape and have proven time and again our ability to adapt,” they said.
Le Château (CTU) is up 20 per cent and is trading at three cents per share at 11:31pm EDT.
