Case 34 — Groupe Dynamite · Andrew Lutfy · 2020

Your stores are closed, your rent is not, and the banks are owed C$149M. Do you put the company you have spent 38 years building into creditor protection?

It is September 2020 and you own all of a Montreal women's fashion retailer with two banners, Garage for teenagers and Dynamite for working women, and 322 stores in North America, 85 of them in the United States. The pandemic closed your stores in the spring, and sales are running about 50% below 2019. Online is growing fast, but not fast enough to pay rent on stores nobody can walk into. You owe about C$149M to a syndicate of four Canadian banks, and total liabilities are around C$357M against C$192M of assets. Your leases were signed for a world where malls were full. Your own model, buying late and in small quantities, means you are not sitting on a mountain of unsold stock, which is the one thing going for you.

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