TORONTO — An Ontario court has granted Comark Holdings Inc. approval to sell its Ricki’s and Cleo banners to the owner of Toys “R” Us Canada and HMV and laid the groundwork for the ailing company to off-load its Bootlegger brand.
Court filings show judge Peter Cavanagh allowed the sale of the struggling apparel retailers to Ancaster, Ont.-based Putman Investments Inc. earlier this month.
The filings say the estimated $12.8 million purchase includes all of the brands’ inventory, furnishings, intellectual property, trademarks and some of its leases.
Most of the workers employed at Ricki’s and Cleo stores will be offered jobs by Putman, which declined to comment on the sale. Comark has 2,056 workers across its three brands.
The deal offers a shot at revival for the companies, which have been on the brink since last month, when Cavanagh granted Comark creditor protection and it began shuttering all of its Ricki’s and Cleo locations.
Comark framed the request for creditor protection as necessary because the brands were battered by the COVID-19 pandemic, a November 2021 ransomware attack, increased competition from ultra low-cost fashion retailers like Shein and Temu and supply chain and vendor issues.
“Notwithstanding their best efforts to reduce expenses, preserve capital and improve profitability, the applicants’ liquidity position continues to rapidly deteriorate, particularly during the traditionally slower post-Christmas retail season,” Comark CEO Shamsh Kassam said in an affidavit filed in court.
As Comark began liquidating its Ricki’s and Cleo stores, court filings say Putman and several other unnamed potential buyers stepped forward with interest in acquiring them.
When Comark set up a more formalized process to offer interested parties access to data about the business and figure out whether any still wanted the brand, only Putman submitted a bid for the Ricki’s and Cleo assets.
Although the bid was “not the result of a formal-approved sale process,” an endorsement from Cavanagh said the steps Comark took were “fair and reasonable” and the deal will allow the brands to continue “with a reduced footprint.”
Court documents show Comark operates 75 Ricki’s stores, 54 Cleo stores, 20 joint locations and about 19 sites the brands split with the company's other banner Bootlegger, which has 53 standalone shops.
In recent weeks, Cavanagh also approved a stalking horse sales process involving Bootlegger, after it drummed up interest from Winnipeg-based jeans retailer Warehouse One.
A stalking horse sales process generally starts with a bidder, known as a stalking horse, that makes an offer for the assets of a troubled company. The stalking horse typically makes their offer low so they can’t be underbid later.
Interested parties have been given until Thursday to submit competing bids. If none are received, Comark will seek court approval for the sale to Warehouse One, which it said intends to continue the Bootlegger brand at 25 of the company’s existing stores.
Court documents do not say how much Warehouse One has offered for Bootlegger, whose website says it is “experiencing a high volume of orders, which may result in a slight delay in shipping.”
Warehouse One’s parent company is Stern Partners, which also owns Tip Top Tailors, Urban Barn, Silver Jeans Co. and Mr. Big & Tall.
A government business registry shows Ronald Stern, founder and president of Stern Partners, is a director and major shareholder of a numbered company that court documents say wholly owns Comark. Stern Partners did not respond to a request for comments.
It’s unknown why Putman didn’t make a bid for Bootlegger.
The company run by Doug Putman, whose steelworker father Bob started Everest Toys in the 1990s, has been building up a retail empire in recent years by buying beleaguered brands.
It purchased Sunrise Records in 2014, HMV in 2019, Toys "R" Us Canada in 2021 and earlier this year, womenswear company Northern Reflections.
In 2020, Putman bought 45 DavidsTea locations when the company filed for bankruptcy protection and turned them into a chain of tea shops called T. Kettle, which now lists just two locations on its website.
It also bought up properties left vacant through Bed Bath & Beyond and BuyBuy Baby's recent bankruptcy to turn them into housewares chain Rooms + Spaces, which has closed most of its stores.
This report by The Canadian Press was first published Feb. 18, 2025.
Tara Deschamps, The Canadian Press
