Dive Brief:

• Chico's FAS Canada on Thursday filed for bankruptcy with the Ontario, Canada, office of the Superintendent in Bankruptcy, according to a filing with the U.S. Securities and Exchange Commission.

• The move will entail the permanent closure of all four Chico's and six White House Black Market stores in Ontario, which never reopened since closing in mid-March due to the COVID-19 pandemic, the company said.

• The apparel retailer turned to bankruptcy, which will be conducted at the District Court of Ontario, Canada, as part of "ongoing cost-savings measures taken to mitigate the impact of the COVID-19 pandemic" and to address what it called "the operational and financial challenges associated with operating in Canada."

Dive Insight:

Because Canada is so spread out, it can be notoriously difficult to run the back-end operations of a retail enterprise there. Just ask Target. 

And that's on a good day. With the pandemic holding on and even escalating in some areas of North America, it's arguably very much bad days for retail. The locations slated for closure due to the bankruptcy represent all of Chico's FAS stores there, according to its filing. The company also said it "expects to record on a net basis a non-material charge to fiscal 2020 results in connection with the bankruptcy of this subsidiary."

Still open to question is the fate of the company's U.S. operations, where cost containment is also in focus. A company spokesperson didn't immediately return requests for comment regarding its U.S. plans.

There are some recent clues, however. In an effort to slash expenses by about a third, Chico's in April announced "a significant restructure" that entailed the elimination of two executive positions, chief of its intimates group and COO. At that point the company announced Molly Langenstein, who had been president of its two largest brands, Chico's and White House Black Market, would replace company president and CEO Bonnie Brooks in June. 

Langenstein herself had arrived as part of a leadership shakeup a year ago. In 2019, the company announced the closure of 250 stores. In April, MKM Partners Managing Director Roxanne Meyer predicted that in the end "Chico's could be forced to close over half its full-price stores, shutter its made-for-outlet business, or wind down/sell the Chico's brand altogether," in part due to challenges wrought by the pandemic.

The two banners being shut down in Canada had begun to show some signs of stability in the U.S. before the disease outbreak, but now are among the least likely to withstand its challenges due to their focus on an older consumer and on more formal merchandise, Meyer also said.