TORONTO – Danier Leather Inc. said hello has entered insolvency proceedings in order to protect itself from creditor lawsuits because it seeks a purchaser.
The well-known retailer of leatherwear and accessories said the move was necessary due to ongoing financial problems, including a lot more than $27 million in financial losses over the last 2 yrs despite its best efforts to cut costs and switch the business around.
The company lost nearly $20 million in its 2015 fiscal year as sales fell 14 per cent after contracting by 10 per cent the year before.
Danier said hello expects to get rid of much more money in 2016 as operating losses have continued.
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CEO Jeffrey Wortsman said in Danier’s most recent annual report that the company had failed to offer clothing and accessories that aligned with design.
Danier has signed an agreement with GA Retail Canada to take over its stores and sell off its inventory and retail furniture if it doesn’t find another buyer.
The company said it’s not bankrupt which has enough cash to keep its stores open and pay its staff as it seeks to avoid liquidation.
After declaring insolvency, Danier becomes protected against further court proceedings against it from the creditors.
