Le Château gets new financing from its founder
Canadian fashion retailer Le Château has once again turned to its founder for financing. The leading Canadian brand has entered into an agreement with Herschel Segal, the founder of Le Château and a Director and a significant shareholder of the Company, for a financing of $1.7 million.
The loan will be secured by the company's property and will be subordinated in terms of ranking and repayment behind its $800-million revolving credit facility.
The company says the financing will provide the retailer with additional capital and financing flexibility, with proceeds being used primarily for working capital purposes.
It's not the first time the Montreal-based company has turned to Segal for financial support. Segal provided the company with $10 million last January.
Le Château has been struggling financially for several years and has suffered from an annual net loss for five consecutive years.
For the third quarter, which ended October 29, 2016, Le Château reported a sales decrease of 3.8 percent, while net loss for the third quarter amounted to $8 million or $0.27 per share.
The Company currently has 192 retail stores located in Canada.
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