Le Chateau Inc.
TSX : CTU.A

Le Chateau Inc.

April 01, 2015 17:21 ET

Le Chateau Inc.: Long-Term Financing to Support New Concept Store Renovation Program

MONTREAL, QUEBEC--(Marketwired - April 1, 2015) - Le Château Inc. (TSX:CTU.A) has entered into an agreement with a Corporation controlled by Herschel Segal, the founder of Le Château and a Director and majority shareholder of the Company, for long-term financing of $5.0 million.

This loan, in line with our current business plan and strategy, will provide the Company with additional capital and financing flexibility, with proceeds being used primarily towards the Company's new concept store renovation program which includes the following stores:

Scarborough Town Centre in Ontario (opened April 1, 2015)
Fairview Pointe Claire in Quebec (May 2015)
Yorkdale Shopping Centre in Ontario (July 2015)
St. Laurent Shopping Centre in Ottawa, Ontario (August 2015)
Mayfair Shopping Centre in British Columbia (August 2015)

With the above-mentioned stores, a total of 20 stores will have been converted to the new concept stores since the fall of 2011.

The financing is in the form of a secured loan which bears interest at an annual rate of 7.5%, is repayable at maturity on January 31, 2020, and may be prepaid, in whole or in part, at any time. The parties have concurrently amended the existing $5.0 million loan to extend its maturity from January 31, 2016 to January 31, 2020 and to secure it on the same basis as the new $5.0 million loan. The loans will be secured by all the Company's property and will be subordinated in terms of ranking and repayment to the Company's $80.0 million asset based credit facility.

The transaction was approved by all of the disinterested directors of the Company and is exempt from the requirements to obtain an independent valuation or minority approval under the related party transaction rules of applicable securities legislation.

Profile

Le Château is a leading Canadian brand in specialty retailing, offering a broad array of contemporary fashion apparel, accessories and footwear for style-conscious women and men. The Le Château brand is sold exclusively through the Company's 222 retail locations, of which 221 are located in Canada. The Company's retail locations are primarily found in major urban shopping malls, as well as street-front locations with high pedestrian traffic. In addition, the Company has 4 stores under license in the Middle East. Le Château's web-based marketing is further broadening the Company's customer base among internet shoppers in both Canada and the United States. With its 55-year tradition of vertical integration, emphasizing a design and manufacturing approach to retailing, Le Château is unique among Canadian fashion merchants.

Forward-Looking Statements

This news release may contain forward-looking statements relating to the Company and/or the environment in which it operates that are based on the Company's expectations, estimates and forecasts. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond the Company's control. A number of factors may cause actual outcomes and results to differ materially from those expressed. These factors also include those set forth in other public filings of the Company. Therefore, readers should not place undue reliance on these forward-looking statements. In addition, these forward-looking statements speak only as of the date made and the Company disavows any intention or obligation to update or revise any such statements as a result of any event, circumstance or otherwise except to the extent required under applicable securities law.

Factors which could cause actual results or events to differ materially from current expectations include, among other things: the ability of the Company to successfully implement its business initiatives and whether such business initiatives will yield the expected benefits; competitive conditions in the businesses in which the Company participates; changes in consumer spending; general economic conditions and normal business uncertainty; seasonality and weather patterns; changes in the Company's relationship with its suppliers; lease renewals; information technology security and loss of customer data; fluctuations in foreign currency exchange rates; interest rate fluctuations; liquidity risk and changes in laws, rules and regulations applicable to the Company. The foregoing list of risk factors is not exhaustive and other factors could also adversely affect our results.

Contact Information

  • Le Chateau Inc.
    Emilia Di Raddo, CPA, CA
    President
    (514) 738-7000

    Le Chateau Inc.
    Johnny Del Ciancio, CPA, CA
    Vice-President, Finance
    (514) 738-7000

    MaisonBrison
    Pierre Boucher
    (514) 731-0000