UCG Canada Holdings (UCG)—which does business under the name of clothing seller Frank And Oak—is set to close all of its stores and sell its brand, marking the end of an era for a former heavy-hitter in Montréal’s retail tech scene.
In the filing, the company said that it faced significant financial difficulties and couldn’t fund ongoing operations.
The company is being sold to 70-year-old Montréal hosiery manufacturer Lamour Group, as well as Saint-Laurent, Que. company Thread Collective, whose brand portfolio includes Bebe and Hurley. The Frank and Oak brand will continue on under new ownership, the company said, but UGC, which is its sole shareholder and largest creditor, has signalled it intends to file for bankruptcy and wind down its operations.
Canadian customers will still be able to purchase items on liquidation through its online store until inventory is depleted.
The news follows a turbulent five years for the e-commerce retailer turned sustainable fashion brand. Frank And Oak filed for creditor protection in December for the second time this decade. It owes a total of $71 million, including more than $55 million in secured debt to UCG and $14.6 million in unsecured debt to creditors such as Shopify, the Canada Revenue Agency, and the Canada Border Services Agency.
In the filing, the company said that it faced significant financial difficulties and couldn’t fund ongoing operations. It blamed continued impacts of the COVID-19 pandemic and supply chain issues, including delays in spring 2024 due to the “conflict in Gaza.”
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Frank and Oak was sold to UGC in 2020 as part of creditor protection proceedings. It first filed for creditor protection in June 2020, citing COVID-19 forcing the closure of retail stores, lost profitability, and decreased investor interest. But the documents also revealed losses in 2018 and 2019.
Instead of pivoting to digital like many other retailers, Frank and Oak began solely as an e-commerce operation. It then opened brick-and-mortar stores and expanded into women’s clothing and sustainable fashion as its sales grew.
Founded in 2012 by Ethan Song and Hicham Ratnani, Frank and Oak evolved out of the men’s clothing e-commerce startup Modasuite, which launched in 2010 and was backed by Real Ventures. The retailer raised roughly $40 million from firms including Rho Canada Ventures, Caisse de dépôt et placement du Québec (CDPQ), Goodwater Capital, and the Québec government’s investment arm, Investissement Québec.
In an email to customers today titled “The End of an Era,” Frank And Oak said that all 14 of its remaining stores would close by May 18.
“We are hard at work with new partners to determine a better future for the brand, and we hope to come back stronger than ever, with promising new chapters ahead,” the email reads.
Feature image courtesy Frank And Oak.