Another major Canadian retailer seeks creditor protection

Another Canadian retailer has sought creditor protection amid financial struggles.

Hakim Optical, a large eyewear and optical chain with more than 140 stores across Canada, is the latest company to file for creditor protection under the Bankruptcy and Insolvency Act. But the stores may remain open.

The company filed a Notice of Intention to Make a Proposal on April 16, according to KSV Restructuring Inc. which is appointed as the proposal trustee.

The total amount owed to creditors is more than $25 million, according to a notice to creditors from KSV.

While the chain has filed under the Bankruptcy and Insolvency Act, KSV Restructuring Inc. said “it is important to note that the Company is not bankrupt.”

The filing will help create a stabilized environment to negotiate the sale of the company, the letter states. A senior lender, an Ontario numbered company in Bolton, who is owed approximately $15.8 million, appears to be Hakim Optical’s prospective purchaser, according to a story posted on Retail Insider.

The sale would be subject to court approval.

Retail Insider attributed Hakim’s struggles to pandemic-related closures, the entrance of new players such as Specsavers, and discount eyewear from large retailers like Costco and Walmart.

Several other Canadian companies have announced similar struggles recently including The Bay, Frank and Oak, and Ricki’s.

Hakim Optical’s history dates back to the late 1960s. Karim Hakimi, a Iranian-Canadian entrepreneur, started the company in Toronto. Hakimi started with lens-grinding laboratory in the former Elwood Hotel in a 1967 and sold lenses door-to-door to optician shops, according to an online profile.

There are currently over 140 stores across Canada.

For more information on the filing, see the KSV Restructuring Inc. notices here.

Lead photo: Kaboompics.com