Henry’s restructuring completed, Stein family retains control

The 22-store Canadian photo specialty retailer Henry’s will continue to operate after the Canadian court approved the sale of the company’s assets to Henry Enterprises Inc. from the distressed former owner, Cranbrook Glen Enterprises Ltd. The Stein family, who has owned Henry’s for four generations, will continue to maintain ownership as Henry’s Enterprises. All executive management and the CEO, Gillian Stein, remain.

Cranbrook Glen Enterprises filed a Notice Of Intention To File a Proposal (NOI) for creditor protection May 1, under the Bankruptcy and Insolvency Act, R.S.C. 1985,  listing approximately $24.0 million in liabilities, including $14.8 million to the Bank of Montreal (BMO), $1.3 million to Nikon Canada, $767,000-plus to Gentec International, and more than $700,000 to Fujifilm Canada. Grant Thornton Ltd. was the trustee. At the time of the filing, Henry’s permanently closed stores in Coquitlam, Langley and Victoria in British Columbia; and Brampton, Markham, Nepean, and Sudbury in Ontario. The company cited the on-going retail challenges presented by COVID-19 as an element of the filing.

“The effect of COVID-19 on the economy is unprecedented,” Stein told the Toronto Star on May 4. “The Canadian retail industry has been one of the hardest-hit sectors and Henry’s has felt a dramatic impact. We closed our brick-and-mortar locations to keep our customers and employees safe due to the pandemic, which resulted in a significant impact to sales while still bearing the ongoing operating costs.”

According to court documents, there were five proposals for Henry’s assets, including two liquidation options, one to buy a single store and another proposal for either three stores or six stores. The offer to keep the chain as a going concern – “for an amount equal to the debt owing to BMO for payment of priority payables and the assumption of certain indebtedness” – was the one offered by Henry’s Enterprises.

“We are delighted to receive court approval for the acquisition of the company’s assets by Henry’s Enterprises Inc.,” says Stein. “With the ongoing support of the Bank of Montreal and Grant Thornton, we are in a strong position to continue to serve the creative community for the long term, as a successful market leader. Most importantly, we were able to save important Canadian jobs and keep Henry’s a Canadian, family-owned business.”

Henry’s Enterprises Inc. will take ownership on Aug. 10, 2020. This change will have no impact on customers as the company’s 22 retail stores, Henrys.com and its B2B division will continue to operate, with gift cards and warranties being honored, the company said in a statement.