Luggage retailer Bentley & Co. Ltd. has agreed to be sold to the Quebec businessman behind the Hart chain, court filings show.
While the value and most terms of the deal have not been revealed, the filings made over the course of July say Paul Nassar will purchase all of Bentley's assets, assume most of its leases and offer jobs to the majority of its staff.
Montreal-based Bentley has about 700 employees and at least 130 stores in Canada that sell luggage, handbags, backpacks and other accessories, predominantly through mall shops.
Nassar owns the Hart chain, which is behind the M茅ga Meubles and Maison en gros furniture and home decor retailers. Nassar recently purchased Korvette, a Trois-Rivi猫res, Que.-based discount retailer selling everything from clothes to kitchen gadgets to food and electronics.
Requests for comment on the deal sent to Bentley and some of Nassar's businesses went unanswered.
The change of ownership at Bentley was detailed in documents submitted to a Montreal court as part of a notice of intention, a process under the Bankruptcy and Insolvency Act that gives businesses facing trouble a chance to restructure their operations.
Raymond Chabot Inc., a trustee overseeing the process, said in a report handed to the commercial division of the Superior Court in Montreal that turnaround specialist Hilco Canada and its HUK94 subsidiary, which owned Bentley, started looking for a buyer on June 17.
"Like many other retail chains, Bentley has been facing adverse macro trends, including changing consumer preferences and a general shift away from brick-and-mortar to online retail channels," the trustee said.
"Increased competition from discount and online retailers has exerted significant downward pressure on pricing and margins."
COVID-19 also exacerbated matters. It reduced traffic in stores, prompted mandatory closures and resulted in "severe" supply chain disruptions, which caused "unprecedented strain" and a drop in revenue.
Bentley was coping with the challenges by negotiating better rent terms with landlords, but then it was hit with a ransomware attack in October 2023.
"This attack made it even harder for management to put measures in place, as much data was lost and the company has since been operating with a more rudimentary accounting system," Raymond Chabot said in court filings.
The wave of issues meant Bentley didn't break even in its last fiscal year and owes at least $3 million to landlords and $7 million to suppliers, the filings say.
The situation prompted it to file the notice of intention and consider selling the business.
It reached out to 22 potential buyers, including liquidators, court documents say. Fifteen never answered, seven declined and four expressed interest.
Two of the interested entities, who are not named in court documents, wanted to liquidate the business, but Nassar was keen to buy it and keep it operational.
"The contemplated transaction will make it possible for a number of Bentley鈥檚 employees to keep their job and for landlords to keep a tenant for most existing locations," the report said.
Bentley has restructured twice before, including in January 2008, an application it made to the court said.
Documents say "a private equity fund specialized in mid-market buyouts and creating long-term value" bought the brand eventually.
The documents did not name the owner, but a 2012 press release shows Novacap was behind the sale.
The court filings say by early October 2019, the owner notified Bentley it would no longer be funding its operations. Bentley made a notice of intention again and was then sold to Hilco.
"Despite the fact that Hilco UK, through HUK 94, has invested heavily in Bentley since its acquisition, sales fell short of expectations in recent years and the business has been facing serious liquidity constraints," the court application says.
This report by The Canadian Press was first published July 29, 2024.
Tara Deschamps, The Canadian Press
