Ransomware, disease and ‘ultra low-cost retailers’: Why 3 iconic Canadian

For three weeks in November and December 2021, iconic Canadian clothing chains Bootlegger, Cleo and Ricki’s found themselves paralyzed — staring down the barrel of the “critical holiday season” but prevented by ransomware from moving inventory.

The attack occurred on Nov. 23, but the businesses weren’t able to regain access to their internal systems until Dec. 13 — a lag time that forced the 221 affected stores to mount heavy promotions in order to offload the substantial portion of seasonal clothing caught up in the delay.

According to court documents filed as part of insolvency proceedings by Winnipeg-based Comark Holdings — the company which owns all three retailers — the “brick and mortar stores lost approximately $8.2 million in revenue due to the cyber incident alone.”

Headwinds for clothing retailers

Chief executive officer Shamsh Kassam’s affidavit provides a detailed window into the array of problems which forced Comark into creditor protection: the ransomware attack, the lingering impact of COVID, conflict in the Middle East and the rise of so-called “ultra-low-cost retailers.”

An Ontario Superior Court judge has given the green light in recent weeks to deals that will see Ricki’s and Cleo sold to Canadian retail billionaire Doug Putman — owner of Toys R’ Us and Northern Reflections — and Bootlegger likely going to Warehouse One clothing.

But Canada’s retail clothing and accessories industry — which generated $3.6 billion in 2024 — still faces the same headwinds that left Comark $61 million in debt.

“The competitive retail and, in particular, retail apparel industry in Canada has undergone significant changes in the past decade,” writes Kassam, who is based in Vancouver.

“As a result of these changes, many Canadian retailers, including apparel retailers … have filed for protection … including Reitmans, Aldo, Aeropostale, American Apparel, Mexx, Forever XXI, Target Canada, Express, Sears Canada, Nordstrom Canada and Ted Baker Canada,”

Deep Canadian roots

The court documents spell out the history of all three stores, which have been part of the Canadian retail landscape for decades.

Ricki’s was founded in 1939 in Brandon and sells mostly tops, sweaters, pants, dresses, blouses, blazers, outerwear, denim and accessories. Cleo’s predecessor, Irene Hill, was founded in 1958.

“The Cleo brand provides work wear and casual clothing for women over the age of 48,” Kassam writes. “Cleo is the largest retailer of women’s petite…