In late 2021, Canadian clothing chains Bootlegger, Cleo, and Ricki's faced a devastating ransomware attack that paralyzed their inventory systems during the critical holiday shopping season. The attack commenced on November 23 and forced 221 stores to scramble and heavily discount merchandise to cope with supply issues, ultimately resulting in an estimated revenue loss of $8.2 million. Comark Holdings, the parent company, also faced additional challenges from COVID-19's lingering effects and increasing competition from ultra-low-cost retailers, leading to its insolvency and $61 million in debt. Recent court approvals have allowed for the sale of affected brands to prominent retail investors.
The competitive retail and, in particular, retail apparel industry in Canada has undergone significant changes in the past decade, creating challenging headwinds for retailers.
The ransomware attack forced affected stores to mount heavy promotions to offload substantial amounts of seasonal clothing caught up in the delay.
Comark Holdings lost approximately $8.2 million in revenue due to the cyber incident, exacerbating its already challenging financial situation.
After the ransomware attack and further complications, the company was forced into creditor protection with over $61 million in debt.
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