BURST
Coast Appliances, a massive Canadian appliance wholesaler headquartered in Vancouver, has filed for creditor protection, citing the slowdown in residential construction as a contributing factor, court records show.
A B.C. Supreme Court judge recently granted the company, which boasts 17 showrooms and nine distribution centres across the country, an order under the Companies’ Creditors Arrangement Act that gives the company more time to find a buyer or to restructure, while allowing business operations to continue.
The order was granted two days after CEO Bill Walker and a number of the company’s directors tendered their resignations, leaving the business “rudderless,” according to an affidavit from John Gil, special accounts manager with the Bank of Montreal, which is seeking the liquidation of the company.
As a result, PricewaterhouseCoopers has been appointed to monitor the company’s operations for the time being.
According to court filings, the poor performance of the company in recent years is because a large portion of the business is driven by residential construction projects, “with higher volume contracts for new single-family and multi-unit residential buildings.”
“As a result of the downturn in the new home construction market over the last several years, the Business has, in turn, declined,” the documents read.
Over the last six months, the company has “generated negative earnings” and could not service the debt or cover operating costs associated with its retail footprint, which spans five provinces, the documents state.
As well, the ongoing conflict in the Middle East has also had an impact on transportation and logistics costs, adding to the company’s struggles.
As of 2024, the company had total liabilities, including long-term debt, of $119 million, court documents state.
The company is also tied up in 21 lease agreements with 16 different landlords, encompassing their Vancouver office, as well as all showrooms and distribution centres, though court documents say the company is up to date with their lease payments.
Coast currently employs 300 people across its various locations in B.C., Alberta, Saskatchewan, Manitoba and Ontario. About 79 of those employees work out of the Vancouver head office.
More to come.