LXRandCo Considers Selling Assets to Avoid Bankruptcy

LXRandCo, a Canadian retailer specializing in pre-owned luxury handbags and accessories, is exploring the possibility of selling off all its assets to prevent bankruptcy. The company recently issued a warning about potential liquidity issues and has filed a notice of intention to make a proposal which includes considering the sale of most or all of its assets.

A notice of intention to make a proposal is an initial step in the restructuring process under the Canadian Bankruptcy and Insolvency Act, allowing financially troubled companies to restructure their operations.

Earlier this week, LXRandCo cautioned that it could face liquidity problems due to economic headwinds impacting consumer discretionary spending. These challenges have resulted in lower-than-expected revenue for the third quarter, potentially leading to breaches in certain banking covenants and subsequent liquidity issues in the fourth quarter.

The company has been in discussions with its bank lenders to explore alternative solutions to address its financial situation. However, it's important to note that there is no guarantee of any specific outcome.

Adding to LXRandCo's troubles, the company's auditor unexpectedly resigned without providing a reason.

In August, LXRandCo reported a significant decline in revenue for the first half of the year, with a 24% decrease amounting to 7.4 million Canadian dollars ($5.4 million).

To further complicate matters, all of the company's directors have resigned, and KPMG has been appointed as the proposal trustee.