We Took a Massive Risk Last Year and It Paid Off: How We Restructured Henry’s and Revived a Great Canadian Legacy

Like other retailers everywhere, Henry’s—Canada’s Greatest Camera Store—closed its doors during the first COVID-19 lockdown in March 2020, thinking it would be a short-lived challenge. It wouldn’t be easy, but we could handle a two-week hiatus if it meant protecting the health of our team and of Canadians.

Of course, it quickly became apparent that this was going to last a lot longer than two weeks. And with our stores closed for an extended period of time, sales were down. Way down.

By mid-April, I knew we had to do something drastic. I discussed our options with my CFO, Rachel Larouche, and then we met with our lawyer. We talked for hours. We called in the chair of our board, my father, Andrew Stein. We kept talking.

The biggest question we had to answer was, did we want to stay in business? Some might have seen this as an opportunity to just “get out.”

What we knew in no uncertain terms was that we had two very critical things: a strong national brand and a trusting, loyal customer base. It’s easy to build a store and buy inventory but building a brand and a devoted following is extremely hard. The Henry’s brand has been a Canadian staple for decades. It was worth saving—for our people, for our family, for me, and for Canada. We did want to keep going, no question.

So, with counsel from my closest advisors, I made a very tough call: we would restructure our business under the Business Insolvency Act.

It was the scariest decision I’ve ever made in my entire career, and as the CEO, I had to own it.

A Family Legacy to Protect

My family has run Henry’s since its founding in 1909. But we’re not a massive empire that has simply handed down the business from one generation to the next. Each generation has had to work hard to buy the business from the previous generation. It’s a legacy I’m extremely proud to be a part of.

The idea that Henry’s could possibly go under on my watch, even if it was due to forces beyond my control, was terrifying. I was absolutely sick over it.?

But it did feel good to be taking control of the situation, doing something proactive rather than waiting and worrying. So, on May 1, 2020, we filed our “notice of intention to make a proposal” (NOI)—declaring our intention to restructure our balance sheet in order to weather the temporary impacts of COVID on retail—effectively buying ourselves time and space to figure out a way forward. We knew we were in for a long, risky, bumpy ride, but it felt good to do something.

We also announced plans to permanently close a handful of our stores, which was awful, but given the choice between that and closing all of them, it was clearly the less disruptive option.

While these weren’t easy or pleasant decisions, everyone in the family was 100 percent on board. They knew that it would be hard, but surmountable, with strong leadership and smart, focused decisions.

A Business for Sale

Restructuring the business meant essentially putting it up for sale. The plan was for members of the family, including myself, to invest their own money to try to buy it back, but there was no guarantee we would get it. Our filing included all the details of our debt and other financials, something a private business doesn’t normally share with the public. We really put everything out there for all to see, which was uncomfortable to say the least.

Even more uncomfortable was the knowledge that someone else could swoop in and buy it out from under us. It would be one thing to shutter the business, but the prospect of seeing it taken over by different owners, or broken up and sold for parts, was a very emotional, frightening proposition.

We knew, however, that we were in the best position to honour the company’s history. We truly understood the value of this business. We had hundreds of employees who depended on us for their livelihoods, many of whom had been with us for more than twenty years—people we knew and cared deeply about.

That’s why we were so committed to personally invest in it, to recommit in the future of Henry’s in Canada. We ran a process that saw the Stein family make a significant equity commitment to the business. It really says something when the CEO is willing to put her own personal money behind a company.

Leaning on Others for Support

I was lucky to have a very strong network to call on for support throughout this challenging time. My YPO community for example, gave me a safe space where I could speak openly with other CEOs who had faced similar challenges or who knew others who had who would be willing to help me. It was very helpful to be able to reach out and ask for advice. I’ve always said I never want to be the smartest person in a room; my career-long strategy of surrounding myself by smart people really paid off during this crisis!

Finally, at the end of July, we were able to announce the Court’s approval of our proposal to acquire the company’s assets as Henry’s Enterprises Inc. We would keep the company in the family, keep the management team in place, keep as many employees as we could—and stay in business.

To accomplish this in just three months during the pandemic when the world was in complete upheaval, when every business was disrupted and when the courts had slowed to a halt, was pretty incredible. We even kept the same bank, which is unheard of in the insolvency world; that really speaks to the relationships we have built over the years. We received incredible support from our suppliers and bankers, who together signed on to a vision of a strong business emerging from COVID—demonstrating their confidence in our ability to execute on our transformational strategy, which was already in the works.

A Long Exciting Road Ahead

Our acquisition of the company was only the beginning, of course. The business came out of the restructuring process with a strong balance sheet, but we had a long road ahead to get Henry’s on track to emerge from the pandemic in a position to thrive. The challenges of CO

COVID-19 were a catalyst to reimagining the role of eCommerce in our business. We pivoted quickly to accelerate our long-term strategy to allow Henry’s to keep pace with online retail giants like Best Buy and Amazon and continue to offer the unique experience that Henry’s has always been known for.

We made a lot of changes, many of which we had planned for the future but that became much more time-critical due to the pandemic. They included:

• Streamlining our operations
• Strengthening our retail network
• Creating an empowered team that’s more nimble and aligned across the business
• Improving communication between departments
• Improving the quality of our services and the customer experience
• Identifying new ways to connect with customers and encourage their creativity and passion
• ?Eliminating business areas that no longer made sense for us
• ?Investing in innovation and new business concepts

These are Important Discussions

I think it’s important that we talk about how nerve-wracking a situation like this can be—business is often discussed in cold, impersonal terms, but the truth is that businesses are run by people. There’s a lot on the line when companies struggle. This past year has been really hard on so many businesses, and I truly empathize.

It’s been a long, bumpy road, one that was very scary and could have gone very badly. But it’s turned out better that I’d imagined.

I am incredibly proud that we were able to keep 22 stores open and retain jobs for over three hundred people. Our eCommerce arm is thriving, and our diversification into broader areas of content creation such as podcasting is attracting an even broader base of loyal customers. The work-from-home revolution also presents huge opportunities for us to lead the way in digital meeting technology. We’re seeing more engagement with the Henry’s brand than ever before.

Our family legacy lives on. I think and truly hope my great-grandfather would be proud.