Goodwill Industries of Toronto, Eastern, Central and Northern Ontario (TECNO) seeks BIA protection with the intention to restructure

Statement from Keiko Nakamura, CEO of Goodwill Industries of Toronto, Eastern, Central & Northern Ontario

February 8, 2016 – Toronto, Ontario – Goodwill Industries of Toronto, Eastern, Central and Northern Ontario (TECNO) filed an assignment under Canada’s Bankruptcy and Insolvency Act (the “BIA”).  The purpose of the filing is to preserve the assets of the corporation for the benefit of its principal creditors, who are collectively the former employees of the corporation.

The corporation is contemplating later making a proposal to its creditors which, if approved, would annul the bankruptcy and allow the corporation to reopen some stores, continuing to serve the surrounding communities and offering a source of gainful employment.

The leadership of the Canadian Airport Workers Union (CAWU), which represent the majority of the workers at Goodwill TECNO, has confirmed its support for this path forward.   Strategic alternatives under consideration focus on overcoming significant barriers to relieve the organization’s financial burden to allow for a possible restructure.

In accordance with the BIA filing, a trustee has been appointed in Goodwill TECNO’s proceedings and will assist the organization in its efforts. As required by the BIA, the trustee will be contacting all creditors within five business days.


About Goodwill Industries of Toronto, Eastern, Central and Northern Ontario (TECNO)

Goodwill Industries of Toronto, Eastern, Central and Northern Ontario is a non-profit, charitable organization. The organization provides work opportunities, skills development and employment for those who face barriers to employment.

Statement from Keiko Nakamura, CEO of Goodwill Industries of Toronto, Eastern, Central and Northern Ontario

I am pleased to announce that Goodwill staff will receive their pay due for hours worked up to and including January 16, 2016. Goodwill staff can expect to receive pay into their bank accounts by end of day today (January 22, 2016). The time will vary depending on the individual’s financial institution. Over the last few days, we were able to work with RBC and ADP to make this happen.

I regret the concern, anxiety and frustration the staff of Goodwill has experienced as a result Goodwill’s cash flow crisis resulting in the closing of all stores and operations.

In addition, records of employment have been processed and will be mailed out next week. This will allow staff to begin the process to apply for employment insurance and seek out other assistance.

My overriding priority since the closure of our operations has been to ensure the payment of our staff for work done. But the future of Goodwill is not assured. I am seeking the necessary support and alliances to create a constructive path forward for the organization and the many communities it serves. I believe that possibilities for transformation and renewal of the organization will be explored with individuals and groups who value the contribution Goodwill makes to the communities it serves – its employees, donors, those seeking employment in challenging circumstances and the many families who purchase from Goodwill stores.

As difficult as the current circumstances are, this crisis may present an opportunity for a transformation that allows Goodwill to successfully fulfill its mission in reinvented and empowering ways.

I offer my gratitude to the many individuals who have expressed their concern over this crisis, to those that are seeking ways to help and especially to those Goodwill staff members who have volunteered their time in helping to ensure that wages will be distributed.

In the meantime, if there are staff and clients of Goodwill facing challenges, please go to www.renewthegood.ca. A volunteer group of former staff is currently working to fundraise $100,000 for urgent transitional support. The website has the capacity to accept donations online. The group says funds will be disbursed in priority order for food, rent and medication.

The Ministry of Training, Colleges and Universities, and the Ministry of Community and Social Services have been very supportive in working with former staff to coordinate securing client records and facilitating referrals to services with other employment and developmental services providers.

Many people are still bringing goods to Goodwill locations. The organization respectfully asks the public to stop bringing items to our stores and donation centres at this time. Please consider donating your goods to a number of valuable registered, non-profit organizations such as the Salvation Army, Society of St. Vincent de Paul and Habitat for Humanity, which all have Goodwill’s goal of helping those facing barriers or who are in need.

I would like to thank the Canadian Diabetes Association, through its Clothesline program, which is helping through the current situation by collecting donated items and sharing in the revenue it generates.

Further updates will be provided as information becomes available.

Statement from Keiko Nakamura, CEO of Goodwill Industries of Toronto, Eastern, Central and Northern Ontario

To update the more than 430 people affected by the closures, despite our best efforts, employees will not be paid on Friday as part of the regular pay cycle. However, Goodwill will be in a position to update all employees about date of payroll deposits and the issuance of records of employments on Monday January 25, 2016.

The former members of the Board of Directors would like to reiterate our support for Goodwill operations, its mission and Keiko Nakamura’s leadership during this time.

On Friday evening at a meeting of the Board, the Board resolved to cease operations because Goodwill’s cash flow position and forecast had become unsustainable.

At the meeting the Board also passed a resolution instructing Ms. Nakamura to continue her role as CEO and her strategy, taking the necessary steps required to cease operations as quickly as possible.

There are significant business challenges, including shifts in the value of the salvage marketplace, declining retail sales and the need to restructure retail store costs. These are the business realities that led the board to resign.

The board has given Ms. Nakamura a mandate to continue discussions with the union to help address the financial realities facing the organization.

Goodwill is a unique social enterprise, where majority of funding and services are self-driven through consumer and donated goods. In its current state, Goodwill’s operations model was not sustainable. This was the imperative that led to our decision.

We would like to reinforce that this was a difficult decision. We support Ms. Nakamura’s continued leadership in finding and implementing long-term solutions needed. She is a capable and strong leader who is determined to see through this next chapter for the Goodwill. We stand behind her and the decision currently made in this situation.

-Michael Eubanks

The former members of the board of directors for Goodwill TECNO are all volunteer board positions. It was made up of community business leaders throughout Ontario. They volunteered their time and experience.

 

Statement from Keiko Nakamura, CEO of Goodwill Industries of Toronto, Eastern, Central and Northern Ontario

First of all, I’d like to thank those who have expressed support for Goodwill’s ongoing mission for the Toronto, Eastern, Central and Northern Ontario operations in the last 48 hours. I have been inundated with numerous messages with offers of help from many people, organizations and government.

It has been a very challenging time for Goodwill as it faces a cash flow crisis. As announced yesterday, Goodwill’s 16 stores, 10 donation centres and two offices were closed affecting more than 430 employees in the Toronto, Brampton, Mississauga, Newmarket, Barrie, Orillia and Brockville area. I recognize this all happened suddenly for those involved and unfortunately that is the situation we are currently facing.

To those employees and other members of the community who benefit from Goodwill’s services, please know that I am thinking about you and doing everything I can to bring clarity to this situation as soon as possible.

I know many of you have questions. I am examining all possible solutions. I humbly ask for your patience during this tremendously difficult time. This will take some time.

As a charity that relies on 85 per cent of its revenue on retail operations, we are faced with a business model that has low margins. With increasing competition in the retail space, we are not immune to factors impacting our cash flow.

From the time I arrived in 2011, we have implemented a strategy to turn around the financial operations of the organization to remain viable. We started a process of real estate consolidation and have been remodeling our business operations to reduce overhead costs as a means to increase store revenues. Through this we were able to gain momentum with definite signs of progress.

Each year this organization suffers from negative cash flow from December to March, requiring the remaining year to recoup the difference. During this time period from December to March, staffing reductions were implemented with employees working a reduced workweek.

Also during this time of year, Goodwill is impacted by a decrease in donations, which affects sales. Both these factors simultaneously impact our cash flow.

It is common for many Goodwill operations to experience the ebb and flow of reductions related to seasonality. We worked hard to make this a viable operation for the current locations impacted.

As we work towards solutions, we are fortunate that staff have come forward, including case managers, counselors and employee specialists to volunteer their time, assisting in the transition and connecting with other agencies and local partners. However, stores, donations centres and offices will remain closed until further notice.

Last night, I met with union leaders of the Canadian Airport Workers Union, who represent the employees impacted. In an open discussion, I reiterated to the union leaders that Goodwill is facing an imminent and fluid cash flow situation and is exploring a variety of options to continue its operations. We have continued that dialogue today. The union was encouraged that Goodwill will continue working with stakeholders and various levels of government to find a solution.

Goodwill has received an outpouring of calls from various stakeholders, including the mayor’s office, provincial government ministries, other community organizations and the public who want to help with the situation we are facing.

With limited resources, Goodwill is processing all incoming requests and putting together a plan of action. There are a number of components that need further certainty before I can provide further details. Let me reassure you that I am exploring a variety of options.

Goodwill TECNO is locally managed and run. This does not impact the Goodwill’s in other Ontario operations including London, Sarnia, St. Catharines and Hamilton.

January 18, 2016

Media Advisory

Keiko Nakamura, CEO of Goodwill Industries of Toronto, Eastern, Central and Northern Ontario to Make Statement at 3:00 PM Today

TORONTO, ONTARIO (Jan. 18, 2016) – Keiko Nakamura, CEO of Goodwill Industries of Toronto, Eastern, Central and Northern Ontario will make a statement today at Goodwill’s headquarters at 3:00 p.m. today at 350 Progress Ave, Scarborough, ON M1P 2Z4. The statement will be made in the warehouse facility.

Please note that all details are subject to change. All times are local.

Date: Monday, January 18, 2016

Time: 3:00 p.m.

Place: 350 Progress Ave, Scarborough

Further updates will be updated www.goodwill.on.ca.

This announcement does not affect any other Goodwill Industries in Canada or the U.S.

Media contact:
Tim Lai
Brown & Cohen Communications & Public Affairs
416-484-1132 ext. 4
tim@brown-cohen.com

Goodwill Industries of Toronto, Eastern, Central and Northern Ontario Closes Operations But Exploring Options to Continue Mission

Statement from Keiko Nakamura, CEO of Goodwill Industries of Toronto, Eastern, Central and Northern Ontario

For more than 80 years, Goodwill Industries of Toronto, Eastern, Central and Northern Ontario has had a mission to enable work opportunities and provide skills development for people facing barriers to employment, including persons with disabilities, youth and the chronically unemployed. Goodwill stores and programs have supported many individuals and communities in this region.

Due to a number of factors affecting the retail environment, Goodwill is facing a cash flow crisis. As a result, 16 stores, 10 donation centres and 2 offices in Toronto, Mississauga, Brampton, Newmarket, Barrie, Orillia and Brockville are closed effective today. This unfortunately affects more than 430 Goodwill employees as well as other stakeholders and communities. As you can understand, this is a tremendously difficult time.

Currently, this is a fluid situation and Goodwill is exploring a variety of options to continue its decades-long mission. Goodwill will be reaching out to the union, stakeholders and all levels of governments to bring clarity as soon as possible.

Further updates will be provided by noon on Monday, January 18, 2016 via www.goodwill.on.ca.

This announcement does not affect any other Goodwill Industries in Canada or the U.S.

Media contact:
Tim Lai
Brown & Cohen Communications & Public Affairs
416-484-1132 ext. 4
tim@brown-cohen.com