Dylex Limited, once one of Canada's largest apparel retailers, entered bankruptcy protection in 1995 after years of debt-fueled expansion and deteriorating relations between co-founders Jimmy Kay and Wilfred Posluns. By the end of the decade, its BiWay discount chain still generated more than half of Dylex's revenue, but the parent company was being dismantled through asset sales. In 2000, several divisions were sold to American Eagle Outfitters, while BiWay was acquired by Hardof Wolf Group, described in the source as a shell company for the United States-based McCrory Stores, a dollar-store operation owned by businessman Meshulam Riklis. The proposed rescue plan was to convert BiWay locations into Dollar Zone stores, but the conversion never materialized. In August 2001, almost every BiWay store closed permanently. The shutdown became especially damaging because Hardof Wolf allegedly left employees without money owed to them, turning a retail failure into a wage-and-bankruptcy scandal. Ontario courts eventually compelled the company to repay some of the workers, and the litigation reportedly established a precedent in Ontario bankruptcy law. The source also states that Riklis was later reported to have drained money from Dylex for use in other Riklis-controlled companies, though the precise legal findings and financial mechanics require further documentary verification. The episode exposed how leveraged retail expansion and opaque corporate ownership could leave workers bearing the final cost of a collapsing fashion empire.
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AI concept artworkArchive Record · 2000s
BiWay's 2001 Collapse: The Discount Chain That Closed While Employees Were Left Unpaid
BiWay, Dylex Limited, Hardof Wolf Group, and Meshulam Riklis / 2000s
Dylex Limited, once one of Canada's largest apparel retailers, entered bankruptcy protection in 1995 after years of debt-fueled expansion and deteriorating relations between co-founders Jimmy Kay and Wilfred Posluns. By the end of the decade, its BiWay discount chain still generated more than half of Dylex's revenue, but the parent company was being dismantled through asset sales. In 2000, several divisions were sold to American Eagle Outfitters, while BiWay was acquired by Hardof Wolf Group, described in the source as a shell company for the United States-based McCrory Stores, a dollar-store operation owned by businessman Meshulam Riklis. The proposed rescue plan was to convert BiWay locations into Dollar Zone stores, but the conversion never materialized. In August 2001, almost every BiWay store closed permanently. The shutdown became especially damaging because Hardof Wolf allegedly left employees without money owed to them, turning a retail failure into a wage-and-bankruptcy scandal. Ontario courts eventually compelled the company to repay some of the workers, and the litigation reportedly established a precedent in Ontario bankruptcy law. The source also states that Riklis was later reported to have drained money from Dylex for use in other Riklis-controlled companies, though the precise legal findings and financial mechanics require further documentary verification. The episode exposed how leveraged retail expansion and opaque corporate ownership could leave workers bearing the final cost of a collapsing fashion empire.
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