Jacob had begun closing locations in 2008, shuttering 52 stores with 355 staff in two years. In November 2010, the company was owing $29 million to suppliers and employees, and $8.8 million to the National Bank of Canada. It received court protection from creditors, through the Quebec Superior Court and the Companies' Creditors Arrangement Act, planning to reformat its operations. While the company attributed its woes were pinned on entries by international retailers into the Canadian market, including H&M and Zara, it was also negatively impacted by "surgical shopping", a gap in the retail market increased during the recession, pushing purchasers to high end or value products, as opposed to middle market. Gap and Sears Canada were cited as casualties.