Apparel retailer RTW Retailwinds has filed for Chapter 11 protection in the U.S. Bankruptcy Court of New Jersey. The retailer expects to close a significant portion — if not all — of its 378 brick-and-mortar stores as part of its financial reorganization, but will continue to operate as usual in the near term. More than 90% of its stores have reopened following closures mandated by COVID-19.
The bankruptcy filing has been expected for several weeks; RTW Retailwinds revealed in June that it might have to close all its stores if it went into Chapter 11. The retailer, with brands that include New York & Company, Fashion to Figure and Happy x Nature, is now evaluating strategic alternatives that could include the sale of its e-Commerce business and intellectual property. Pier 1 Imports, which filed for bankruptcy in February 2020, received a $20 billion bid for its online assets and IP earlier this month, and bankrupt retailer Lucky Brand is in negotiations for a similar type of deal.
“The combined effects of a challenging retail environment coupled with the impact of the COVID-19 pandemic have caused significant financial distress on our business, and we expect it to continue to do so in the future,” said RTW Retailwinds CEO and CFO Sheamus Toal in a statement. “As a result, we believe that a restructuring of our liabilities and a potential sale of the business or portions of the business is the best path forward to unlock value.”
RTW Retailwinds expects to be able to repay in full the approximately $12.7 million in outstanding loans by Aug. 31, 2020. For fiscal 2019, which ended Feb. 1, 2020, the company generated net sales of $827 million, an 8% decline from the $893.2 million generated the previous year, and comparable store sales dipped 5.4%.