Bloomberg News: New York – The parent of New York & Co. is preparing for a bankruptcy filing that would include plans to shut all of the discount apparel chain’s stores, according to people with knowledge of the matter.
RTW Retailwinds Inc., which also owns Fashion to Figure and Happy x Nature, warned earlier this month that a bankruptcy filing was probable, citing a loan default, and said it could close a significant portion, if not all, of its 387 stores.
A representative for New York-based RTW declined to comment. The people with knowledge of the matter asked not to be identified because the plans haven’t been made public.
The nationwide shutdown due to the Covid-19 outbreak, following years of declining mall traffic, has pushed some of the most familiar retail names into bankruptcy, including J.C. Penney Co. and Neiman Marcus Group Inc.
Founded more than a century ago as Lerner Shops, the company changed its name to New York & Co. in the late 1990s and became a mall mainstay, teaming up with celebrities like Eva Mendes and Kate Hudson.
The company’s former president and chief marketing and customer officer, Traci Inglis, said in March that it was time to transition to a “digitally-dominant” brand.
But the pandemic forced all its stores to temporarily close the same month, according to the company’s annual report, making it impossible to turn around what RTW called substantial and recurring losses from operations. Some stores began to re-open in the first week of June.
To deal with the cash crunch, RTW didn’t pay vendors and withheld April and May rent to its landlords, leading to a flurry of default notices, the company said. What’s more, the store closings cut into inventory values and other assets. Bankers at Wells Fargo & Co. gave the company until June 30 to make good on its defaulted loan.
The stock, which once sold for more than $23 in 2005, now trades at less than 30 cents per share.
- Top Feature Photo: A pedestrian wearing a protective mask walks near a temporarily closed New York & Co. store in Silver Spring, Maryland on June 5, Photographer – Andrew Harrer/Bloomberg