RTW Retailwinds files for bankruptcy, plans widespread store closures
RTW Retailwinds, Inc., the NYC-based owner of New York & Company and Fashion to Figure, announced on Monday that it has filed for Chapter 11 bankruptcy and is planning to shutter a large number – if not all – of its brick-and-mortar stores.
Filed in the United States Bankruptcy Court for the District of New Jersey, the apparel retailer’s bankruptcy proceedings include motions which, if approved, will allow the company to maintain its operations, continuing to pay employees, suppliers and vendors without interruption.
Although RTW Retailwinds has already launched a store closing and liquidation process in relation to the planned shuttering of its brick-and-mortar locations, the company intends to continue operating its stores as usual in the near term, and will push forward with the reopening of the locations that it temporarily closed due to the Covid-19 pandemic.
The retailer further clarified that it is “evaluating any and all strategic alternatives” and is considering a possible sale of its e-commerce platform and related intellectual property.
“The combined effects of a challenging retail environment coupled with the impact of the coronavirus 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 release. “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.”
Like many retailers, RTW Retailwinds’ operations have been deeply impacted by the coronavirus crisis, but the company had already reported a disappointing 2019 before the rapid spread of Covid-19 began in the United States in March.
For the fiscal year ended February 1, 2020, the company’s net sales declined 7.4% to $827.0 million, while its annual net loss totaled $61.6 million, or $0.96 per diluted share, compared to net income of $4.2 million, or $0.06 per diluted share, in the previous year.
When reporting its results, the retailer these attributed these decreases to declines in store traffic and ongoing weakness in its casual lifestyle segment.
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