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12/15/2020

Christopher & Banks issues ‘going concern’ warning; weighing options

Marianne Wilson
Editor-in-Chief
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Christopher & Banks is reviewing its options, including bankruptcy or a sale of the company, as its sales continue to fall amid the pandemic.

The women’s apparel retailer said that it has hired outside advisors, including B. Riley Securities Inc., to assist “with management's evaluation and pursuit of available strategic alternatives,” that include, but aren’t limited to, further lease concessions and deferrals, a sale of the company or its assets, bankruptcy or an out-of-court debt restructuring. 

Christopher & Banks, which operates about 450 stores, posted a 22.6% sales decline in its third quarter along with a net loss of $10.8 million. Online sales rose 32% compared to a nearly 71% jump in the second quarter. 

"We have not seen the level of sales recovery that we had anticipated," Keri Jones, CEO, stated in the company’s third-quarter earnings release. "We believe that COVID has had an outsized impact on our customer demographic as her shopping behavior is more pragmatic with limited demand for new outfits in the absence of social engagements. In addition, based on our own retail traffic trends we believe she remains hesitant to shop in stores.” As a result of our expectation that COVID will continue to negatively impact sales over the next several months, we made the decision to engage external advisors, including an investment banker, as we work to refinance our debt and explore other strategic alternatives.

Citing the impact of the pandemic, the retailer said that its revenues, results of operations and cash flows continue to be materially adversely, “which raises substantial doubt about the company's ability to continue as a going concern…”