New York & Company parent to ‘rationalize’ real estate; gets NYSE listing notice
RTW Retailwinds, whose portfolio includes the New York & Company and Fashion to Figure businesses, is taking action after a disappointing holiday season.
Based upon holiday results, the company expects comparable store sales for the fourth quarter to be down 8% to 10%. The operating loss for the fourth quarter is now expected to reflect a loss in the low to mid $20 million range prior to the impact of non-cash impairment charges related to underperforming store assets which will be determined based upon the final closeout of the fiscal year.
“Growth in our core digital brand, celebrity brands and another double-digit comp increase for our Fashion to Figure business driven by e-commerce were not enough to offset disappointing holiday sales resulting from significant declines in store traffic, which led to increased promotional activity,” said Gregory Scott, CEO, RTW Retainwinds, which 412 retail and outlet locations in 35 states.
In light of its performance and given the current environment, Scott said the company is taking decisive action and accelerating its strategic transformation agenda.
“We are addressing these challenges with a sense of urgency, which will include investing in our customer-first initiative, rationalizing our real estate portfolio, evaluating all aspects of our go-to-market strategy, and reconfiguring our business to support a profitable and more balanced direct to consumer operating model,” Scott said.
The retailer said it will provide further updates during its fourth quarter and fiscal year 2019 earnings release (in March) as it positions itself “to deliver long-term profitable and sustainable growth.”
“Our strong balance sheet with significant cash and no debt affords us the opportunity to support our transformation,” Scott said.
In a separate release, RTW said it received notice from the New York Stock Exchange that the average closing price of the company’s common stock over a consecutive 30 trading-day period had fallen below $1.00 per share, which is the minimum price required by the NYSE under Section 802.01C of the NYSE Listed Company Manual.
The retailer said it plans to notify the NYSE by January 23, 2020, that it intends to cure the deficiency and return to compliance with NYSE continued listing requirements.
“The company intends to consider available alternatives, including but not limited to, a reverse stock split, which would require the approval of a majority of the company’s stockholders no later than its next annual shareholders’ meeting,” RTW stated.