Cache files for Chapter 11

Cache on Wednesday said it had filed for Chapter 11 bankruptcy protection after running out of capital and time to complete its turnaround.

The women’s apparel retailer will continue to operate its business, but intends to continue to reduce its store count and sell and renegotiate some of its leases. Cache chairman and CEO Jay Margolis said the company filed Chapter 11 with the goal of “securing Cache’s future.”

"Our team has been working tirelessly to implement a turnaround,” Margolis stated. “In a short period of time, we upgraded key stores and closed unprofitable ones; launched a more vibrant and robust e-commerce site where conversion has doubled; and have seen same store comp sales from our 2014 holiday season increase 9.5%, with this positive momentum continuing through January. However, the depressed brick and mortar retail market, the continued growth of online shopping, and rapidly changing consumer tastes and habits thwarted our efforts. Ultimately, we have not had the time or capital to realize all of the benefits of our hard work."

The retailer has secured up to $22 million in financing from Salus Capital Partners to keep operating during the Chapter 11 proceeding, with the financing subject to court approval. Cache also will seek a so-called stalking horse buyer for its assets. "We believe that this action provides (Cache) the greatest opportunity to secure a strategic partner while maximizing recovery to our stakeholders," added Margolis.

In December, Cache said it had decided to explore strategic alternatives that include a possible merger or sale.