Parent company of New York & Company files for bankruptcy
RTW Retailwinds has filed for Chapter 11 bankruptcy protection with plans to close many, if not all, of its 378 stores.
The filing was not unexpected. In a filing with the Securities and Exchange Commission in June, RTW called bankruptcy “probable,” citing the adverse impact of COVID-19 on its operations. The retailer noted that, prior to the pandemic, it planned to accelerate its strategy to reposition itself as a digitally dominant retailer, which included the closing of 150 of stores during the next 18 months.
In its Chapter 11 filing, RTW said it expects to close a significant portion, if not all, of its brick-and-mortar stores and has launched a store closing and liquidation process. The retailer is evaluating any and all strategic alternatives, including the potential sale of its eCommerce business and related intellectual property.
RTW said it will continue to operate its business in in the near term, including continuing to re-open its previously temporarily closed stores, “when and where appropriate,” along with operating Its e-commerce business.
“The combined effects of a challenging retail environment coupled with the impact of the Coronavirus (COVID-19) pandemic have caused significant financial distress on our business, and we expect it to continue to do so in the future,” said Sheamus Toal, CEO and CFO.
“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.”
With its filing, RTW joins a growing list of retailers that have filed for bankruptcy protection amid the pandemic, including Neiman Marcus, J.C. Penney, J.Crew and, most recently, Brooks Brothers and Lucky Brand.
The RTW portfolio includes branded merchandise from New York & Company, Fashion to Figure, and Happy x Nature. The company’s restructuring counsel is Cole Schotz P.C., its restructuring advisor is BRG, LLC, and its investment banker is B. Riley FBR, Inc.