Parent company of New York & Company warns of bankruptcy filing
RTW Retailwinds could be the latest retailer to declare bankruptcy amid the COVID-19 pandemic.
In a filing with the Securities and Exchange Commission, the parent company of New York & Company said it is finalizing a 10K filing with its auditor that will reflect “a substantial doubt” about its ability to continue as a going concern and the possibility it may file for Chapter 11 bankruptcy protection.
The retailer said that COVID-19 will have a material adverse impact on its finances. It also said that its inventory has piled up in stores and distribution centers, aging over the past two months, and is now “aged and significantly impaired.”
“The company has already experienced substantial and recurring losses from operations, and such losses have caused a retained deficit of $164.6 million as of February 1, 2020,” RTW Retailwinds stated in the filing. “As such, the company has been considering available options, including restructuring its obligations or seeking protection under the bankruptcy laws…The company believes that seeking protection under the bankruptcy laws is probable.”
RTW Retailwinds said it has not paid rent to its landlords for the months of April 2020 and May 2020, and has also has not made recent payments to many of its vendors. Consequently, it has received default notices from many landlords and vendors.
“The company may be in default of all of its store lease agreements as of the date of this filing, but has not yet received default notification from all landlords,” stated RTW Retailwinds, which operates more than 385 stores.
The retailer also said it is also likely in default under a loan agreement with Wells Fargo.
Since the COVID-19 pandemic started, Neiman Marcus Group, Tuesday Morning, J.C. Penney, Stages Stores and J. Crew Group have filed for Chapter 11.