New York & Company Parent Files Chapter 11, Closing Stores
RTW Retailwinds, the parent company to New York & Company, filed for Chapter 11 bankruptcy protection and expects to close a significant portion, or even all, of its brick-and-mortar stores.
Although it’s launched a store closing and liquidation process, it will continue business operations in the near term and continue re-opening the stores it had temporarily shuttered in order to help slow the spread of the coronavirus. It’s also exploring the potential sale of its e-commerce business and related intellectual property.
RTW operates 378 retail and outlet locations in 32 states, and includes such brands as New York & Company, Fashion to Figure and Happy x Nature in its portfolio. Stores have an average 5,000-square-foot footprint.
It also operates a rental subscription businesses at Nyandcompanycloset.com and Fashiontofigurecloset.com, and its e-commerce channel represents about 34% of its business.
Upon approval from the court, Chapter 11 protection will enable the company to continue paying employee wages, benefits, suppliers and vendors.
“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, RTW Retailwinds 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.”
As expected, some retailers emerging from the widespread store closuresface insurmountable challenges in returning to profitability. Apparel retailers have been among those hardest hit, and RTW joins such other sellers as JCPenney and Lucky Brand in Chapter 11.
Store closings, however, were already on RTW’s timetable before the pandemic. It planned to close more than 30 stores in 2020 — but it had also intended to open a handful of New York & Company and Fashion to Figure locations.