The parent company of women’s clothing retailer New York & Co. filed for Chapter 11 bankruptcy protection Monday and plans to close “a significant portion,” if not all, of the stores.
RTW Retailwinds Inc., whose 378 stores include 11 on Long Island, is blaming the COVID-19 pandemic for part of its woes.
“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,” Sheamus Toal, RTW chief executive officer, said in a statement Monday.
“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.”
Headquartered in Manhattan, RTW Retailwinds operates 378 brick-and-mortar stores — 260 New York & Co. locations, 114 New York & Co. off-price outlets and four Fashion to Figure plus-size women’s apparel stores.
New York & Co. and Fashion to Figure also sell merchandise through their websites, and operate rental subscription businesses online.
RTW and its subsidiaries have liabilities of about $396 million and assets of about $412 million, according to a document RTW filed in United States Bankruptcy Court for the District of New Jersey on Monday.
The company has been struggling for years, but had touted its increase in online sales and boosts from its apparel collections from celebrities, such as actresses Gabrielle Union, Eva Mendes and Kate Hudson.
In March, after posting disappointing fourth-quarter and fiscal 2019 earnings results, RTW said it planned to permanently close up to 150 stores over the next 18 months and focus more on online sales.
For the 12-month period that ended Feb. 1, RTW’s sales at stores open at least one year fell 5.4% compared to the same period a year earlier. The company had an operating loss of $61.9 million for the fiscal year.
Trading of RTW’s common stock on the New York Stock Exchange was suspended on July 6.
There are 10 New York & Co. stores on Long Island, including locations at Broadway Commons mall in Hicksville, Westfield Sunrise Mall in Massapequa, Smith Haven Mall in Lake Grove and Green Acres Mall in Valley Stream. There is also a Fashion to Figure store in Green Acres Mall.
Most New York & Co. stores are in shopping malls, which poses its own set of challenges since they were struggling even before the pandemic as consumers shifted more of their spending online and to discount stores outside of malls.
“Department stores and apparel chains, which are among the most vulnerable sectors, represent 14 of the top 20 occupants of U.S. mall space,” according to Coresight Research, a Manhattan-based retail analysis provider.
There will be a record 20,000 to 25,000 store closures in the United States in 2020, topping last year’s record of about 9,820 closings, as many retailers that were temporarily closed to help stop the spread of the virus this year will not reopen, according to Coresight.
At least 55% of the permanent closings this year will be at malls, Coresight said.
•The Lerner brothers, blouse manufacturers, opened the first Lerner Shops store in New York City in 1918.
•The Limited Brands purchased the company in 1985, and the name was changed to Lerner New York seven years later.
•The name was changed again, to New York & Co., in 1995.
•In 2002, Bear Stearns Merchant Banking, now known as Irving Place Capital, bought the clothing chain, which became independent and known as New York & Co. Inc.
•New York & Co. went public in 2004.
•In 2018, as part of a rebranding plan, New York & Co. Inc. changed its name to RTW Retailwinds Inc., “reflecting the ability to grow the portfolio of lifestyle brands into new categories and markets.”
Source: RTW Retailwinds Inc.