New York & Co. Parent Files Bankruptcy and May Shut Stores
(Bloomberg) -- RTW Retailwinds Inc., the parent of New York & Co., filed for bankruptcy, and the century-old women’s apparel chain may close all of its stores, affecting almost 5,000 full- and part-time jobs.
RTW “expects to close a significant portion, if not all, of its brick-and-mortar stores” and has begun shutting and liquidating some of them, the company said in a statement Monday. It’s also considering a sale of its e-commerce business and intellectual property. But “a sale of any traditional brick and-mortar business is not viable or achievable under the current circumstances,” the company said in court papers.
“The Covid-19 pandemic was the proverbial nail in the coffin for the debtors following years of adverse market trends, including the shifting of sales from traditional brick-and-mortar retailers to online sellers, increased competition from big-box retailers, and changing consumer preferences,” the company said in its filing.
The Chapter 11 filing lets RTW, which also owns Fashion To Figure and Happy x Nature, keep operating while it works out a plan to repay creditors. The annual report showed that it employed 4,971 people as of Feb. 1, but RTW said in its court papers that 190 corporate office associates and 13 district managers have since been fired, along with about 12% of previously furloughed employees, leaving 4,556 people when it sought court protection.
Founded more than a century ago as Lerner Shops, the company changed its name to New York & Co. in the late 1990s and became a mall mainstay, teaming up with celebrities like Eva Mendes and Kate Hudson. All told, it has 378 locations in 32 states.
It’s the latest retailer felled by the coronavirus outbreak, which has forced store closures nationwide and prompted sharp declines in spending on discretionary goods. J.C. Penney Co., Neiman Marcus Group Inc. and J. Crew Group Inc. each filed for bankruptcy in May.
The New York-based chain has struggled in recent years with falling foot traffic at shopping centers and changing consumer tastes. Last year, management made it a priority to seek out new customers, but demand was disappointing at its mall stores and even worse at outlet shops.
In December, executives said they would close up to 30 stores as they re-evaluated leases across the network. They also began looking into subleasing office space at the company’s four-story headquarters in Manhattan. Incoming Chief Executive Officer Traci Inglis said in March that it was time to transition to a “digitally-dominant” brand.
RTW shifted to survival mode when the pandemic lockdown began. It closed stores in March and took steps to preserve liquidity by furloughing all store employees and some corporate workers, cutting the company’s payroll by 80%. It stopped making some vendor payments and didn’t pay rent in April or May.
The case is RTW Retailwinds Inc., 20-18445, U.S. Bankruptcy Court for the District of New Jersey.
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