The parent company of New York & Co., the wear-to-work retailer for women, warned it may file for Chapter 11 bankruptcy protection as the nationwide chain has been crippled by the COVID-19 crisis, CNBC reported.
RTW Retailwinds Inc. said in its filing with the Securities and Exchange Commission (SEC) that there’s “substantial doubt” about its ability to do business, bankruptcy is “probable” without seeking bankruptcy protection, and “it does not have ability to raise additional capital at this time.” The company also said it is likely to default on a loan agreement with Wells Fargo.
The company operates more than 385 retail and outlet locations in 33 states, according to its website. New York & Co. offers special collections in collaboration with actresses Gabrielle Union, Eva Mendes and Kate Hudson, according to The Wall Street Journal.
RTW said it is working with its independent auditor to complete its SEC filing to explain how COVID-19 has hurt its business.
If RTW is granted bankruptcy, it would be the latest casualty among retailers that have been driven out of business from the coronavirus pandemic.
Earlier this month, J.Crew Group Inc. sought bankruptcy protection. Department store chains Neiman Marcus Group, JCPenney and Stage Stores have also said they are considering bankruptcy filings amid the crisis.
A PYMNTS survey revealed just a third of online shoppers will return to brick-and-mortar stores to shop when they reopen. Of those shoppers who preferred in-store shopping to online, only 40 percent said they will resume their normal shopping activities when those stores reopen.
In a recent PYMNTS interview on “Powering the Digital Shift 2020, Nick Kaplan, president and co-founder of Fashion To Figure, a New York-based plus-size women’s retailer, quoted his brother who said “adapt or die.”
“A vaccine is a very long ways away,” he said. “We’re evolving, and that stagnation equals death. We are going to change, and I think it’s always the case that consumers are going to vote. I think that we, as an industry, have recognized that with some of the carnage we are seeing that we have to evolve quickly and be nimble, allow for ourselves to test and fail quickly and give him or her [customers] what they’re looking for, and if they’re voting no, then change and be dynamic.”