The parent of a 102-year-old apparel chain has become the latest merchandiser to seek bankruptcy protection as the fallout from the coronavirus pandemic continues to ravage the old-line brick-and-mortar retail industry.
RTW Retailwinds Inc., which operates 10 New York & Co. stores in South Carolina, expects to shutter "a significant portion, if not all" of its 378 shopping center locations across 32 states. It also said it "has launched a store closing and liquidation process" in conjunction with that plan.
RTW listed assets of $412 million and debts of about $396 million in a court filing this week.
In the near term, the New York-based chain will continue to reopen stores as it seeks to restructure its debt and search for a buyer under the bankruptcy process. It was seeking court approval to continue paying its 4,550 workers and providing benefits.
“The combined effects of a challenging retail environment coupled with the impact of the coronavirus ... pandemic have caused significant financial distress on our business, and we expect it to continue to do so in the future," said CEO Sheamus Toal, who also is chief financial officer of RTW. "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."
Robert Shapiro, who was named chief restructuring officer for RTW, said the economic lockdown this spring caused a steep drop in Easter and Mother’s Day sales. Also, a 15 percent tariff increase the U.S. imposed on most apparel and accessory shipments from China last fall had an "adverse impact" on the bottom line, he said.
In addition to New York & Co., RTW owns two other specialty apparel merchandisers: Fashion to Figure and Happy x Nature, a collaboration with actress Kate Hudson.
The specialty retailer was incorporated in 1918 as Lerner Shops by two brothers who ran a Big Apple blouse manufacturer.
Locally, New York & Co. has stores at Tanger Outlets, Northwoods Mall and Citadel Mall. The seven other brick-and-mortar locations around the state are in Bluffton, Columbia, Gaffney, Greenville, Myrtle Beach and Sumter.
The company joins a growing list of U.S. retailers turning to the nation's bankruptcy system to darken stores and reduce debt since the pandemic struck in mid-March. Others include Brooks Brothers, GNC, J.C. Penney, J.Crew & Co., Neiman Marcus, Old Time Pottery, Stage Stores and Tuesday Morning.
"There's not really much that retailers can do," said Forrester Research retail analyst Sucharita Kodali told The Washington Post this week.