RTW Retailwinds, Inc., an omnichannel specialty apparel retail platform for New York & Company and several other brands, has filed for Chapter 11 bankruptcy protection. The company represents yet another retail victim of the coronavirus (COVID-19 pandemic that has thrown the economy into a recession.
Besides New York & Company, the company’s brands include Fashion to Figure and Kate Hudson’s fashion line Happy x Nature.
In announcing its bankruptcy filing, the company said it will likely “close most, if not all” of its 400 retail stores in 32 states and has already begun that process. It said it has sought permission from the bankruptcy court to maintain operations in the ordinary course of business.
Like some other retailers that have been forced into bankruptcy over the last four months, RTW Retailwinds was already struggling before the virus forced a shutdown of the U.S. economy in March. Last year, the company’s revenue declined by more than 7 percent. It went from earning a profit of $4.2 million in 2018 to losing $61.6 million in 2019.
Other pandemic victims
It joins J. Crew, Neiman Marcus, Brooks Brothers, and JCPenney in the bankruptcy club. Not coincidentally, all of those retailers specialize in apparel, which had been in a slow decline for several years before the pandemic caused a huge drop in clothing sales.
“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 company CEO Sheamus Toal. “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.”
New York & Company may have been especially hard-hit by the coronavirus because it specializes in women’s work apparel. With most of the nation’s workforce working from home, clothing sales have suffered.
New York & Company was founded in 1918 as Lerner Shops by Samuel A. Lerner and Harold M. Lane in New York City.