New York & Co. parent company files for bankruptcy and closes hundreds of stores
The retail bloodbath of 2020 continued on Monday as RTW Retailwinds, the parent company of New York & Co., said it had filed for Chapter 11 bankruptcy protection and may close all of its stores.
RTW joins a growing roster of already struggling retail chains pushed over the edge by prolonged COVID-19-related store closures this spring; other casualties include J.C. Penney, Neiman Marcus, GNC, Lucky Brand, and last week, Brooks Brothers.
“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,” RTW CEO and finance chief Sheamus Toal said in a statement. The company operates a total of 387 stores, under the New York & Co., Fashion to Figure, and Happy x Nature names. RTW will begin liquidation sales shortly.
At its peak in the 1990s, New York & Co. was a fixture in malls and had partnerships with celebrities like Eva Mendes and Kate Hudson. But more recently it has fallen out of favor with shoppers and struggled to keep up in the e-commerce wars. In March, the company said it was time to become a “digitally dominant” brand, a realization that came as countless rivals, from established players like Gap to newer ones like Everlane, already had big presences online.
The company said it is considering selling its e-commerce operations and related intellectual property in bankruptcy proceedings.
RTW’s bankruptcy was expected after it failed to pay vendors and withheld April and May rent to its landlords, earning a slew of default notices. It also defaulted on a June 30 loan. The company had said in early June there was “a substantial doubt” about its ability to continue operating its business as a going concern, calling a bankruptcy filing “probable.”
Like many retailers now seeking bankruptcy protection, RTW’s troubles started well before the pandemic. Having entered 2020 with challenged finances and little connection with its customer base, it was in no position to withstand the hit to liquidity from the massive sales declines it experienced when stores shuttered this spring.