Coronavirus leads New York & Company into bankruptcy, closing most stores
Brooks Brothers, J.C. Penney, J. Crew and Neiman Marcus have also filed for bankruptcy
Meridian Retail Leasing president James Famularo says the outlook for coronavirus-hit retailers is still bleak, but this won’t be the end of brick-and-mortar stores.
Women’s fashion retailer New York & Company will “close a significant portion if not all” of its stores after parent company RTW Retailwinds filed for Chapter 11 bankruptcy Monday.
RTW, which filed for bankruptcy protection in the U.S. Bankruptcy Court for the District of New Jersey, said in a statement that it made the decision due to ongoing financial strain brought on by the coronavirus pandemic and that it has launched a store-closing and liquidation process.
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New York & Company is offering 40 percent off everything online, its website stated.
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“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,” Sheamus Toal, RTW CEO and chief financial officer, said in the statement.
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Strategic Resource Group Managing Director Burt Flickinger argues companies with a good online business and food-related retail can thrive during the coronavirus outbreak.
RTW, which also owns branded merchandise from Fashion to Figure and Happy x Nature, had been grappling with declining foot traffic long before the COVID-19 crisis started, however.
Shares are down 95 percent on the year, including a 45 percent dive in the last three months.
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New York & Company is the latest on a growing list of retailers to face bankruptcy in the wake of the COVID-19 crisis. Brooks Brothers, J.C. Penney, J. Crew and Neiman Marcus are among the other top outlets that have filed for bankruptcy since the start of the outbreak.
The pandemic has taken an especially hard toll on apparel stores with a heavy presence in shopping malls, like New York & Company, as many have not reopened or shoppers stay home.
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RTW said in the statement that it “is evaluating any and all strategic alternatives, including the potential sale of its eCommerce business and related intellectual property.”