RTW Retailwinds (RTW) - Get Report, parent of fashion retailer New York & Co., said it filed for protection from creditors under Chapter 11 of U.S. bankruptcy law and planned to close many or all of its brick-and-mortar stores.
The move comes about six weeks after the company warned it had "substantial doubt" about its ability to continue as a going concern.
RTW said it had begun liquidation sales, with about 92% of its brick-and-mortar stores reopened as coronavirus pandemic lockdown measures relaxed.
But during the pandemic most retail stores and malls closed and consumers sheltered.
"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," said Sheamus Toal, chief executive and chief financial officer, in a statement.
The New York company filed its chapter 11 petition in U.S. Bankruptcy Court for the District of New Jersey.
The company says that it will seek authorization to maintain operations during the bankruptcy process, including paying employee wages and benefits and paying suppliers and vendors.
The company says it expects to close "a significant portion, if not all" of its brick-and-mortar locations.
"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," Toal said.
RTW is also the parent of Fashion to Figure and Happy x Nature and has 387 stores across the country.
The company was founded more than 100 years ago under the name Lerner Shops before changing its name to New York & Co. in the 1990s.
Last week, RTW stopped trading on the New York Stock Exchange after the exchange applied to the Securities and Exchange Commission to delist the company.
The company now trades on OTC Pink under the symbol RTWI. The stock at last check was off 21% at 9 cents a share.