Shares of the parent company of venerable women's clothing retailer New York & Co. plunged Wednesday after RTW Retailwinds (RTW) - Get Report warned of a potential bankruptcy filing amid the coronavirus-driven downturn.
RTW Retailwinds' stock price cratered on the disclosure by the retailer to the U.S, Securities and Exchange Commission that there is "substantial doubt about the Company's ability to continue as a going concern," plummeting 33.8% to 26 cents a share.
RTW, the owner of the New York & Co. chain, which was founded in 1918, said it would be seeking an extension to file its annual, 10-K report "as additional time is required to consider the disclosures about these matters."
The 122-year-old retailer, which manufactures as well as sells work-oriented women's clothing, said all of its stores have been closed since March 19 in response to the coronavirus, with all store associates furloughed and a 50% reduction in its corporate headquarters staff as well.
RTW informed the SEC it has had a "retained deficit" of $164.6 million as of Feb. 1, with the company considering "available options, including restructuring its obligations or seeking protection under the bankruptcy laws."
In order to cut costs, RTW said it has also been in discussions with its vendors and the landlords of its retail stores to defer payments until its can reopen its outlets, with a staggered reopening slated for the first week of June.
However, RTW said it has not paid rent on its store locations for either April or May, and has not made recent payments to its vendors as well.