New York & Co. Parent Warns Bankruptcy Is ‘Probable’
Click here to read the full article.
RTW Retailwinds Inc. may be the next retailer to succumb to bankruptcy.
In a filing today with the Securities and Exchange Commission, the New York & Co. parent warned that it has been weighing options including Chapter 11 bankruptcy, which is now “probable.”The company said its annual report, which it has filed an extension for, will “reflect a substantial doubt about the company’s ability to continue as a going concern.”
More from Footwear News
Neiman Marcus Denies Breaching Loan Terms as It Navigates Bankruptcy
Ready to Shop JCPenney's Store Closing Sales? Here's When They'll Start
In today’s filing, RTW Retailwinds said it expects, because of the coronavirus, to see a “material adverse impact” on its financial operations and cash flow for the 2020 fiscal year. To maintain financial flexibility amid store closures — the company’s fleet includes more than 385 retail and outlet outposts — it drew down $40 million from its loan agreement, of which it believes it is now in default. In addition, the company did not pay rent on its units for the months of April and May and has not made recent payments to vendors. It said it has begun receiving default notices from both landlords and vendors.
The retailer had a retained deficit of $164.4 million on Feb. 1. As of Feb. 1, the company had $189.5 million in right-of-use assets and $44.9 million in fixed assets. However, RTW Retailwinds warned that, should it file for bankruptcy, it could be determined that both asset types have “little to no value” given the current economic climate. Without seeking bankruptcy protection, RTW Retailwinds said, “it does not have ability to raise additional capital at this time.”
If RTW Retailwinds proceeds with a Chapter 11 filing, it will be the latest in a growing list of retailers that have gone bankrupt during the COVID-19 crisis. Among the companies to file for Chapter 11 protection last month were JCPenney, Neiman Marcus Group and J.Crew.
Sign up for FN's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
