New York & Co. parent bankrupt, may close all brick-and-mortar stores

By Caroline Salls

Pittsburgh, July 13 – RTW Retailwinds, Inc., which operates retailers New York & Co., Fashion to Figure, and HappyxNature, filed Chapter 11 bankruptcy Monday in the U.S. Bankruptcy Court for the District of New Jersey and plans to close a significant portion, if not all, of its brick-and-mortar stores, according to a company news release.

The company said it has filed customary motions that will enable it to maintain operations in the ordinary course of business, including the payment of employee wages and benefits without interruption, payment of suppliers and vendors and the use of cash collateral to fund operations.

In connection with its plans, RTW said it has launched a store-closing and liquidation process, although it will continue to operate its business in the near term, including continuing to reopen its previously temporarily closed brick-and-mortar stores, when and where appropriate.

The company said it is evaluating its strategic alternatives, including the potential sale of its eCommerce business and related intellectual property.

On July 2, the company entered into a third amendment to its loan and security agreement with Wells Fargo Bank, NA, the release said. Under that amendment, RTW said it expects to repay the $12.7 million outstanding balance under the loan agreement by Aug. 31.

“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,” chief executive officer and chief financial officer Sheamus Toal said in the release.

“As a result, 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.”

According to court documents, RTW had $405.36 million in total assets and $449.96 million in total debt as of Monday.

The company’s largest unsecured creditors are Easy Fashion Macao Commercial Offshore Ltd., with a $28.04 million trade claim; MGF Sourcing US, LLC of Columbus, Ohio, with a $16.54 million trade claim; Li & Fung Trading Ltd. of Kowloon, with an $8.14 million trade claim; Amos Eastern Apparel Inc. of New York, with a $4.73 million trade claim; Sunrise Apparel Group LLC of Los Angeles, with a $3.68 million trade claim; F.O.B. Garments Ltd. of Kowloon, with a $1.5 million trade claim; VNO Rent Receipt Account of Pittsburgh, with a $1.37 million trade claim; LLS of Columbus, Ohio, with a $1.32 million trade claim; Fortune Footwear Inc. of New York, with a $1.29 million trade claim; and Allied Printing of Manchester, Conn., with a $1.27 million trade claim.

The company’s restructuring counsel is Cole Schotz PC, its restructuring adviser is BRG, LLC, and its investment banker is B. Riley FBR, Inc.

The company is a New York-based retailer of women’s apparel. Its Chapter 11 case number is 20-18445.

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