RTW Retailwinds, the parent company to New York & Co., has joined the slew of other retailers filing for bankruptcy amidst the coronavirus pandemic.
According to The Washington Post, the women’s fashion retailer projects to close nearly all of its 400 locations across 32 states.
Iconic companies like J. Crew, J.C. Penney, and Nieman Marcus have also filed for chapter 11 during the pandemic but believe financial restructuring can lead to a future rebound. However, RTW sees selling all or parts of its business as the best-case scenario.
“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 RTW Retailwinds CEO and CFO Sheamus Toal in a press 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.”
The retailer said it had reopened approximately 92 percent of stores temporarily closed due to COVID-19 and will continue operations both in-store and online.
Still, with coronavirus cases rising as states move to reopen, the future of brick and mortar apparel remains uncertain. Retailers have closed locations, furloughed employees, stopped paying rent, and filed for bankruptcy protection to stay afloat, but that may not be enough.
Even 202-year-old Brooks Brothers, the nation’s oldest brand, is not safe from the apparent fall of retail.
Brooks Brothers filed for bankruptcy July 8. It announced it would likely shut down its U.S. manufacturing plants in Massachusetts, North Carolina, and New York by Aug. 15— none of which have turned a profit and produce just seven percent of its merchandise, according to CNBC.
Known for its upscale suit and tie apparel targeted towards business professionals, a changing workplace culture to more relaxed dress codes, coupled with a push towards working from home, put significant financial pressure on the retailer.
“Brooks Brothers has long suffered from a failure to decisively adapt to changing trends,” said Neil Saunders, managing director of GlobalData Retail. “It has become increasingly out of step with a new generation of consumers who are looking for a more edgy approach to smart casual.”
Brooks Brothers was looking for buyers long before the pandemic, but the outbreak of COVID-19 and the ensuing global health crisis delayed the sale process and forced the company to file for bankruptcy until it can finalize a deal.
Last year, the retailer made $991 million in sales, with 20 percent coming from online purchases. Agreements and contracts with Macy’s, Nordstrom, NetJets, and United Airlines have helped steady the business.
As U.S. coronavirus cases rise, the future continues to look bleak for clothing retailers. Like Sucharita Kodali, a retail analyst at Forrester Research, told The Washington Post, “There’s not really much that retailers can do.”