RTW Retailwinds, Inc. Voluntarily Files Chapter 11 Bankruptcy
13 Julio 2020 - 6:45AM
Business Wire
~eCommerce Operations Continue to
Operate~
~92% of Brick-and-Mortar Locations Re-opened
From COVID-19 Closures~
~Company Expects to Fully Repay
Approximately $12.7M Remaining Loan Outstanding~
RTW Retailwinds, Inc. [OTC PINK:RTWI], an omni-channel specialty
apparel retail platform for powerful celebrity and consumer brands,
today announced that it and its subsidiaries (collectively, the
“Company”) have filed voluntary petitions for relief under Chapter
11 of the Bankruptcy Code in the United States Bankruptcy Court for
the District of New Jersey (the “Bankruptcy Court”). The Company
has filed customary motions with the Bankruptcy Court that will
authorize, upon Bankruptcy Court approval, the Company’s ability to
maintain operations in the ordinary course of business, including,
among other things, the payment of employee wages and benefits
without interruption, payment of suppliers and vendors in the
normal course of business, and the use of cash collateral. These
motions are typical in the Chapter 11 process and the Company
anticipates that they will be approved shortly after the
commencement of its Chapter 11 case.
Details on the Company’s Chapter 11 process and go-forward
strategy are as follows:
- The Company expects to close a significant portion, if not all,
of its brick-and-mortar stores and, in connection therewith, the
Company has launched a store closing and liquidation process. The
Company, however, will continue to operate its business in the
ordinary course in the near term, including continuing to re-open
its previously temporarily closed brick-and-mortar stores, when and
where appropriate; and
- The Company is evaluating any and all strategic alternatives,
including the potential sale of its eCommerce business and related
intellectual property.
As previously announced, on July 2, 2020, the Company entered
into Amendment No. 3 (“Amendment No. 3”) to the Fourth Amended and
Restated Loan and Security Agreement and Joinder with Wells Fargo
Bank, National Association, as administrative agent and lender.
Under Amendment No. 3, the Company anticipates the full repayment
of the approximately $12.7 million remaining outstanding balance
under the Loan Agreement by August 31, 2020.
Sheamus Toal, Chief Executive Officer and Chief Financial
Officer of RTW Retailwinds, Inc., said, “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. 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. I would like to
thank all of our associates, customers, and business partners for
their dedication and continued support through these unprecedented
times.”
Additional details:
- The Company’s restructuring counsel is Cole Schotz P.C., its
restructuring advisor is BRG, LLC, and its investment banker is B.
Riley FBR, Inc.
- Court filings and other documents related to the process are
available at https://cases.primeclerk.com/RTWRetailwinds.
About RTW Retailwinds
RTW Retailwinds, Inc. (together with its subsidiaries, the
"Company") is a specialty women's omni-channel retailer with a
powerful multi-brand lifestyle platform providing curated fashion
solutions that are versatile, on-trend, and stylish at a great
value. The specialty retailer, first incorporated in 1918, has
grown to now operate approximately 378 retail and outlet locations
in 32 states while also growing a substantial eCommerce business.
The Company's portfolio includes branded merchandise from New York
& Company, Fashion to Figure, and Happy x Nature. The Company's
branded merchandise is sold exclusively at its retail locations and
online at www.nyandcompany.com, www.fashiontofigure.com,
www.happyxnature.com, and through its rental subscription
businesses at www.nyandcompanycloset.com and
www.fashiontofigurecloset.com. Additionally, certain product, press
releases and SEC filing information concerning the Company are
available at the Company's website: www.nyandcompany.com.
Forward-looking Statements
This press release contains certain forward-looking statements,
including statements made within the meaning of the safe harbor
provisions of the United States Private Securities Litigation
Reform Act of 1995. Some of these statements can be identified by
terms and phrases such as “expect,” “anticipate,” “believe,”
“intend,” “estimate,” “continue,” “could,” “may,” “plan,”
“project,” “predict,” and similar expressions and references to
assumptions that the Company believes are reasonable and relate to
its future prospects, developments and business strategies. Such
statements, are subject to various risks and uncertainties that
could cause actual results to differ materially. Factors that could
cause the Company's actual results to differ materially from those
expressed or implied in such forward-looking statements include,
but are not limited to, (i) the risks associated with the spread of
COVID-19 and its impact on the Company's sales and supply chain
including the Company's store closures as a result therefrom and
significant declines in revenues caused thereby; (ii) the Company's
dependence on mall traffic for its sales and the continued
reduction in the volume of mall traffic; (iii) the Company's
ability to anticipate and respond to fashion trends; (iv) the
impact of general economic conditions and their effect on consumer
confidence and spending patterns; (v) changes in the cost of raw
materials, distribution services or labor; (vi) the potential for
economic conditions to negatively impact the Company's merchandise
vendors and their ability to deliver products; (vii) the Company's
ability to open and operate stores successfully; (viii) seasonal
fluctuations in the Company's business; (ix) competition in the
Company's market, including promotional and pricing competition;
(x) the Company's ability to retain, recruit and train key
personnel; (xi) the Company's reliance on third parties to manage
some aspects of its business; (xii) the Company's reliance on
foreign sources of production; (xiii) the Company's ability to
protect its trademarks and other intellectual property rights;
(xiv) the Company's ability to maintain, and its reliance on, its
information technology infrastructure; (xv) the effects of
government regulation; (xvi) the control of the Company by its
largest shareholder and any potential change of ownership of the
Company including the shares held by its largest shareholder;
(xvii) the impact of tariff increases or new tariffs; (xviii) risks
arising from the delisting of trading of the Company’s common stock
on the NYSE; (xix) risks and uncertainties relating to the Chapter
11 cases, including but not limited to, the Company’s ability to
obtain Bankruptcy Court approval with respect to motions filed in
the Chapter 11 cases; (xx) the effects of the Chapter 11 cases on
the Company and on the interests of various constituents; (xxi)
Bankruptcy Court rulings in the Chapter 11 cases and the outcome of
the Chapter 11 cases in general; (xxii) the length of time the
Company will operate under the Chapter 11 cases; (xxiii) risks
associated with third party motions in the Chapter 11 cases; (xxiv)
the potential adverse effects of the Chapter 11 cases on the
Company’s liquidity or results of operations and increased legal
and other professional costs necessary in the Chapter 11 cases;
(xxv) the impact of the Company’s ability to successfully implement
planned store closures; (xxvi) uncertainty associated with
evaluating and completing any strategic or financial alternative,
as well as the Company’s ability to implement and realize any
anticipated benefits associated with any alternative that may be
pursued; (xxvii) the Company’s liquidity and ability to continue as
a going concern; (xviii) risks associated with any default under
the Company’s debt agreement; (xxix) risks associated with the
Company’s ability to make payments on and to repay or refinance the
Company’s debt or generate sufficient cash; and (xxx) those
discussed under the heading "Item 1A. Risk Factors" in the
Company’s Annual Report on Form 10-K for fiscal year 2019. The
Company undertakes no obligation to revise the forward-looking
statements included in this press release to reflect any future
events or circumstances.
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Investor Relations: ICR, Inc. (203) 682-8200 Allison
Malkin