Clothing Retailer Delia’s Files for Bankruptcy

Teen clothing retailer Delia’s Inc has filed for bankruptcy and plans to liquidate its assets.
In its Sunday Chapter 11 filing with the U.S. Bankruptcy court, the company recorded total assets of $74 million and liabilities of $32.2 million. Additionally, Delia’s Chief Executive Tracy Gardner and Chief Operating Officer Brian Lex Austin-Gemas have resigned on Friday.
The New-York based company announced Friday that Hilco Merchant Resources and Gordon Brothers Retail Partners will assist in settling company assets, including equipment, furnishings and fixtures.
Salus Capital Partners has given Delia’s $20 million debtor-in-possession credit so the chain may continue operations and conduct final store closings and sales.
“The company does not anticipate any value will remain from the bankruptcy estate for the holders of the company’s common and preferred equity although this will be determined in the anticipated bankruptcy proceedings,” Delia’s said in its Friday statement.
Delia’s is the latest clothing retailer to close up shop in the past year. Philadelphia-based company DEB filed for bankruptcy protection on December 4, attributing a shortage of capital to its demise.
Coldwater Creek, Loehmann’s, Ashley Stewart and Dots have also filed for bankruptcy in 2014.
Retailers have struggled in the wake of the recession and most have reported dreary sales. According to AP, Black Friday sales decreased by 7 percent in 2014. Americans have been turning to online retailers such as Amazon.com, who can provide a better discount on apparel than a brick and mortar store.
Major teen apparel competitors Abercrombie & Fitch Co. and Aeropostale Inc have registered a decrease in shares by 22 percent and 73 percent respectively, over the past 12 months.
In February, Delia’s had 499 full-time and 1,190 part-time employees in its 95 nationwide stores, according to filings with the Securities and Exchange Commision.
Delia’s shares were listed at 1.8 cents, down 7.4 percent, in pre-market trading Monday morning.
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