Ashley Stewart, a New Jersey-based retailer of plus-sized women’s clothes, announced it will immediately close 27 underperforming stores as a part of a Chapter 11 bankruptcy restructuring plan that it said will likely result in a sale of the company.
Just one New Jersey location, in the Cherry Hill Mall, is set to close, an Ashley Stewart spokesman said. Ashley Stewart has 168 locations and 1,750 full- and part-time employees across 24 states, Washington D.C., and the U.S. Virgin Islands, the company said in a news release. Nine of those stores, including the Cherry Hill location, are in New Jersey.
The company filed for bankruptcy protection today in U.S. Bankruptcy Court for the District of New Jersey. In a separate statement, an Ashley Stewart official said potential buyers have signaled their interest in acquiring the company.
“We are encouraged to see that several entities from both the financial and apparel industries have expressed interest in Ashley Stewart,” Michael Abate, senior vice president of finance, said.
“The plus-size market is poised for increased growth and the Ashley Stewart shopper is in the prized 25-55 age demographic, when women are at the height of their earning power,” he continued.
The company’s statement said Ashley Stewart suffered a decline in revenue and profitability in 2012 “due to a number of factors that have since been corrected.” It says it has brought on new senior management during the past six months and refocused its merchandizing and e-commerce efforts.
According to its bankruptcy filing, Ashley Stewart has assets and liabilities each between $10 million and $50 million. Its top creditors include Federal Express Corp., which is owed $824,700; By Design LLC, which is owed $737,102; and Les Vetements Multiwear Inc., which is owed $526,621, the filing said.
Ashley Stewart was founded in 1991 and was bought in 2010 by a private equity affiliate of Gordon Brothers Group. In a separate filing, a Gordon Brothers official said that Ashley Stewart had determined before the bankruptcy filing to close stores immediately so that the can be vacated by the end of March in an effort to stem further losses and preserve the company’s liquidity.
Ashley Stewart is the latest retail chain to announce significant store closures. Last week, RadioShack, Staples and Children’s Place announced plans to close retail locations.