Delia’s Inc., the struggling clothing chain that caters to teenage girls, filed for Chapter 11 bankruptcy protection and will liquidate all merchandise after failing to find a buyer. The company listed assets of $74 million and debt of $32.2 million in court papers filed in White Plains, New York. The New York-based chain, said Dec. 5 that it had entered into an agreement with Hilco Merchant Resources and Gordon Brothers Retail Partners to dispose of assets, including furnishings, trade fixtures and equipment.
“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 the Dec. 5 statement. Delia’s was founded in 1993 and owns and operates 92 stores in 29 states.
Delia’s is the latest clothing retailer to fold in the past year as shopping-mall traffic stagnates and consumers look to the Internet for bargains. The Philadelphia-based operator of Deb Shops, filed for bankruptcy Dec. 4, blaming a shortage of capital. Loehmann’s, Coldwater Creek, Dots and Ashley Stewart also filed due to declining sales and mounting losses.
Delia’s, which has been plagued by slow website orders, said in September that it was exploring a sale or merger, or debt or equity financing after receiving inquiries about a takeover. The company warned in a filing with the U.S. Securities and Exchange Commission that month that it might not have enough cash to last into the next year. A $30.5 million negative cash flow in the first half of 2014 left it with insufficient liquidity, the company said.
The company sells merchandise at stores and online and bills itself as a “girls only” lifestyle brand catering to customers ages 12 to 18.
The case is In re Delia’s Inc, 14-23678, U.S. Bankruptcy Court, Southern District of New York (White Plains).