New York & Co. owner RTW Retailwinds warns bankruptcy filing imminent
New York & Company store in North Brunswick Township, New Jersey.
Michael Brochstein | SOPA Images | Getty Images
New York & Co. parent RTW Retailwinds on Wednesday morning warned about its ability to continue as a going concern, and that it might be preparing to file for Chapter 11 bankruptcy protection, hit hard by the Covid-19 crisis.
It said in an 8-K filing with the Securities and Exchange Commission that it is in the process of finalizing a 10-K filing with its auditor that will reflect, among other things, “a substantial doubt” about its ability to continue as a going concern. It said it needs more time to consider the disclosures about those matters, and it has requested an extension to file its annual report.
Should RTW Retailwinds file for bankruptcy, it would join a growing list of retailers that have been pushed to the brink during the coronavirus pandemic, as so-called nonessential retailers’ stores were temporarily forced shut. So far, that list of companies that have filed for Chapter 11 includes department store chains Neiman Marcus, J.C. Penney and Stage Stores, home goods retailer Tuesday Morning and apparel brand J.Crew.
RTW Retailwinds said the Covid-19 crisis will have a material adverse impact on its finances, but it cannot quantify it at the time. It said its inventory has piled up in stores and distribution centers, aging over the past two months, and is now “significantly impaired.”
It said it did not pay rent to its landlords for April and May, and has also not made recent payments to vendors. As a result, it said it is receiving default notices from many landlords and vendors. And it said it might be in default of all of its store lease agreements, “but has not yet received default notification from all landlords.”
RTW Retailwinds currently operates more than 385 retail and outlet locations, across 33 states, according to its website.
The company also said it might be in default under a loan agreement with Wells Fargo.
RTW Retailwinds said in the 8-K filing that, without seeking bankruptcy protection, “it does not have ability to raise additional capital at this time.” It went on to call a filing “probable.”
Shares of RTW Retailwinds were halted Wednesday morning for news pending. The stock has fallen more than 50% this year. The company has a market cap of $25.8 million.
— CNBC’s Amanda Lasky and Courtney Reagan contributed to this report.