Body Central Corp., a mall-based specialty apparel retailer, announced Wednesday that it is having substantial liquidity challenges and has taken strategic steps to potentially evaluate alternatives for the business. The company said in a statement, “These alternatives may include and are not limited to the possibility of a Chapter 11 bankruptcy filing or an insolvency proceeding.”
On Jan. 6, the company received a notice of default from the holders of its outstanding $18 million in debt, claiming the company is in default under secured convertible notes, which may result in default under the company’s senior credit facility.
Body Central said it is under the care of professional advisers to help evaluate the situation.
Ben Rosenfeld, president and CEO of Body Central, said, “While the Company has made significant reductions in expenses and reduced excess inventory levels, our top line remains challenged by both the overall market environment and the transition time required to complete the merchandise transformation that began in the latter half of 2014.”
He concluded, “The management team and board, along with its advisers will continue to evaluate all available alternatives that may be appropriate for the business.”
There is no timetable for the process and the company has no intention of disclosing new developments about this process unless its Board of Directors approves a specific action or alternative.