Delia’s, a retail company primarily marketing to teenage girls, said it will have to file for Chapter 11 bankruptcy protection in the “very near term” and that it will seek the bankruptcy court’s consent to close existing stores and distribution centers.
The company said it has entered into an agreement with Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC that will have Delia’s liquidate all merchandise and dispose of certain furnishings, trade fixtures, equipment and improvements to real property with respect to the company’s store. The retailer plans to sell its apparel, accessories and footwear through its website, direct mail catalogs and retail stores, in going out of business sales.
Delia’s is the second teen retailer to file for bankruptcy this week as Deb Shops announced its filing Thursday, the second time the retailer has filed for bankruptcy in less than four years.
The company reported a loss in each of its last five fiscal years, with a decline in mall traffic and sparse website orders. In the company’s most recent financial statement for the fiscal second quarter, total revenues were down 22.4% to $25.7 million, and comparable sales, including comp store sales and direct-to-consumer sales, dipped 17.5%.
Delia’s has been running low on cash and reported in September that it was collecting numerous inquiries about a takeover, merger, or debt or equity financing, but those efforts proved unsuccessful.
The retailer does not anticipate any remaining value from the bankruptcy estate for the holders of the company’s equity, but that will be determined in the predicted bankruptcy proceedings.