Plus-size retailer Avenue is closing some stores, but now there are questions regarding the overall health of the chain.
It wasn’t immediately clear how many stores are on the chopping block. Store associates at different locations said Thursday that the stores either have been closed or are in the process of closing. They didn’t know the exact number of total doors slated for closure.
The retailer currently has a “buy one, get one at 75 percent off” promotion for tops and bottoms at its stores and its website is hosting a 40 percent off flash sale for all new styles. That’s in addition to the extra 50 percent off on clearance items.
Avenue earlier this year completed a “strategic recapitalization” in April that included a new revolving credit facility and new capital from its owner, private equity firm Versa Capital Management. The new funding, which retired an existing term loan, was to fund “ongoing liquidity and working capital needs and support the company’s strategic plans.”
But now it seems the chain might be edging towards the classification of distressed retailer. Recent rumblings suggest financial pressures at the chain. One investment banker noted that there’s been “too many rumors” lately connected to Avenue, suggesting that “something is happening” but that it was too early to determine what might be the end result.
And on Thursday, the New York Post noted that the business has to find a buyer within 60 days or the operation would be shut down. Calls to Avenue’s headquarters in Rochelle Park, N.J., for comment went unanswered. A spokesman for Versa said, “We remain focused on Avenue as a retail destination for style-minded, plus-size women.”
Another chain shutting down wouldn’t be a surprise given the number of retailers that have filed for bankruptcy this year. The most recent is Charming Charlie, which filed for bankruptcy court protection and then came out, and is now back in bankruptcy but in liquidation mode. And then there’s Dress Barn, which is in the process of winding down its business outside of the need for a bankruptcy filing.
Avenue has been in operation for more than 30 years, beginning first as Sizes Unlimited in 1983. It too did a tour in bankruptcy court in 2012 when the company was then United Retail Group. An affiliate of Versa became the new owner two months later. It currently has about 250 stores in operation.
One brick-and-mortar competitor of Avenue’s is Ashley Stewart, which seems to be holding its own since exiting bankruptcy court proceedings in 2013. While fashionable, plus-size apparel is viewed as a wide-open field where there’s a long runway for growth, and it also is sector that is ripe for disruption.
Many newer direct-to-consumer brands, such as Universal Standard, have entered the market with better fit, fabric quality, product options and social media connections that resonate better with their customer base. And, given the inclusivity movement that’s been growing across the country, other established brands and retailers have been adding to their offerings by increasing their size-range options.
Updated to include statement from Versa.