UPDATE: Aug. 16 Avenue Files Chapter 11 Bankruptcy
Avenue Stores LLC filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware. The women’s plus-sized apparel and accessories retailer said it is taking this course of action to facilitate its transformation into an e-commerce-only platform.
Avenue plans to use Chapter 11 to facilitate a going-concern sale of its e-commerce business and a wind-down of all of its 222 remaining physical locations. Store closing sales have begun, and all stores are expected to close by the end of September.
It has secured a debtor-in-possession financing commitment of up to $11 million from its existing pre-petition lender which, when approved by the Court, should fund Avenue’s ongoing operations and administration of the reorganization proceedings.
What We Reported Earlier
Avenue is reportedly putting all of its stores on the chopping block.
According to a breaking story from Retail Dive, the women’s plus-size retailer is shuttering its locations across the United States in the coming weeks — an announcement reportedly made in a conference call to employees on Friday. The company has not confirmed plans to close, but the media outlet shared that store associates were instructed not to accept returns or sell gift cards.
In an official statement emailed to Retail Dive, a spokesperson for the firm’s owner, Versa Capital Management, said, “We remain focused on Avenue as a retail destination for style-minded, plus-size women.”
The news comes a week after Avenue filed a Worker Adjustment and Retraining Notification notice with the Department of Labor & Workforce Development in New Jersey for its Rochelle Park outpost, indicating the elimination of 152 jobs effective Sept. 30. WARN requires employers to provide 60 days notice in advance of mass layoffs.
In a report published early this month by FN sister publication Sourcing Journal, unnamed associates at various Avenue locations said that the stores “either have been closed or are in the process of closing.”
The retailer is currently hosting a flash sale on its website, with 50% off clearance items. It is also offering 30% off new items and a $25-off-$100 promotion.
Rapidly shifting consumer trends and the rise of e-commerce have contributed to a widespread downsizing of traditional brick-and-mortar stores. While some closures are the result of bankruptcy proceedings, including Payless and Gymboree, others are simply restructuring in an effort to bring down costs and prioritize better-performing channels amid the challenging retail environment.
Retail Store Closures: All the Companies That Are Downsizing in 2019
How These 3 Shoe Companies Went Bankrupt Twice
All the Brands & Retailers That Have Closed Their Flagship Stores in Manhattan
Watch FN’s interview with these top shoe players.