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Amid Potential Bankruptcy, New York & Co. Parent Faces Delisting From NYSE

RTW Retailwinds Inc. is at risk of being delisted from the New York Stock Exchange.

The apparel and accessories retailer, which operates under the ticker “RTW,” announced on Thursday that it received notice from the NYSE last week of its noncompliance with the stock exchange’s continued listing requirements. Over a consecutive 30-trading day period, its market capitalization was less than $50 million, and its stockholders’ equity was under $50 million.

To avoid delisting, RTW Retailwinds — parent to New York & Co. — has 45 days from its receipt of the notice to submit a business plan that advises the NYSE of the actions it has taken to comply with the market cap listing standards. If the stock exchange accepts the proposal, the company’s common stock will continue to be listed and traded, subject to quarterly monitoring. If a plan is not submitted or accepted, the NYSE could start delisting proceedings.

In yesterday’s release, RTW Retailwinds said it has experienced “substantial and recurring losses from operations,” adding that it is considering options including restructuring or seeking protection under a Chapter 11 bankruptcy filing. It also shared plans to notify the NYSE by July 6 on whether it intends to return to compliance under the listing requirements.

Watch on FN

Two weeks ago, the company wrote in a note submitted to the Securities and Exchange Commission that the coronavirus pandemic — which forced the two-month shutdown of its brick-and-mortar fleet and subsequently halted in-store traffic — had materially adversely impacted its cash flow and raised “substantial doubt” about its ability to continue as a going concern.

Should it file for bankruptcy, RTW Retailwinds said that it could shutter more than 150 locations or even its entire fleet of 387 outposts, including 116 outlets, in 33 states. In the 2019 fiscal year, it reported a 7.4% drop in revenues to $827 million, while profits declined from $4.2 million, or $0.06 per share, in the prior year to a $61.6 million loss, or 96 cents per share. Comparable store sales fell 5.4%.

As of June 17, the retailer’s 30 trading-day average market cap was roughly $23.2 million. Its last reported stockholders’ equity, which was on Feb. 1, was about $16 million.

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