Christopher & Banks Corp. is the latest fashion chain to go bankrupt.
The specialty women’s retailer announced today that it has filed for Chapter 11 protection in the United States Bankruptcy Court for the District of New Jersey. It has sought a judge’s approval to continue paying employee wages and benefits as well as its suppliers and vendors.
However, Christopher & Banks — with 449 units across 44 states — expects to close a “significant portion, if not all,” of its brick-and-mortar locations as it undergoes the store closing and liquidation process. (It also owns women’s plus size clothier CJ Banks.) The Minneapolis-based company shared that it was in “active discussion” with potential buyers to sell its website and related assets.
According to president and CEO Keri Jones, the bankruptcy was spurred by the ongoing COVID-19 health crisis, which led Christopher & Banks to take “aggressive steps to protect our business while continuing to serve our customers in a healthy and safe environment.” She added, “Despite the tremendous advancements we have made in executing our strategic plan, due to the financial distress resulting from the pandemic and its ongoing impact, we elected to initiate this process and pursue a potential sale of the business in whole or in part to position the company for the future.”
Speculation around Christopher & Banks’ bankruptcy emerged last month when the company announced that it had hired investment banking firm B. Riley Securities Inc. to help it pursue strategic alternatives. Jones also revealed in its most recent earnings report — released in mid-December — that the pandemic has had an “outsized impact on our customer demographic as her shopping behavior is more pragmatic with limited demand for new outfits in the absence of social engagements.”
During the three-month period ended Oct. 31, a decline in foot traffic at its stores pushed sales down 22.6% to $72.8 million. The retailer also logged a loss of $10.8 million, or a loss of 29 cents per share, compared with the prior year’s income of $500,000, or earnings of $0.01 per share.
Over the past year, a number of boldface retailers have turned to Chapter 11 protection to save their businesses as the coronavirus pandemic rages on. J.Crew, Neiman Marcus and JCPenney were among the early filers, while Century 21 and Topshop parent Arcadia Group sought bankruptcy later in the year.