RTW Retailwinds, Inc. Voluntarily Files Chapter 11 Bankruptcy
RTW Retailwinds, Inc. [OTC PINK:RTWI], an omni-channel specialty apparel retail platform for powerful celebrity and consumer brands, today announced that it and its subsidiaries (collectively, the “Company”) have filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey (the “Bankruptcy Court”). The Company has filed customary motions with the Bankruptcy Court that will authorize, upon Bankruptcy Court approval, the Company’s ability to maintain operations in the ordinary course of business, including, among other things, the payment of employee wages and benefits without interruption, payment of suppliers and vendors in the normal course of business, and the use of cash collateral. These motions are typical in the Chapter 11 process and the Company anticipates that they will be approved shortly after the commencement of its Chapter 11 case.
Details on the Company’s Chapter 11 process and go-forward strategy are as follows:
- The Company expects to close a significant portion, if not all, of its brick-and-mortar stores and, in connection therewith, the Company has launched a store closing and liquidation process. The Company, however, will continue to operate its business in the ordinary course in the near term, including continuing to re-open its previously temporarily closed brick-and-mortar stores, when and where appropriate; and
- The Company is evaluating any and all strategic alternatives, including the potential sale of its eCommerce business and related intellectual property.
As previously announced, on July 2, 2020, the Company entered into Amendment No. 3 (“Amendment No. 3”) to the Fourth Amended and Restated Loan and Security Agreement and Joinder with Wells Fargo Bank, National Association, as administrative agent and lender. Under Amendment No. 3, the Company anticipates the full repayment of the approximately $12.7 million remaining outstanding balance under the Loan Agreement by August 31, 2020.
Sheamus Toal, Chief Executive Officer and Chief Financial Officer of RTW Retailwinds, Inc., said, “The combined effects of a challenging retail environment coupled with the impact of the Coronavirus (COVID-19) pandemic have caused significant financial distress on our business, and we expect it to continue to do so in the future. As a result, we believe that a restructuring of our liabilities and a potential sale of the business or portions of the business is the best path forward to unlock value. I would like to thank all of our associates, customers, and business partners for their dedication and continued support through these unprecedented times.”