Specialty chain Dots has filed a voluntary Chapter 11 petition for bankruptcy court protection.
The petition was filed in a Newark bankruptcy court under the corporate name Dots LLC. The company said it will pursue a restructuring plan that includes the sale of the company as a going concern. The petition also estimated $50 million to $100 million in assets, and $100 million to $500 million in liabilities.
Dots has secured a commitment of $36 million in debtor-in-possession financing from Salus Capital, its existing lender. The retail chain has also shuttered more than 30 underperforming stores, and will continue to evaluate the possibility of additional store closures over the next few months. The company, which targets the women ages 25 to 35 in the value price distribution channel, has 1,250 full-time employees and 2,250 part-time staffers.
Lisa Rhodes, the retail chain’s chief executive officer, said in a statement filed with the bankruptcy court that “prior management instituted a number of new merchandising strategies and operational tactics that resulted in a downturn in store traffic and overall financial performance” in the fourth quarter of 2011, and that the chain’s financial issues were exacerbated by “adverse economic conditions,” as well as a burdensome lease portfolio.
Rhodes said the new management team, hired in the second half of 2012, has instituted a repositioning strategy, and that the retailer is still in turnaround mode. While Irving Place Capital, which acquired the company in 2011, has “devoted significant resources to fund the company’s operations and cash needs,” Dots continues to face hurdles regarding meeting cash and noncash obligations, she said.
The ceo added that Dots’ liquidity became strained in October when some vendors and factors either shortened the time frame for payment for goods or began demanding payment upon delivery.
Dots hired consulting firm PwC and legal counsel Lowenstein Sandler in December to evaluate strategic options, including the sale of the company.
For the fiscal year ended Jan. 31, 2013, Rhodes said Dots posted $338.8 million in sales, versus $346.2 million in the same 2012 period. That compares with the $293.7 million sales estimate for the year ending Jan. 31, 2014.
The top 10 unsecured creditors are Robert A. Glick, Chagrin Falls, Ohio, noteholder in the amount of $14.1 million; CIT Group, New York, $1.7 million; Wells Fargo, Woburn, Mass., $1.1 million; Hana Financial Inc., Los Angeles, $929,901.88; Heart & Hips, Vernon, Calif., $831.131.51; Rosenthal & Rosenthal, New York, $698,790.28; Merchant Business Credit, New York, $544,810.36; Finance One Inc., Los Angeles, $533.227.76; Jacmel Jewelry Inc., Long Island City, N.Y., $495,278.15, and Land N Sea, New York, $426,634.24.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye