His new New York store is on the corner of Howard Street and Crosby Street in SoHo.
The decision could set a precedent and topple other beach bans that have caused an international furor.
The company said sales dropped in the oil belt region.
A decision from a Manhattan bankruptcy court judge is expected later this week.
The company said “lack of clarity across the assortment” was the problem for the quarter.
The retailer’s cleaner stores and faster checkout resulted in better sales for the second quarter and impressed Wall Street.