About 6,700 retail stores closed so far this year.
Sussberg disclosed the tally to Delaware Bankruptcy Court Judge Christopher S. Sontchi at a court hearing Wednesday during his brief overview on the backdrop leading to Charming Charlie’s filing of its Chapter 11 petition on Monday.
Sussberg also said his client is the “20th major retailer to file in 2017.” And while he said a contributor to the retail bankruptcies has been the move to online shopping because “people want things faster and more simply,” he also said the shift doesn’t mean that retail, or specifically a brick-and-mortar presence, is ending. Sussberg specifically said his client still has a reason to exist.
The attorney told the judge that Charming Charlie’s problem was liquidity. It had under $1 million in cash and needed much more to secure new inventory for its stores, which was why it filed 12 days before Christmas, Sussberg said.
Retailers typically wait until after the holidays to file so they can collect as much cash as possible from the holiday selling season.
During Wednesday’s hearing, Sontchi approved a series of first-day orders that allow the retailer to continue operations and ensure the delivery of new merchandise. Those orders include approval of an interim order on financing.
The company’s chief financial officer Robert Adamek said in a court document that another problem, which Sussberg also noted at the hearing, was the company’s offer of merchandise that sometimes included as many as 26 different hues, an approach that caused it to be saddled with excess merchandise in underperforming color offerings.
The retailer’s Back-to-Basics strategy to restructure the business will help to streamline its operational model.