Delia’s Inc. and eight of its subsidiaries filed for Chapter 11 bankruptcy protection and reached an agreement with Salus Capital Partners LLC for $20 million in debtor-in-possession financing.
The troubled teen and tween retailer said Friday that it would liquidate its stores and file for Chapter 11 protection in the “very near term.” The company listed $74 million in assets and $32.2 million in liabilities on its bankruptcy petition, filed on Sunday in U.S. Bankruptcy Court for the Southern District of New York in White Plains, N.Y.
Ryan Schreiber, general counsel and secretary of the firm, has been named chief executive officer and Edward Brennan, most recently vice president of finance, was appointed chief financial officer following the resignations of Tracy Gardner and Brian Lex Austin-Gemas as ceo and chief operating officer, respectively.
Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC have been retained to dispose of merchandise, trade fixtures and equipment.
The DIP facility with Salus, subject to approval by the bankruptcy court, will incorporate $18.5 million outstanding under Delia’s previous credit facility with Salus.
Delia’s operates 92 stores; a distribution center in Hanover, Pa., and the delias.com e-commerce site.
The company anticipates some recovery for unsecured creditors but none for holders of the company’s common and preferred stock.
Delia’s has struggled along with other teen retailers in recent years, but lacked the financial resources to weather the weakened condition of the teen market that’s seen far bigger players suffer losses in market share and sales.