Delia’s Inc., the troubled omnichannel tween retailer, will close all stores and file for Chapter 11 bankruptcy court protection in the “very near term.”
The retailer has signed an agency agreement with Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC to dispose of all merchandise and other assets, such as furnishings and fixtures, with sales of merchandise beginning as soon as today. The company operates about 95 stores.
“The company does not anticipate any value will remain from the bankruptcy estate for the holders of the company’s common and preferred equity, although this will be determined in the anticipated bankruptcy proceedings,” Delia’s said in the announcement of its plans to liquidate.
The company announced a review of strategic alternatives in June, citing “several inquiries from third parties regarding a potential acquisition of the company.” The firm had worked with Janney Montgomery Scott LLC in its pursuit of options.
However, on Friday it reported that it had been unable to find a merger partner “or obtain an acquisition or financing proposal enabling the company to remain a going concern.”
In the first six months of the current fiscal year, ended Aug. 2, Delia’s net loss rose to $25.9 million from a loss of $21.3 million in the comparable 2013 period. Sales declined 24.4 percent to $51.7 million. Comparable sales, including direct-to-consumer transactions, fell 20.4 percent.
Tracy Gardner became chief executive officer of Delia’s in May 2013, a month after joining the troubled retailer as chief creative officer. She’d previously held senior management roles with the Gap and Banana Republic brands of Gap Inc., Lands’ End and J. Crew.
Deb Shops filed for Chapter 11 bankruptcy protection on Thursday.