Retailing giant Christopher & Banks files for bankruptcy, potentially forcing closure of all retail outlets
Christopher & Banks Files for Bankruptcy Amidst Pandemic Struggles
In a challenging year for retail, another casualty has emerged. Christopher & Banks, a women's clothing retailer founded in 1956, specialising in value-priced apparel, has filed for Chapter 11 bankruptcy.
The pandemic has had a significant impact on the company's business, leading to the temporary closure of its stores in the spring, which account for 75% of its sales. This closure resulted in a loss of the primary revenue channel for the company.
Despite furloughing staff, cutting executive pay, skipping rent, and receiving a $10 million loan from the federal stimulus package, Christopher & Banks' liquidity remained constrained and its finances stressed. The company has defaulted on key loans that keep it afloat, and threats of eviction from landlords have occurred due to non-payment of rent.
In an attempt to turn the tide, the company is planning to sell its e-commerce unit during Chapter 11. Active discussions are underway with potential buyers for this division. However, no potential buyers have been found for Christopher & Banks' physical footprint.
Hilco Merchant Resources has been hired to run liquidation sales at all 449 stores of Christopher & Banks. The company plans to close a significant portion, if not all, of its brick-and-mortar stores.
CEO Keri Jones attributed the Chapter 11 filing primarily to the pandemic's impact. With 449 stores, it targets smaller markets with fewer than 75,000 people.
The company's sales were down 22.6% in the third quarter. In the face of these challenges, Christopher & Banks is considering a future as an e-commerce specialist after potentially shuttering its physical operations.
At present, there are no publicly available reports or information about companies negotiating to acquire the e-commerce division of Christopher & Banks. The retail landscape continues to evolve, and only time will tell how Christopher & Banks will navigate these changes.
