Count Alex and Ani as the latest retailer to succumb to the disruptions of the coronavirus.
The East Greenwich, R.I.-based bangle and costume jewelry company filed for Chapter 11 bankruptcy protection from its creditors late Wednesday.
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But the company said it would continue to operate during the process, which will be conducted through the U.S. Bankruptcy Court in Delaware.
Lenders and equity sponsors entered into a restructuring support agreement with the company that was implemented with the filing.
At the same time, the company has also begun to look for buyers for its assets.
“We have worked diligently to overcome challenges with our capital structure, and we are very pleased with our progress from an operational efficiency standpoint,” said Alex and Ani’s chief restructuring officer Robert Trabucco. “In 2020, COVID-19 forced the company to pause its key strategic growth initiatives, temporarily close stores and scale back its operations in light of reduced in-store customer demand. During that time, Alex and Ani continued to invest in its ecommerce platform.”
The company said it would continue to have the financial resources needed to “purchase the goods and services necessary to fulfill customer’s needs.”
“Our employees will continue to be paid as usual during this process,” Trabucco said. “The company will look to optimize its retail footprint, bolster the ecommerce platform, and focus on strategic wholesale accounts.
“This process and proposed transaction is positive news for our employees, our customers, and our suppliers,” he said. “ Alex and Ani will have enhanced access to the financial resources with an optimized capital structure necessary to continue to prosper and grow. By utilizing the Chapter 11 process, we are able to ensure an expedited and orderly right-sizing of our balance sheet and operations.”
That’s putting a pretty brave face on a tough situation. But Alex and Ani is by no means alone in being overwhelmed by its debts. It just appears to be part of another wave of filings — the companies that made it through the worst of the pandemic in the U.S., but couldn’t keep going even as the economy started to open up.
A laundry list of fashion’s biggest names filed for bankruptcy last year, with those in the weakest financial position going first and already out of court and pursuing their futures with a trimmed down balance sheet.
Among the other companies that went bankrupt were Neiman Marcus, J.C. Penney, J. Crew, Brooks Brothers, Ascena Retail Group, Centric Brands and many more.
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