SSG Capital Advisors acted as the investment banker to A’GACI in the placement of exit financing and restructuring pursuant to a Chapter 11 plan of reorganization in the U.S. Bankruptcy Court for the Western District of Texas. The plan was confirmed and became effective in August 2018.
Founded in 1971 and headquartered in San Antonio, TX, A’GACI is a multi-channel fast fashion retailer and lifestyle brand for young women. The company maintains an active online presence and sells apparel, shoes and accessories at value prices through its website and 55 store locations across 8 U.S. states and territories.
After years of successful operations, A’GACI suffered poor financial performance after opening 21 new store locations across Arizona, California, Florida, Nevada and Puerto Rico from 2015 to 2017. The significant expansion, combined with the flawed implementation of a new ERP system, strained the company’s resources and delayed its response to evolving consumer shopping preferences and declining mall traffic.
Shortly after the ERP implementation, a number of the company’s most profitable stores in Texas, Florida and Puerto Rico were severely impacted by Hurricanes Harvey, Irma and Maria, with 24 locations temporarily closed. Management subsequently needed to optimize the store portfolio, reduce fixed costs and identify a new capital partner to support a return to profitability. A’GACI filed for protection under Chapter 11 of the U.S. Bankruptcy Code in January 2018.
A’GACI retained SSG to advise on strategic alternatives, including a possible sale or restructuring of the existing business. A comprehensive marketing process did not produce acceptable bids and SSG sought new financing to facilitate the company’s plan of reorganization and exit from bankruptcy. SSG solicited interest from several lenders and enabled the company to maximize value, preserve jobs, maintain both vendors and customers and exit bankruptcy in seven months.
This process allowed A’GACI to avoid a liquidation or sale of its assets, unlike many recent retail bankruptcies, and achieve a true Chapter 11 reorganization.