AVENUE Stores voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. The company is pursuing this course of action to facilitate its transformation into an e-commerce-only platform
AVENUE intends to use these proceedings to facilitate a going-concern sale of its e-commerce business and an orderly wind-down of all of its 222 remaining physical locations. Store closing sales have begun, and all stores are expected to close by the end of September.
AVENUE’s e-commerce business, consisting of Avenue.com, Cloudwalkers.com, and Loralette.com, will continue to operate and serve customers while an acquirer is being sought for this profitable business.
According to documents filed in first day motions, AVENUE has secured a DIP financing commitment of up to $12 million. PNC Bank will serve as administrative agent for the financing. PNC had also provided prepetition financing for AVENUE. When approved by the court, the DIP will fund AVENUE’s ongoing operations and administration of the reorganization proceedings.
In addition, AVENUE is seeking customary initial approval from the court to maintain certain customer programs and extend promotional offers while it seeks a buyer for its e-commerce business.
David Rhoads, president and chief financial officer of AVENUE, said, “As consumers have shifted away from physical stores to online retail channels in recent years, AVENUE, like many other retailers, has been burdened with declining store traffic, unfavorable real estate obligations, increasing labor costs and growth in both general and specialty competitors, all of which culminated in a significant decrease in physical store productivity after many years of previously solid financial performance.
At the same time, AVENUE.com accounts for roughly one-third of AVENUE’s business with a strong and growing revenue base that has continued to enjoy solid margins and profitability, making it clear that a shift to an e-commerce-only business model is the most viable way to continue serving AVENUE®’s loyal customers, whose needs for fit, fashion and value we hope to continue serving for years to come.”_x000D_
Configure Partners has been retained as the company’s investment banker to advise and assist AVENUE with the process of soliciting buyer interest and obtaining bids for the company’s continuing assets and operations to be sold subject to court approval.
Young Conaway Stargatt & Taylor is serving as the Company’s legal counsel.
Berkeley Research Group, is serving as AVENUE’s restructuring advisor while BRG’s Robert J. Duffy has been appointed as the company’s chief restructuring officer.
For more than 30 years, AVENUE has been a leader in the fashion industry for plus-size clothing.
