This article focuses on recent bankruptcy filings in the retail sector, particularly among teen and women’s apparel companies. In recent months, The Wet Seal Inc., Delia’s, Inc., Deb Stores Holdings LLC, and Cache Inc. all sought bankruptcy protection. The young adult retail sector continues to experience severe drops in sales and stock prices, as brick-and-mortar retail stores lose consumers to e-commerce. Specialty teen chains also face increasing competition from apparel discount department stores which are generally viewed as a better value by consumers.
Reorganization
On Jan. 15, 2015, teen retail chain The Wet Seal Inc. and affiliated debtors filed petitions for relief under chapter 11 in the U.S. Bankruptcy Court for the District of Delaware. A week prior to the filing, Wet Seal closed more than half of its stores, planning to focus on website sales and its strongest locations to streamline business operations.
