Secaucus, NJ—Ashley Stewart, the 168-unit plus-size women’s retailer, filed for Chapter 11 bankruptcy on Monday and plans to immediately close some 27 underperforming stores.
In its petition to the U.S. Bankruptcy Court for the District of New Jersey, the retailer said it suffered a decline in sales and profits during 2012 “due to a number of factors that have since been corrected.” Since then new senior management has been hired in the last six months and has refocused its merchandizing and e-commerce efforts.
In a separate statement, an Ashley Stewart spokesperson said potential buyers have signaled their interest in acquiring the company.
“We are encouraged to see that several entities from both the financial and apparel industries have expressed interest in Ashley Stewart,” said Michael Abate, senior vice president of finance. “The plus-size market is poised for increased growth and the Ashley Stewart shopper is in the prized 25 to 55 age demographic, when women are at the height of their earning power.”
The company said it would work with shareholders to implement a restructuring plan, which could result in a sale of a substantial amount of the company’s assets.
“This filing was a necessary step to get Ashley Stewart positioned on the right path for success,” said Abate. “Unfortunately this will mean the closing of 27 underperforming stores throughout the country which are not strategically aligned with the going-concern business.”
According to the bankruptcy filing, Ashley Stewart has assets and liabilities each between $10 million and $50 million. Its top creditors include Federal Express Corp., which is owed $824,700; By Design LLC, which is owed $737,102; and Les Vetements Multiwear Inc., which is owed $526,621.
Founded in 1991, Ashley Steward was purchased in 2010 by a private equity affiliate of Gordon Brothers Group.