Where did dELiA*s
go wrong? My daughter loves this fashion
retailer. How could they possibly go out
of business? Please add your comments at
the bottom of this page.
Here are the two news releases leading to the end.
December
8, 2014 – Bankruptcy News
dELiA*s, Inc.
(NASDAQ:DLIA), an omni-channel retail company primarily marketing to teenage
girls, announced on December 8, 2014 that it, along with certain of its
subsidiaries (collectively, the “Company”), has filed voluntary petitions for relief
under Chapter 11 of the United States Bankruptcy Code in the United States
Bankruptcy Court for the Southern District of New York in White
Plains, NY (the “Bankruptcy Court”) on December 7, 2014.
The Company will continue to manage its properties and operate its businesses
as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court
and in accordance with the applicable provisions of the Bankruptcy Code and the
orders of the Bankruptcy Court.
As previously
announced on December 5, 2014, after exploring strategic
alternatives to raise financing and/or engage in a sale, merger, or other form
of business combination, the Company’s Board of Directors concluded that it was
in the best interests of the Company’s stakeholders to close its retail stores
and liquidate its assets, that it had entered into an agency agreement with Hilco
Merchant Resources, LLC and Gordon Brothers Retail Partners, LLC,
to among other things, liquidate all merchandise owned by the Company and to
dispose of certain furnishings, trade fixtures, equipment and improvements to
real property with respect to the Company’s stores, and that it would commence
a bankruptcy case to seek approval to conduct store closing and going out of
business sales pursuant to the Agency Agreement.
In connection
with the bankruptcy filing, the Company is seeking customary authority from the
Bankruptcy Court that will enable it to continue to operate and
serve its customers during an orderly wind down of the business. The requested
approvals include requests for the authority to make wage and salary payments,
continue various benefits for employees, as well as honor certain customer
programs for a limited time, such as gift cards and returns on merchandise
purchased prior to the bankruptcy filing. All sales are final on merchandise
purchased during the liquidation.
In addition,
the Company has negotiated a commitment for a $20 million debtor
in possession (“DIP”) credit facility with Salus Capital Partners, LLC,
which provides for immediate liquidity to continue operations and to conduct
the store closing and going out of business sales while in bankruptcy. The DIP
credit facility is subject to Bankruptcy Court approval and the
satisfaction of specified closing conditions. The DIP credit facility would
subsume all of the Company’s obligations under its existing credit agreement
with Salus, which has approximately $18.5 million outstanding as
of the date hereof.
The Company
currently anticipates that some recovery will be available to general unsecured
creditors in the bankruptcy cases, but does not currently anticipate that any
value will be available to holders of the Company’s common and preferred
equity, although this will be determined upon the conclusion of the bankruptcy
cases.
On December
5, 2014, Tracy Gardner, Chief Executive Officer and a
director, and Brian Lex Austin-Gemas, Chief Operating Officer,
resigned from their respective positions effective immediately. As of such
date, Ryan Schreiber was appointed as President and will
continue in his capacity as General Counsel and Secretary, and Edward
Brennan was appointed as Chief Financial Officer, having previously
served as the Company’s Vice President of Finance.
Additional
Information
The Company’s
bankruptcy cases are pending in the Bankruptcy Court and styled, In
re dELiA*s, Inc., et.
al, Case No. 14-23678 (RDD) (Bankr. S.D.N.Y.). Additional information
regarding the Company’s bankruptcy cases, along with pleadings and documents
filed on the bankruptcy case docket, are publicly available online for free at
the Company’s claims and noticing agent’s website at https://cases.primeclerk.com/delias.
December 5, 2014 – Liquidation News
dELiA*s, Inc. (NASDAQ:DLIA), an omni-channel retail company primarily marketing to teenage
girls, announced on December 5th, 2014 that it entered into an
agency agreement with Hilco Merchant Resources, LLC and Gordon Brothers Retail
Partners, LLC, dated December 4, 2014, to, among other things, liquidate all merchandise owned
by the Company and to dispose of certain furnishings, trade fixtures, equipment
and improvements to real property with respect to the Company’s stores. Sales
of merchandise under the agreement may begin as early as December 5, 2014.
The Company anticipates that it will file for Chapter 11 bankruptcy protection in the very near term and will
seek, among other things, the bankruptcy court’s approval to close all existing
stores and distribution centers and to conduct store closing and going out of
business sales. The Company determined to take this action after being unable
to find a merger partner, or obtain an acquisition or financing proposal
enabling the Company to remain a going-concern. The Company will provide more
details in the near term about the plans for the Company’s bankruptcy
proceedings, the liquidation of the stores and other assets, the status of the
Company’s operations during bankruptcy, and the terms of the agency agreement.
The Company does not
anticipate any value will remain from the bankruptcy estate for the holders of
the Company’s common and preferred equity, although this will be determined in
the anticipated bankruptcy proceedings.
About dELiA*s,
Inc.
dELiA*s,
Inc. is an omni-channel retail company primarily marketing to teenage
girls. It generates revenue by selling apparel, accessories and footwear to
consumers through its website, direct mail catalogs and mall-based retail
stores.
Thank you for taking the time to read our fashion industry news blog post. We hope that you have found this news to be informative. If you have comments or questions, please add your thoughts in the discussion area below.