Retailer Nine West Files for Bankruptcy, Will Close All 70 Stores
NEW YORK CITY — Nine West Holdings Inc., a New York-based women’s shoe and apparel wholesaler, has filed for bankruptcy after accumulating $1.6 billion in debt. As a result, the company plans to close all 70 of its brick-and-mortar retail stores.
The company joins Toys ‘R’ Us, The Walking Company, Bon-Ton and Claire’s as prominent retailers to file for bankruptcy in the last year.
An unidentified lender has provided $300 million in debtor-in-possession financing. The company also entered into a restructuring support agreement with the holders of 78 percent of its secured term debt and 89 percent of its unsecured term debt. The loan and agreement will allow the Nine West to remain an ongoing wholesale entity during bankruptcy proceedings.
More than 80 percent of Nine West’s sales come from wholesale distribution and sales to department stores and off-price retail
“This is the right step to address our two divergent business profiles,” says Ralph Schipani, Nine West Holdings’ Chief Executive Officer. “We will retain our strong, profitable and growing apparel, jewelry and jeanswear businesses, and continue to operate them under a new capital structure so that we can leverage their existing strengths to drive even greater growth.”
“Once we complete the reorganization process, our company will have meaningfully reduced debt and interest costs and be well positioned for the future,” concludes Schipani.
Nine West hopes to gain approval in bankruptcy court to sell its brands to Authentic Brands Group LLC for $200 million. If approved, the company will shutter its existing retail store operations. In fiscal 2017, the brick-and-mortar stores posted just $125 million of the company’s $1.6 billion in total revenue.
News of the store closures hit two publicly traded retail landlords the hardest. Simon Property Group will lose 35 stores while Tanger Factory Outlet Centers will lose 19. Neither company listed Nine West among its 10 largest tenants.
— David Cohen