It is not uncommon for a Texas company to resort to Chapter 11 bankruptcy when it is irreparably deep in debt. In a recent development a well-known national company that caters to teens has filed for Chapter 11 bankruptcy protection and also wants to sell all of its merchandise and close its operations.
Delia's, the retail chain, has stated that the Chapter 11 filing came after the owners could not find anyone willing to buy the business. Reportedly, the company has assets worth $74 million and $32.2 million worth of debt. Recently, the company entered a deal with two other retail businesses to buy all of its products and merchandise. The businesses have also bought the company's equipment and furnishings.
The CEO and the Chief Operating Officer of the company resigned following the sale. The retail company has 92 stores spread out in shopping complexes across the United States. The shares of the retail business fell to less than two cents recently. The recession is apparently to blame for the fate of several companies catering to teenagers, where their sales have also plummeted.
Surveys show that there has been a significant reduction in sales in 2014 and even holiday sales have been poor. Sales around Black Friday dropped by 7 percent, and Thanksgiving shopping fell around 5 percent. The shares of company stock of some of the most renowned retailers have also fallen drastically. In one case, the shares of a popular retail business fell by a whopping 73 percent in the last year.
Source: ABC News, "Delia's, Casualty of Retail Slump, to Liquidate," Dec. 8, 2014