The women’s business filed with Chapter 11 on Thursday due to ‘financial distress due to the pandemic and its ongoing impact’. Christopher & Banks, which has about 400 establishments in 44 states, said it would close a “significant portion” of stores and is in an “active discussion” to sell its website.
The bankruptcy was predicted last year when the company announced it was hiring an investment banker to refinance its debt and ‘explore other strategic alternatives’. In May, the company took out a $ 5 million and $ 10 million loan from the Paycheck Protection Program, according to CNN Business’ database.
Christopher & Banks acknowledged in its most recent revenue issue that Covid-19 has disrupted shopping habits especially for women doing shopping that offers more formal attire. They have become more pragmatic shopping, the company said, preferring casual wear instead of social event outfits.
It is certainly not alone. Other retailers cited similar reasons in their bankruptcy filing last year. Ascena Retail Group, owner of Ann Taylor, Loft and Lane Bryant, said its business was “severely disrupted” by the pandemic and closed hundreds of stores. RTW Retailwinds, owner of New York & Co., also closed most stores.
With the move to work from home, buying work clothes is out of fashion, endangering the future of companies that depend on office clothes. New data from Coresight Research reveals that more than 8,700 stores closed in 2020 and another 1,400 will close this year alone.