NEW YORK, N.Y. - Delia's is seeking Chapter 11 bankruptcy protection and plans to sell all its merchandise and shut down as teen retailers fall out of fashion with shoppers.
The company said Monday that it filed for bankruptcy after it failed to find a buyer for the business. Delia's said it has $74 million in assets and $32.2 million in debt.
Retailers, especially those that cater to teens, have been hit hard in the wake of the recession and almost all of them have posted lacklustre sales.
Black Friday sales this year tumbled 7 per cent this year. Overall, 133.7 million people shopped in stores and online over the four-day weekend around Thanksgiving, down 5.2 per cent from last year, according to a survey of 4,631 people conducted by Prosper Insights & Analytics for the trade group.
Americans are spending less at the mall and when they do spend, they're often doing so at fast-fashion stores like H&M and Forever 21.
Abercrombie & Fitch Co. and Aeropostale Inc. have been hammered this year and their shares have fallen 22 per cent and 73 per cent, respectively, over the past 12 months.
American Eagle Outfitters Inc. is down 20 per cent in that same time period and Urban Outfitters Inc. is down more than 13 per cent.
Last week, Delia's signed a deal with Hilco Merchant Resources, LLC and Gordon Brothers Retail Partners to liquidate its merchandise and dispose of its furnishings and equipment. CEO Tracy Gardner and Chief Operating Officer Brian Lex Austin-Gemas resigned on Friday.
Delia's Inc., based in New York, has 92 stores in malls around the country. Its shares fell below 2 cents in premarket trading Monday.