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% of its secured term debt and 89% 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% of Nine West’s sales come from wholesale distribution and sales to department stores and off-price retail.
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