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Law360 (January 14, 2021, 11:21 AM EST ) Women's apparel company Christopher & Banks Corp. said Thursday the COVID-19 pandemic has driven it to Chapter 11, and that it plans to close most of its brick-and-mortar stores but will continue its e-commerce operations.
The Minneapolis-based company and two affiliates filed their petitions in New Jersey bankruptcy court late Wednesday. Christopher & Banks estimated its assets at $166 million and its liabilities at $105.6 million.
The company plans to close "a significant portion, if not all," of its physical retail stores, and a store closing and liquidation process is underway, Thursday's announcement said. Christopher & Banks currently operates 449 retail stores in 44 states, according to court filings. The retailer said it is also in discussions with potential buyers for its e-commerce platform.
Christopher & Banks signaled that such a move could be in the works in December, when it announced it was exploring its options and doubted its ability to survive 2021.
CEO Keri Jones said the COVID-19 pandemic pushed the company into Chapter 11.
"Due to the financial distress resulting from the pandemic and its ongoing impact, we elected to initiate this process and pursue a potential sale of the business in whole or in part to position the company for the future," Jones said in a statement Thursday.
Jones said in first-day declarations that before the pandemic hit, the company had already been grappling with trends affecting many retailers, such as the shift away from brick-and-mortar stores.
"The COVID-19 pandemic was the proverbial 'nail in the coffin' for the debtors following years of adverse market trends, including the shifting of sales from traditional brick-and-mortar retailers to online sellers, increased competition from big-box retailers, and changing consumer preferences," Jones said.
Christopher & Banks' secured debt stems from a revolving credit facility, a term loan and vendor financing, Jones' declarations said. The company also took out a $10 million loan through the Paycheck Protection Program, part of the federal government's pandemic relief package, court filings show.
A number of retailers have sought Chapter 11 protection in recent months, including women's clothing boutique chain Francesca's, which filed for bankruptcy in December; musical instrument retailer Guitar Center, which filed in November; and the parent company of retailer Furniture Factory Outlet, which hit Chapter 11 in early November.
A representative for Christopher & Banks did not immediately respond to a request for comment Thursday.
Christopher & Banks is represented by Michael D. Sirota, Felice R. Yudkin, Jacob S. Frumkin, Matteo Percontino and Rebecca W. Hollander of Cole Schotz PC.
The case is In re: 21-10269, in the U.S. Bankruptcy Court for the District of New Jersey.
--Additional reporting by Jeff Montgomery and Rick Archer. Editing by Marygrace Murphy.
Update: This story has been updated with additional information.
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