Simply Fashion Stores Ltd. is a discount chain of women’s clothing that caters to women from urban areas and women of color. It filed for Chapter 11 bankruptcy protection in Miami on Thursday.
The family-owned company has 250 stores across the country in 25 states, including in major cities such as Detroit, Chicago, Ye Ole Fashion Nashville and Baltimore. Many of the chain’s leases were acquired by it through bankruptcy proceedings.
The company purchased the Dots bankrupt chain in August and reopened some stores to try to revive the business.
Simply Fashion was severely affected by the recession of 2009 and was in serious financial difficulties by 2012. However, the retailer closed 120 stores between 2012 and 2014, which may have been too late.
This retailer is now facing intense competition from general-merchandise shops like Target and Wal-Mart. They are expanding into urban areas and are proving their competitiveness after their recession-era woes. The owners of Simply Fashion are trying to loan the company funds in bankruptcy proceedings. However, the current plan is to liquidate.
Simply Fashion Files for Bankruptcy and Liquidate Chain
Simply Fashion Stores Ltd., a women’s clothing retailer, filed for bankruptcy protection Thursday. The company plans to liquidate. This is the latest in a long list of female retailers that have fallen on hard times over the past year.
Simply Fashion filed Chapter 11 at the U.S. Bankruptcy Court, Miami. The company has almost 250 stores across 25 states.
Family-owned and operated, the company was founded in 1991. It took advantage of retail bankruptcy fire sales to build its business. Simply Fashion was founded after it purchased 100 store leases from a bankrupt retailer selling clothing for $6 and less. In 1996 and 2005, it was able to acquire more leases through bankruptcy cases.
Simply Fashion licensed the intellectual property of Dots in 2014 and reopened 60 Dots shops.
Two of the company’s owners, Swapnil Shah & Shail Shah, owe $9 million in secured debt. It owes $400,000 to IberiaBank, $3.7million in general unsecured claims, and $9.9million in unsecured debt to insiders.
Simply Fashion, Dots Stores Kick Off Going-Out-of-Business Sales
Simply Fashion is the latest addition to the growing list of female-owned retailers that have closed in the last year.
The 243-store chain launched going-out-of-business sales Thursday, a few weeks after filing for chapter 11 bankruptcy protection. Simply Fashion, which has been in business for over 20 years, sells affordable accessories and shoes as well as lingerie to black women between 25-55. There are 25 stores, including in Detroit, Chicago, Nashville and Baltimore.
Going-out-of-business sales will also take place at Dots-branded stores. Dots went bankrupt last year. However, a new owner, the same one who also owns Simply bought Dots for less than $350,000. He then reopened some Dots stores. The revival was ultimately short-lived.