A’gaci, a women’s fashion retailer, is filing for Chapter 11 bankruptcy, and intends to close all of its 54 stores.The retailer has received approval to conduct “going out of business” sales beginning Aug. 8, according to court documents. A’gaci said it expects the bulk of store closings to be completed by Aug. 31 and already has shuttered its e-Commerce site. Sales made before Aug. 1 will be eligible for in-store returns until Aug. 30.
The bankruptcy and store closure announcements came a week after A’gaci had to lock 12 of its Texas locations after failing to pay delinquent rent at these stores. The retailer is seeking an “automatic stay,” which would prohibit landlords from taking control over the property or obtaining inventory within the locations, and allow the retailer to continue operations until their official closing date.
This is the San Antonio-based retailer’s second bankruptcy filing in two years. A’gaci filed for Chapter 11 bankruptcy protection in January 2018 after an ill-timed brick-and-mortar expansion of 21 new stores, peaking at 76 locations.
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The first bankruptcy echoed those of several other apparel and specialty retailers, including Payless, Gymboree, BCBG Max Azria, True Religion and rue21. All these retailers entered Chapter 11 in 2017 and exited during the year with a downsized business and a smaller debt load.
Under the first bankruptcy, A’gaci trimmed its footprint back again by 20 stores — fewer than half of the 49 stores it originally intended to shutter as part of its restructuring plan. The retailer’s plan at the time involved switching its focus toward expanding digital sales, saying it expected e-Commerce sales to rise 35% in 2019 and 25% in 2020.
However, like Payless and Gymboree, A’gaci’s attempt at digital transformation proved to be too little, too late; the company couldn’t stave off bankruptcy for the second time.
