Teen apparel and fashion retailers have had a rough stretch over the past few years: brands such as Aéropostale, American Apparel, Wet Seal, Delia’s, Pac Sun and Rue21 all have filed for bankruptcy during this period. Just ahead of the 2017 holiday season, Styles For Less is the latest addition to the list.
Styles For Less had liabilities between $10 million and $50 million, according to the bankruptcy filing.The retailer plans to reorganize its debt during the bankruptcy, and was seeking a loan to fund it through the process, Reuters reported. The company listed wholesale suppliers such as Vivace and Ambiance among its biggest creditors.
Like many of its counterparts, Styles For Less has suffered from declining store traffic, particularly in malls. Additionally, these companies have struggled to compete with Amazon, discounters such as TJ Maxx/Marshalls and Ross Stores, and fast fashion brands such as H&M, Zara and Forever21.
The timing of the filing is significant, since retailers tend to avoid filing for bankruptcy ahead of the holiday season so that they can take advantage of peak revenue and build up cash for the next year.
It is unknown exactly how Styles For Less plans to reorganize. The company has more than 160 mall and outlet stores, so it’s likely that the company will close unprofitable locations. Whatever decision it makes, the retailer must address the desires and tendencies of mobile-savvy Gen Z shoppers, who generate $44 billion in buying power.