July 16 (Bloomberg) -- Love Culture Inc., an 80-store clothing chain for young women and girls, became the latest womenswear retailer to seek bankruptcy protection.
The past several months have been rough for women’s apparel retailers as still-cautious consumers pared spending. Coldwater Creek Inc., Dots LLC, Ashley Stewart Holdings Inc. and Loehmann’s Holdings Inc. all filed for bankruptcy protection since late last year.
“This process will allow us to close underperforming stores while we focus our attention on improving performance in our remaining store base and e-commerce,” Rick Bunka, chief restructuring officer of Love Culture, said in a statement.
The company owes General Growth Properties Inc., the second-biggest U.S. shopping-mall owner, $3.9 million on unsecured obligations for store leases. It also owes landlords Simon Property Group Inc., the world’s largest mall owner, about $2 million and a Taubman Centers Inc. affiliate about $1.2 million, court papers show.
Kenneth A. Rosen, a lawyer for Love Culture, didn’t immediately respond to an e-mail seeking details on the proposed sale or store closings. David Keating, a spokesman for General Growth, declined to comment on the leases.
Love Culture is entertaining various scenarios that include selling almost all its assets as a viable business, according to the statement. The retailer said it received “several” letters of intent from other merchants as well as investors.
Coldwater Creek and Dots were forced to liquidate their entire chains, while Ashley Stewart used bankruptcy to shutter some of its stores.
Love Culture faced “financial difficulties” in 2012 as it expanded the chain while cash flow dwindled from capital investments in its online business, according to the statement.
The retailer plans to seek court approval of a bankruptcy loan from Salus Capital Partners LLC to help fund operations as it pursues a sale, according to court documents. The amount wasn’t immediately disclosed in available court filings.
Love Culture was founded in 2007 by Jai Rhee and Bennett Koo, former executives at retailer Forever 21, to sell affordable clothes and accessories to young women, according to its website. In 2010, the company started an online store. Two years later, it started the upscale Boutique Culture line.
The company filed for Chapter 11 protection today in Newark, New Jersey, listing assets and liabilities of as much as $50 million each.
The case is In re Love Culture Inc., 14-bk-24508, U.S. Bankruptcy Court, District of New Jersey (Newark).
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