The American teen retailer Delia’s has announced that it will liquidate all of its stores and file for Chapter 11 bankruptcy protection. There are six types of bankruptcy in Title 11 of the United States Code. Chapter 11 is known as corporate bankruptcy.
The New York based company, which was once extremely popular, has not posted an annual profit in over 5 years.
It is now one of the many struggling American retailers that focus on teenagers, along with Abercrombie & Fitch and Aeropostale.
In September the company said it was looking for a potential buyer or find a strategic partner.
After news that it filed for bankruptcy made the news its shares fell by more than 85% to less than one cent per share.
Delia’s told shareholders it “does not anticipate any value will remain from the bankruptcy estate”.
Former Delia’s CEO Walter Killough told BuzzFeed:
“It looks like Delia’s is just another small company, in the teen space, that did not have the store and e-commerce productivity to absorb the revolutionary changes that are going on in the shopping patterns of the teen shopper.”
The company was formed by two Yale graduates in 1993 and became extremely popular because of its strategy of marketing to teenage girls through its catalogue and lifestyle website, gURL.com – bought out by Seventeen magazine.
In February, Delia’s had 499 full-time and 1,190 part-time employees, according to filings with the Securities and Exchange Commission.
Delia’s has 95 stores and also sells its products online and through its mail-order catalogue.
In its prime it Delia’s was the leading marketer to teenage girls in the United States, mainly targeting 10-24-year-old females.