As the U.S. apparel sector struggles with increasing competition, changing tastes of consumers plus lower spending of teenager shoppers, Cache Inc. was forced to file bankruptcy on Friday in Delaware. This is the latest of a string of mall-based retailers which seek to liquidate or restructure through the protection of the courts.
The retailer stated last Wednesday that it was looking for a ‘stalking horse’ bidder of its assets and it received commitment from Salus Capital Partners LLC for debtor-in-possession financing which amounts to $22 million.
Cache listed payables of $50 million to $100 million and it listed assets of around $10 million to $50 million.
Back in December of 2014, the company stated that it was looking at strategic alternatives and it did receive an inquiry about a potential acquirement from another company.
Cache hasn’t reported a profit since 2011 and in 2012 it recorded a loss that amounted to $12.1 million. This even increased in the fiscal 2013 when it recorded losses of $34.4 million based on the filings.
According to the official website of U.S. apparel retailer, it has been in the business for 40 years already and it was the first to bring brands like Armani and Versace to the country.
The company blamed the depressed market to the budding online shopping and the quickly shifting tastes of consumers which was stated in its Chapter 11 filing.
Cache Inc. is just one of the many teen apparel retailers that struggled with the switching fashion brands of teenage shoppers like Forever 21, H&M and Zara.
Other teen apparel retailers that have already filed bankruptcy include Delias*s Inc. which shut shop back in December of last year and Body Central Corp. which did so last month. Wet Seal, a shop selling accessories and apparel for teenage girls and young women also filed bankruptcy protection last January and the reasons of these companies are more are less the same with that of Cache’s.