Christopher & Banks files for bankruptcy
Women’s clothing chain Christopher & Banks Corp. has filed for bankruptcy and said it will close “a significant portion, if not all” of its 449 stores, including its retail outlets at Northgate Mall in Hixson and at the Calhoun Premium Outlets in Calhoun, Georgia.
Christopher & Banks joins a growing list of retailers filing for bankruptcy and disappearing from America’s malls amid the ongoing coronavirus pandemic, including J.C. Penney, Lord & Taylor, Brooks Brothers, J. Crew and Pier One, which all filed for bankruptcy last year.
“Despite the tremendous advancements we have made in executing our strategic plan, due to the financial distress resulting from the pandemic and its ongoing impact, we elected to initiate this process and pursue a potential sale of the business in whole or in part to position the company for the future,”
Keri Jones, CEO of Christopher & Banks, said in a statement announcing the store liquidations.
The women’s wear company filed for Chapter 11 on Thursday and said it has begun selling off merchandise at most of its stores at a 40% to 60% discount from original prices, including its 3,500-square-foot store at Northgate Mall. Christopher & Banks said it is in an “active discussion” to sell its website but may not continue as a brickand-mortar retail chain.
Christopher & Banks, a Minneapolis-based retailer that started as Braun’s Fashions in 1956, reported last month it lost $10.8 million, or 29 cents a share, in its third quarter ended Oct. 31. Sales decreased by nearly 23% to $72.8 million in the quarter compared with the same time last year.
The company, which has reported losses in each of the past five years, began working last fall with external advisers, including investment-banking
firm B. Riley Securities Inc., to consider different options including selling the company or seeking bankruptcy protection. In May, the company took a loan between $5 million to $10 million from the Paycheck Protection Program, according to SBA records.
Before the pandemic, the retailer had enjoyed a brief rebound in sales under Jones, a former Target executive who was named CEO of Christopher & Banks in 2018. In late 2019, Christopher & Banks posted its first quarterly profit in three years after it made several changes to expand its e-commerce platform and improve the customer shopping experience in its stores.
But last March, Christopher & Banks, like many retailers, was forced to temporarily close many of its stores due to the pandemic. With the closings, the store later reported net sales fell nearly 52% last spring, and the company was forced to dip into its cash and credit reserves to keep operating.
Christopher & Banks said in its most recent earnings report that COVID-19 had disrupted shopping habits for women who shop at stores that offer more formal attire. Consumers have become for more focused on leisurewear instead of more formal outfits for social engagements or work with fewer events and more people working from home.
As a result, Coresight Research estimates that more than 8,700 stores closed in 2020 and another 1,400 have already closed this year.
Among the major creditors listed in Christopher & Banks’ bankruptcy filing is the Chattanooga-based CBL Properties, which operates 108 malls and other retail properties across the country where Christopher & Banks operates some of its stores.
Christopher and Banks said it owed CBL $621,040.81 in unsecured claims at the time of its bankruptcy filing. Stacey Keating, senior director of corporate communications at CBL, said Christopher & Banks and its CJ Banks operate 32 stores at CBL properties.
“We are in discussions with the company and don’t yet know how many or which of the locations will ultimately close,” Keating said.”We have been monitoring the status of this retailer, and so the news of the bankruptcy filing did not come as a surprise. Our leasing team is always working to identify new and creative uses to bring into our centers.”
With the closing of the Northgate Christopher & Banks store, nearly half of the 820,000-squarefoot Northgate Mall is currently vacant, including two of the original anchors at the 48-year-old mall — JCPenney’s which closed in 2014 and Sears which closed in 2018. Last year, Victoria’s Secret, PINK, Children’s Place, Catherines and Justice stores also closed at Northgate.