NEW YORK - Women's clothing retailer Cache (CACH) has filed for Chapter 11 bankruptcy protection after running out of time and money to complete a turnaround.
The New York company said Wednesday that it will keep running its business, but it also will continue to close stores and sell or renegotiate some of its leases. Cache sells dresses, sportswear and accessories and runs 218 stores, or 20 fewer than it operated in December.
The retailer has secured up to $22 million in financing from Salus Capital Partners to keep operating during the bankruptcy proceeding. That financing is subject to court approval.
It also will seek a so-called stalking horse buyer for its assets. That involves a potential buyer making an initial offer to set the floor for an auction that invites competitive bids.
"We believe that this action provides (Cache) the greatest opportunity to secure a strategic partner while maximizing recovery to our stakeholders," Chairman and CEO Jay Margolis said in a statement from the company.
Cache said in December that its board had decided to explore strategic alternatives that include a possible merger or sale. It also said it had received an inquiry about a potential sale, but no formal offers had been made.
The company had been focused on upgrading stores and closing unprofitable locations, among other business improvements. But it said challenges that included rapidly changing consumer tastes and the continued growth of online shopping "thwarted our efforts."
A Chapter 11 filing gives a company protection from creditor lawsuits while it reorganizes its finances.
Cache Inc. shares closed at 5 cents on Tuesday. The price slipped below a dollar last summer and has declined since then. The shares will be removed from the Nasdaq exchange, a move the company does not plan to appeal.