Beleaguered women’s retailer Christopher & Banks has begun to lay off more than 350 corporate employees at its Plymouth headquarters and distribution center as it works to close its stores as part of its bankruptcy proceedings.
Christopher & Banks began layoffs on Jan. 15, a day after the retailer announced it filed for Chapter 11 bankruptcy protection and began liquidation sales. Layoffs will finish around early to mid March with a full business closure, according to the Minnesota Department of Employment and Economic Development (DEED), which was notified by Christopher & Banks executives.
“In particular, the company has experienced, and continues to experience, liquidity constraints as a result of the COVID-19 pandemic,” said Keri Jones, CEO of Christopher & Banks, in a letter to DEED. “Although the company has been attempting to attract new investors and financing to maintain its business operations, the company was unable to obtain the required capital, and the company’s current cash position is such that the company has insufficient funds to maintain its business operations.”
Christopher & Banks’ notification to the state was of the permanent closure of the company headquarters facility in Plymouth and termination of 361 employees there.
Already, the retailer is running closing sales at each of Christopher & Banks’ nearly 450 stores that will ultimately result in the termination of store-level employees, according to its bankruptcy filings. Each of the closing sales is scheduled to be completed as soon as possible and run no later than Feb. 28 unless otherwise agreed upon. As of the petition date, Christopher & Banks employed nearly 3,000 employees.
The women’s apparel store has reported for months that it was in trouble. Last month, Christopher & Banks reported it lost $10.8 million, or 29 cents a share, in its third quarter ended Oct. 31.
Though Christopher & Banks has seen growth in online sales, the chain’s revenue is highly dependent on in-store sales, which for the fiscal year 2019 accounted for over 75% of its net sales, according to court filings.
“The debtors are the latest victims of the retail apocalypse that was first created by a customer migration away from brick-and-mortar stores and most recently, the COVID-19 pandemic,” Jones said, in a filing in support of the bankruptcy. “The COVID-19 pandemic was the proverbial ‘nail in the coffin’ for the debtors following years of adverse market trends, including the shifting of sales from traditional brick-and-mortar retailers to online sellers, increased competition from big-box retailers, and changing consumer preferences.”
Christopher & Banks had to suspend rental payments to landlords in November which resulted in the retailer receiving numerous notices of default and was even locked out of its stores in Boise and Idaho Falls for nonpayment on rent. The holiday season didn’t give Christopher & Banks much relief with holiday sales affected by customers’ limited demand for new outfits in the absence of social engagements.
Nicole Norfleet • 612-673-4495
Twitter: @nicolenorfleet