Fragrance retailer Perfumania files for bankruptcy protection
US-based omnichannel fragrance retailer Perfumania Holdings has filed for protection under Chapter 11 in the US Bankruptcy Court for the District of Delaware.
Following the petition, Perfumania intends to proceed with a pre-packaged reorganisation plan that will enable it to optimise its retail store footprint and shift focus to e-commerce business through enhanced investments.
The move is also directed at becoming a private company.
Perfumania Holdings president and CEO Michael Katz said: “This process will allow us to more quickly adapt to the shift in consumer shopping habits by focusing more of our resources on implementing our e-commerce strategy, making Perfumania a stronger and more competitive company.”
The company noted that the bankruptcy filing will not affect its business operations and will continue to pay salaries to employees and make vendor payments.
Under the reorganisation programme, the company plans to go for equity investment to pay shareholders and fund ongoing operations.
It has also reached an agreement for up to around $84m in debtor-in-possession financing from existing lender Wells Fargo.
Katz added: “The company has been working diligently to amend its business model, reduce its cost structure, improve supply chain efficiency, optimise marketing, reduce expenses and improve operating results long-term.
“Today’s actions allow the company to expedite all of these initiatives to create a stronger company with the financial resources to invest in areas that will foster our long-term growth.”
As of July this year, Perfumania operated 230 retail stores across the US, Puerto Rico and the US Virgin Islands.