Women's fashion retailer A'gaci on Wednesday filed under Chapter 11 in the United States Bankruptcy Court for the Western District of Texas San Antonio Division, with the intention to "close and wind down all of its brick and mortar store locations." As of Wednesday, the retailer operated 54 retail stores, according to court documents.
The retailer has received approval to conduct "going out of business" sales beginning Aug. 8, according to court documents. A'gaci said it expects the bulk of store closings to be completed by Aug. 31.
The filing marks the San Antonio-based retailer's second bankruptcy. A'gaci filed for Chapter 11 bankruptcy protection in January 2018.
Just over one year after exiting Chapter 11, A'gaci finds itself in bankruptcy court again.
When the retailer filed for bankruptcy protection in January 2018, it planned on emerging with 49 fewer stores, nearly 65% of its total footprint. In reality, when A'gaci exited bankruptcy six months later, it trimmed its footprint by just 20 stores. The retailer's plan at the time also called for a focus on an expansion of its digital sales, saying it expected comparable e-commerce sales to rise 35% in 2019 and 25% in 2020.
This time around is different. The company already shut down its e-commerce business and is now prepping to close all of its stores in the coming weeks.
This comes as social media users buzzed about notices and locked doors at several of the retailer's physical stores. The social media posts included pictures of letters showing the company had failed to pay delinquent rent at these locations.
In A'gaci's Wednesday filing, it indicated that those notices were posted on July 31 on the doors of 12 of its locations, all in Texas, including at The Domain, Katy Mills and Barton Creek. The retailer seeks an "automatic stay," which would prohibit landlords from taking control over the property or obtaining inventory within the locations, according to the court documents, and allow the retailer to continue operations for the time being.
The retailer entered into a consulting agreement with SB360 Capital Partners, LLC and Hilco Merchant Resources, LLC on July 26. Both companies offer services including liquidation assistance.
On Feb. 4, Sierra Constellation Partners (SCP), led by Thomas Lynch, was hired to serve as financial adviser to the company.
The retailer seeks the approval of a $10 million senior secured asset-based loan provided by the lenders, according to Lynch. The company as of Wednesday had outstanding debt of "not less than $6,099,123.62," he added.