NEW YORK (AP) — Delia's said Friday that it plans to liquidate its stores and file for Chapter 11 bankruptcy protection.
The company has struggled with weak sales for years and has not reported an annual profit since 2007. It announced in September that it was conducting a strategic review and said Friday that it is making these moves after being unable to find a merger partner, or get an acquisition or financing proposal.
Delia's, like many other teen retailers, has failed to thrive in a changing retail environment. Teenage shoppers are going to the mall less and when they do, are opting to shop instead at fast-fashion stores like H&M and Forever 21.
The company is not alone in its troubles. Competitor Abercrombie & Fitch has tried to overhaul its business but reported earlier this week that its sales fell in its most recent quarter. And teen retailer Aeropostale Inc. announced this week that its third-quarter loss widened on weaker sales.
Delia's, based in New York, said that it has entered a deal with Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC to liquidate its merchandise, as well as dispose of certain furnishings, trade fixtures and equipment. Merchandise sales under the agreement may start as early as Friday.
The company that it plans to seek the bankruptcy court's approval to close all existing stores and distribution centers and to conduct store closing and going out of business sales.
Delia's had 95 stores at the end of its most recent quarter, which concluded in August. It also sells clothes, shoes and accessories through its website and a catalog business.
Shares of the company plunged 85 percent to 2 cents by midmorning. Its shares have lost nearly 89 percent of their value in the 12 months, based on Thursday's closing price.