Mall-based apparel retailer Body Central said to prepare for bankruptcy: report

[January 08, 2015]  (Reuters) - Mall-based apparel retailer Body Central Corp is preparing a bankruptcy filing that could come within the next week, Bloomberg reported, citing people familiar with the matter.

The Jacksonville, Florida-based company is working with the accounting and consulting firm Richter, Bloomberg said, quoting people familiar with the matter as saying.

Body Central, which said earlier on Wednesday that it was facing “significant liquidity challenges,” received a notice of default on $18 million in debt and is assessing strategic alternatives.

The retailer is in talks to procure additional financing, which could help with a reorganization after bankruptcy, Bloomberg reported, citing another person familiar with the matter. (http://bloom.bg/1xGQm7e)

The company ceased trading on the Nasdaq in July last year.
 

Body Central, which was founded in 1972, operates stores under the Body Central and Body Shop banners and caters to women in their late teens and twenties.

Several teen apparel retailers have been losing market share to fast-fashion brands such as H&M, Forever 21 and Inditex's Zara, which bring the latest styles from the runway to their stores within weeks.

Delia*s had warned on Friday it was liquidating assets and would file for Chapter 11 bankruptcy protection "in the very near term, " sending its shares down 84 percent.

Teen and young women's fashion chain Deb Shops, which is controlled by private equity firm Cerberus Capital Management, filed for its second bankruptcy in less than four years on Thursday and said it would seek a buyer.

Struggling apparel retailer Wet Seal Inc, which last month warned that it could file for bankruptcy protection if it failed to meet immediate liquidity needs, said on Wednesday that it laid off about 3,700 full- and part-time employees as it closed 338 stores.

Body Central and Richter were not immediately available for comment after regular business hours.

(Reporting By Sudarshan Varadhan; Editing by Bernard Orr)

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