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01/08/2021

Christopher & Banks discloses multiple defaults

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Christopher & Banks’ troubles are mounting.

In December, the struggling women’s apparel retailer issued a “going concern” warning and said it was reviewing its options, including bankruptcy or a sale of the company. In an SEC filing on Thursday, Christopher & Banks disclosed on Thursday several defaults earlier this month on financial obligations, including key loans and the lease on its headquarters, which is located in the Minneapolis area.

The retailer stated in the filing that it has received notices of default on a term loan, secured vendor program, credit facility and the lease on its corporate headquarters. Christopher & Banks said it could face eviction from the headquarters as a result of unpaid rent. 

“The company, working with its strategic, financial and legal advisors, is currently evaluating the assertions contained in the foregoing notices of default and reservation of rights, and it is negotiating with ALCC {the retailer’s term loan lender], Wells Fargo and the landlord to resolve the company’s outstanding obligations,” Christopher & Banks stated in the filing. 

Christopher & Banks, which operates about 450 stores, posted a 22.6% sales decline in its third quarter along with a net loss of $10.8 million.  

"We have not seen the level of sales recovery that we had anticipated," Keri Jones, CEO, stated in the company’s third-quarter earnings release. "We believe that COVID has had an outsized impact on our customer demographic as her shopping behavior is more pragmatic with limited demand for new outfits in the absence of social engagements. In addition, based on our own retail traffic trends we believe she remains hesitant to shop in stores.”