- Sara Ehlers |
Texas-based retailer A'GACI, LLC, filed for Chapter 11. The company sought court approval to close up to 49 of its 76 operating stores.
The company is still planning to begin discussions with landlords regarding 49 of its locations. The store that were court-approved to close are still pending, due to the company's management team. Some of A'GACI's advisors are still continuing to evaluate whether or not these stores should remain open.
"The actual number of store closings will depend on our ability to work with landlords for many of our locations to negotiate more favorable lease terms and rent reductions," said David Won, A'GACI's Chief Merchandising Officer, in a statement.
A'GACI attempts restructuring plan after Chapter 11 filing
A'GACI is making steps to move towards store evaluation and landlord negotiations in order to know the company's restructuring plan moving forward. Currently, the A'GACI and its advisors estimate that lease costs at approximately 2/3 of its locations are "unfavorably high," according to a press release by the company.
"Although we are operating – like many retailers – in a challenging environment, we have excellent employee teams in our stores, a loyal customer base and very strong relationships with our vendors. We are especially excited about next season's fashion which we have begun to roll out at a number of stores. If we can meaningfully improve our rent costs, it is possible that we will keep a large number of stores open," Won said in a statement.
The company is planing to restructuring and prevail, according to chief executive officer John Won. "By filing for Chapter 11 and entering into negotiations with landlords, we believe we will be able to address our overall cost structure which is not sustainable given the current retail environment. The results of this action, combined with our strong store base and online presence, will allow A'GACI to emerge as a more competitive player in the fashion industry," John Won said in a press release.
As A'GACI has been around for years, the company currently operates 78 stores in the U.S. including 37 locations in Texas. For the fast-fashion retailer's future, only time will tell if the restructuring plan will be enough to settle its financial issues.
Photo: A'GACI / www.agacistore.com