Discount perfume chain, Perfumania, filed for Chapter 11 bankruptcy protection on Saturday, August 26, citing declining mall traffic as the reason for its financial woes. The company plans to close 64 stores as part of its restructuring strategy, which is in addition to the 103 stores it announced were closing in 2015. The final result of its restructuring is one in which the CEO Michael Katz says he sees “a viable path forward.” Frequent customers of Perfumania can expect online operations to continue as usual.
$199 million in debt, Perfumania was marked earlier this year as one of the companies most likely to declare bankruptcy in 2017. CEO Katz said in a prepared statement:
Our employees can be assured that during this time and beyond they will continue to receive their salaries and benefits. Our retail customers can continue to purchase the brands they love at our stores and online, and our wholesale and retail customers will not see any interruption in the flow of merchandise. There will be no changes to our license agreements and we will continue to uphold our obligations, and our valued vendors and suppliers will be paid in full.”
Perfumania joins the over 300 retailers who have filed for bankruptcy this year and is the 16th major retailer, joining the ranks of Gymboree, Gander Mountain and Rue21. The company intends to focus its efforts into building a better digital presence, keeping up with the increasing number of customers who prefer to shop online. With hope on the horizon and a decent plan for digging its way out, it appears Perfumania might be one of the better off bankruptcies of 2017. The company still plans to keep a brick-and-mortar presence in malls, unlike several of its similarly suffering counterparts that have closed all their stores, like Bebe and The Limited.