Perfumania has announced a recapitalization that will include the reduction of its retail stores to better suit consumer shopping patterns, increase investments in its e-commerce business and become a privately-held company.
In order to put the plan into action, the company has voluntarily filed for Chapter 11 relief in United States Bankruptcy Court for the District of Delaware. However, it states that it will continue to operate business as usual during this time.
President and CEO, Michael Katz, said, "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...This process will allow us to more quickly adapt to the shift in consumer shopping habits by focusing more of our resources on implementing our e-commerce strategy, making Perfumania a stronger and more competitive company.”
Katz continued, "The company has been working diligently to amend its business model, reduce its cost structure, improve supply chain efficiency, optimize marketing, reduce expenses and improve operating results long-term. Today’s actions allow the company to expedite all of these initiatives to create a stronger company with the financial resources to invest in areas that will foster our long-term growth. The support of our lenders and the new DIP and exit financing commitments underscore their confidence in the future of the company.”