Anchor Blue Retail Group Inc., which operates teen apparel chain Anchor Blue, filed for Chapter 11 bankruptcy protection Wednesday, saying it would close dozens of stores and sell its outlet division.
In the filing, the company said it had reached an agreement to sell 73 of its Levi's & Dockers Outlet by Most stores to San Francisco-based Levi Strauss & Co., which offered an opening bid of $72 million.
A second transaction seeks to sell the company's namesake Anchor Blue stores to current management and a consortium of financial institutions.
Separately, about 50 Anchor Blue stores, including 15 in California, will close as part of the company's restructuring. None is in the Southland. Business will continue as usual at the remaining stores, the Ontario company said.
"The unprecedented, sustained economic downturn and a related drop in consumer spending, especially in the teenage market, have had a severe impact on our financial performance," Chief Executive Thomas Sands said in a statement. "After completing a detailed analysis of all our operations and conducting negotiations with a number of our landlords, we made the difficult but necessary decision to close approximately 50 underperforming Anchor Blue stores."
The company also blamed weakness in its key California market and a tightening of credit terms by its suppliers. Those problems led to pre-tax operating losses for the last three years, the company said.
The bankruptcy petition, filed in U.S. Bankruptcy Court in Delaware, listed assets of less than $50,000 and liabilities of $100 million to $500 million. Levi Strauss was listed as the largest unsecured creditor with a claim of $2.6 million.
Anchor Blue Retail Group operates 177 Anchor Blue stores in 12 states and 74 outlet stores in 31 states and Puerto Rico. The company employs about 2,800 people.