Dots LLC, the US-based fashion specialty apparel retailer with 420 stores located in 28 states, has filed for bankruptcy protection in order restructure and implement new strategies aimed at re-engaging its core customers.
The Company has USD 100 million in debt outstanding and would close its 36 "chronically underperforming" locations until it finds buyers for the remaining stores. It has secured USD 36 million in debtor-in-possession financing from Salus Capital to keeps remainder of its stores running.
As per WSJ, Dots’ Chief Executive Lisa Rhodes, in a written statement; said, “The filing is the best option available to restructure certain operations, preserve the business as a going concern and maximise the value of the enterprise by pursuing a sale. We are in the process of turning the business around, and the filing is another step toward doing that.”
Dots financial difficulties were further worsened by unfavorable economic circumstances and also owing to several changes it had made in its product marketing and pricing strategies. In 2011, Company sounded the alarm as store traffic had started plummeting and all efforts to win back customers failed.
Besides, stiff competition from bigger rivals like Wal-Mart and Target too hurt had the sales of Dots.
Dots, a brand catering to women who are both fashion- and price- conscious, was founded by Bob Glick in 1987 in a small suburb of Cleveland, Ohio. The company employs about 4,000 workers, including 200 at its headquarters in Glenwillow, Ohio.