Lorna Jane USA Inc files for Chapter 11 bankruptcy protection

The Garden City, California-based company believes that pandemic-driven changes in consumer shopping habits that spurred the store closures “will endure even after the pandemic subsides, continuing to impact brick-and-mortar retail into the future.”

Through Chapter 11, the debtor intends to restructure, stating that the primary goal of the bankruptcy proceeding is “to right-size its United States presence in part by rejecting all retail boutique store leases to enable the Debtor to better adapt and cultivate sustained profitability in light of the increasing shift to online purchasing and the impact of the Covid-19 pandemic on brick-and-mortar retail sales.”

The first day hearing has been scheduled for today, the company said in a press release.

The company reports $6.8 million in assets and $48.7 million in liabilities.

The debtor is the wholly-owned subsidiary of LJ USA General Partnership, which is in turn owned equally by LG GP No. 1 Pty and LG GP No. 2 Pty, both organized under the laws of Australia, which are in turn wholly owned by Lorna Jane PTY Ltd, which is also organized under the laws of Australia, and headquartered in Brisbane.

The company said that the pandemic has suppressed consumer willingness to shop in person, particularly in indoor malls where most of the debtor’s retail boutiques are located and social distancing is difficult.

“Consequently, consumer habits have changed and there has been a decided accelerating shift away from in-person retail shopping in favor of online purchasing that is predicted to endure even after the pandemic subsides,” the company added.

Fibre2Fashion News Desk (DS)