Caché fills for bankruptcy and keeps looking for a savior

After struggling for months, trying to find an alternative, Caché Inc (CACH.O) has become the fifth US apparel retailer to file for bankruptcy in three months. Meanwhile, the retailer will keep on looking for strategic solutions.

Caché is seeking a "stalking horse" bidder for its assets and it has received commitment for debtor-in-possession financing of up to 22 million dollars from Salus Capital Partners LLC, the retailer said on Wednesday.

"We took this action today with the goal of securing Caché's future," said Jay Margolis, Caché Chairman and CEO. "Our team has been working tirelessly to implement a turnaround. In a short period of time, we upgraded key stores and closed unprofitable ones; launched a more vibrant and robust e-commerce site where conversion has doubled; and have seen same store comp sales from our 2014 Holiday season increase 9.5 percent, with this positive momentum continuing through January. However, the depressed brick and mortar retail market, the continued growth of online shopping, and rapidly changing consumer tastes and habits thwarted our efforts. Ultimately, we have not had the time or capital to realize all of the benefits of our hard work."

According to data accessed by the ‘Wall Street Journal’, Caché listed assets of 10 million-50 million dollars and liabilities of 50 million-100 million dollars.

Caché, fifth US retailer to fill for bankruptcy in three months

The company said in December that it was evaluating strategic alternatives and had received an inquiry regarding a potential sale.

It is noteworthy that the fashion retailer has not reported a profit in the past nine quarters. The reason? Caché blamed the depressed brick-and-mortar retail market, the growth of online shopping and rapidly changing consumer tastes for its Chapter 11 filing.

But Caché has not been alone in its sorrows, as Deb Shops and Delia*s Inc DLIA.O filed for bankruptcy in December, while Body Central Corp (BODY.PK) cease trading in January. Likewise, Wet Seal filed for bankruptcy protection last month.

Caché blamed a “persistently weak” environment for speciality retailers for impeding its turnaround effort, reported Bloomberg.

Caché will close some retail locations and sell all or most of its assets through an agreement with SB Capital Group LLC and Tiger Capital Group LLC as liquidators and agents, according to the filing.