Simply Fashion joins the bankruptcy ranks

Florida-based retailer Simply Fashion Ltd. filed for bankruptcy Thursday, telling a Florida court that its 247 stores were hit hard by the recession, after it got its start buying assets from other bankrupt retailers.

This is the last of a growing list of budget fashion retailers filing for bankruptcy protection in the last two years, with the likes of Dots, Deb Shops, Wet Seal and Delia's resourcing to their last option to exit their financial struggles.

As understood by lawyers who accessed the filing, the affordable clothing brand holds liabilities including a 9 million dollars outstanding loan owed to an insider lender, after its stores each lose an average of 38,500 dollars over 2014.

As the ‘Wall Street Journal’ reports, the retailer owes 9 million dollars in secured debt to two of its owners, Swapnil Shah and Shail Shah. Additionally, it owes 400,000 dollars in unsecured debt to IberiaBank. Other debt includes 3.7 million dollars in general unsecured claims and 9.9 million dollars in unsecured debt owed to insiders.

The filing shows that the Shahs are offering to finance Simply Fashion’s bankruptcy with a loan of up to 1.25 million dollars, highlights the ‘WSJ’.