Dots fills voluntary bankruptcy

American womenswear label Dots LLC, announced Tuesday that it and some of its affiliates have filed for Chapter 11 bankruptcy

protection in an effort to keep its doors open and find a buyer. The voluntary filing "will allow the company to restructure and continue its new merchandising strategy focused on re-engaging its core customer."

"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," said Dots' Chief Executive Lisa Rhodes, in a written statement. "We are in the process of turning the business around, and the filing is another step toward doing that."

Dots said it will work with stakeholders to "finalise, obtain court approval for, and implement a restructuring plan, including a potential sale of some or all of the company's business as a going concern, as soon as possible". As part of those efforts, Dots has closed 36 under performing stores.

Dots was acquired by New York private equity firm Irving Place Capital for an undisclosed price in January 2011.

Rhodes said in a bankruptcy filing that "Dots' financial difficulties have been exacerbated by adverse economic conditions and a number of largely unsuccessful changes in product pricing and marketing, as well as a burdensome lease portfolio."

"The company's cash needs are significant and liquidity continues to be strained," she said in a statement. Although Irving Place Capital invested significant resources, Dots continued to struggle to pay its bills.

According to the 16-page bankruptcy filing, the company has between 1,000 and 5,000 creditors, including its founder, Robert Glick.

The company has valued its assets at 50 to 100 million dollars, and its liabilities at somewhere between 100 and 500 million dollars. Lowenstein Sandler LLP of Roseland, N.J. are the retailer’s legal advisers while the financial advice has been undertaken by PriceWaterhouseCoopers LLC.