(Reuters) - National Stores Inc, which operates the Fallas, Factory 2-U and other discount apparel and housewares stores, on Monday filed for Chapter 11 bankruptcy, becoming the latest U.S. retailer to succumb to financial pressure as more consumers shop online.
The family-owned company founded in 1962 plans to close 74 of its 344 stores, which now employ more than 9,800 people in 22 U.S. states and Puerto Rico.
It blamed the bankruptcy on a negative environment for retailers, costs from its purchase of the 78-store East Coast chain Conway’s in 2014, lost revenue from Hurricanes Harvey and Maria in 2017, and a data breach that exposed information for more than 552,000 cards in late 2017.
Chief Executive Michael Fallas said National Stores plans after restructuring to “compete in an evolving industry” and continue serving “communities where we are rooted.”
The Gardena, California-based company said its stores support “underserved, low-income communities” where consumers typically shop by price rather than to keep up with fashion trends. Its products sell for an average $5 each.
Store closing sales will begin on Thursday.
Dozens of retailers have filed for bankruptcy in the last two years, including Claire’s, Gymboree, hhgregg, Styles For Less, Toys R Us and Wet Seal.
National Stores has between $100 million and $500 million of both assets and liabilities, according to its petition filed with the U.S. Bankruptcy Court in Wilmington, Delaware.
The company said it lined up $108 million of financing to keep operating while in bankruptcy.
Reuters on Friday reported National Stores’ plan to seek court protection.
Reporting by Jonathan Stempel and Jessica DiNapoli in New York