NEW YORK – Women's clothing retailer Body Central is going out of business and closing all its stores Sunday evening, according to an attorney for the company, a move that will cost 2,500 workers their jobs.
The chain has two stores in the Twin Cities, at Burnsville Center and Maplewood Mall.
Body Central Corp., based in Jacksonville, Fla., had said earlier this week that it was "experiencing significant liquidity challenges" and was working with advisers to evaluate its options. As of Tuesday, the company had 265 stores in 28 states. Gardner Davis, an attorney for the company, said it had about 2,500 employees, who were notified of the closings Friday.
Davis said the company had sought to reorganize its business, but "simply couldn't raise the capital."
In a separate filing, it said lender Crystal Financial terminated its $17 million credit line, leaving Body Central without a source of revolving debt.
Body Central was founded in 1972 and caters to women in their late teens to mid-30s, according to the company's website.
Body Central will wind down the business through a state process, known as an assignment for the benefit of creditors, instead of a typical federal bankruptcy.
The state process, known as an ABC, will be run by Michael Moecker & Associates, a Florida firm that specializes in recovering assets for creditors.
This process is "less expensive, faster and more flexible," Davis said. "The only people who lose out on an ABC are the lawyers."
Body Central joins a number of women's clothing chains dealing with default or bankruptcy in recent weeks. Deb Stores and Delia's filed for bankruptcy last month, hurt by competition from online and fast-fashion retailers. Wet Seal, meanwhile, said this week it will close about two-thirds of its locations as it strives to save cash after receiving a default notice.
Body Central shares fell 29 percent to 18 cents at the close Friday. The stock has lost more than 99 percent of its value in the past year.
Body Central was founded by Jerrold and Ronnie Rosenbaum, who opened their first store in Jacksonville. It operates stores under the Body Central and Body Shop brands, mostly within malls. The company lost $70.2 million in the 12 months ended in September. Body Central had only $4.5 million in cash and equivalents as of Nov. 3.
The Associated Press and Bloomberg News contributed to this report.