Troubled iMedia Brands has filed for Chapter 11 bankruptcy protection and could possibly sell after failing to dig itself out of debt.

The parent company of shopping network ShopHQ, women's clothing retailer Christopher & Banks and leather goods brand J.W. Hulme Co. said in a bankruptcy filing this week it defaulted on a key loan, but the company has been floundering for months. Its assets add up to $272.6 million while its debts total $373.7 million, the filing said.

Per the filing, company leaders said they are "actively engaged" with a potential buyer, and they hope to finish the deal "in the very near term." iMedia's leadership determined bankruptcy "would be a prudent step to facilitate these efforts by, among other things, allowing the debtors to obtain the 'breathing spell' as they work to finalize a value-maximizing transaction for their stakeholders."

IMedia declined to comment further.

The company's mounting debt ended up being too much to overcome, said Mark Argento, a founding partner and analyst at Minneapolis investment bank Lake Street Capital Markets.

IMedia accrued much of the debt in the wake of acquisitions it made, including its $95 million purchase of German interactive retail company 123tv — distributed across approximately 40 million German and Austrian homes — and cloud-based software and services company Synacor's Portal and Advertising business segment that iMedia used to build its media commerce services capabilities.

"They benefited from COVID, [but] as consumer behavior normalized ... that created a headwind for them after making these acquisitions," Argento said.

There have been numerous signs in the past year that iMedia was in dire straits. Last fall, it fell out of compliance with its major lender, forcing the company to dramatically cut costs and find cash to make payments at a time when it needed funds to prepurchase inventory for the holidays.

In April, iMedia conducted a sale-leaseback agreement for its Eden Prairie headquarters and a Kentucky distribution center to raise funds. The delays in that process contributed to the company missing deadlines for quarterly and annual filings with the U.S. Securities and Exchange Commission (SEC).

In April, the company named the managing director of Huron Consulting Group, James Alt, as chief transformation officer and hired the investment banking firm Lincoln International to help it restructure its asset-based lending revolving line of credit. Huron is a management consulting firm specializing in turnarounds and transformations.

As part of the bankruptcy filings, Alt wrote iMedia "faced substantial macro challenges due to a confluence of factors driven primarily by post-pandemic changes in the spending behavior of consumers, inflationary pressures on goods and labor, high content-distribution costs and continued erosion in household subscribers in the U.S. cable and television market." For fiscal year 2022, iMedia reported a loss of $70 million.

Last week, the Nasdaq stock market sent iMedia a notice that it was out of compliance for failure to file its Form 10-Q needed to report its quarterly earnings in time. Last month, it received another noncompliance notice because it delayed filing its annual report.

The company had until July 3 to let Nasdaq know of a plan to regain compliance.

In May, iMedia received a notice of default on a $10.6 million loan. In June, the creditor, Growth Capital Partners, sued iMedia.

Last fall, Nasdaq informed iMedia it was in danger of delisting after it had fallen out of compliance with the minimum $1 bid price requirement needed to remain viable on the Nasdaq Global Market. In April, Nasdaq moved iMedia to one of its lower-tier markets because its stock price remained under $1 a share for numerous months.

In a Friday filing with the SEC in regard to the bankruptcy, the company said it will suspend trading of its common stock as of July 10, and it plans to file with the SEC to have its stock removed from Nasdaq.

"The company cautions that trading in the company's common stock during the pendency of the Chapter 11 cases is highly speculative and poses substantial risks," the filing said.

IMedia is officially incorporated in the state of Delaware and filed its bankruptcy papers there.

A Chapter 11 bankruptcy is considered a reorganization, and the company might continue to operate its business while the case moves through court. Creditors of the company can then vote on that plan.

The fate of iMedia's consumer brands is unknown. Christopher & Banks, which iMedia acquired in 2021, has been popular on its ShopHQ network and has reopened a few of its physical stores.

Star Tribune staff writer Patrick Kennedy contributed to this report.