A popular women’s clothing company will close dozens of stores as it files for bankruptcy after 18 years in business.
Soft Surroundings sells a variety of products such as women’s clothing, makeup and home accessories. However, the company announced that it would completely restructure its brand.
There are plans to sell the company’s direct-to-consumer assets to another retailer, and several brick-and-mortar stores will also close.
The retailer’s parent company, Soft Surroundings Holdings LLC, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Texas on Sunday.
Brentwood Associates, a Los Angeles-based private equity firm, owns Soft Surroundings.
The retailer has one store in South Carolina and three in North Carolina, including a store in Charlotte that opened in 2016.
In a press release, Soft Surroundings said it filed for bankruptcy to enter into a “restructuring support agreement” under which the company will sell its assets to Coldwater Creek, a catalog and online retailer.
Through this agreement, Coldwater Creek will continue Soft Surroundings’ “ongoing direct-to-consumer and e-commerce operations,” the release said.
According to the filing, final sales are already taking place at the Soft Surrounding locations.
The company will soon “take steps to reorganize its direct-to-consumer and e-commerce operations,” the press release said.
Soft Surroundings had 44 locations in 24 states with about 700 employees as of May 2023, said CFO Dan Karpel.
In July, the company filed a Worker Adjustment and Retraining Notification Act (WARN) notice saying it would lay off 79 workers at the company’s distribution center in Mexico, Missouri.
More layoffs soon followed, with Soft Surroundings calling the move “the beginning of an aggressive repositioning of the brand.”
This comes just a year after the company’s chairman and interim CEO, Bridgit Lombard, reduced inventory and closed a third of Soft Surroundings’ physical locations.
Lombard said the move represents an “over-focus” on key markets and demographics.
According to the bankruptcy filing, Soft Surrounding Holdings listed estimated assets of up to $50,000 and estimated liabilities between $50 million and $100 million.
“Over the past year, we have taken significant steps to strengthen our financial performance, including realigning our business to better align with current market conditions,” Lombard said in the release.
“Our commitment to our stakeholders has never wavered as we carefully considered the best path forward and welcome this next step to ensure a bright financial future for Soft Surroundings.”
“This will allow us to adapt, restructure and become more resilient, ensuring the longevity of the popular Soft Surroundings brand for our customers and partners.”