Soft Surroundings goes bankrupt and closes all stores

Women’s clothing retailer Soft Surroundings has filed for bankruptcy.

Women’s clothing retailer Soft Surroundings has filed for bankruptcy. According to court documents, the company will close all 44 stores. Competitors Coldwater Creek will acquire the company’s remaining assets and continue selling clothing and accessories under this brand online and through catalogs.

Soft Surroundings employs approximately 646 staff, with around 450 working in the company’s retail stores, 140 at the headquarters, 15 in the call center, and 50 at the former distribution center in Mexico, Missouri.

To ensure uninterrupted operations, the company secured $18 million in financing from consulting firm Gordon Brothers, which specializes in handling debtor liquidation.

Soft Surroundings has never had a large footprint, although its branches in 24 states span the entire country. At the beginning of the pandemic, the company managed 80 stores. Court documents indicate that during and after the disease outbreak, the company struggled to recover lost sales and adapt to market changes. Excess inventory in the eventually closed stores led to price increases, impacting margins, and the company’s liquidity steadily declined.

Last year, according to court documents, the company closed 25 stores. They will disappear as Coldwater Creek transforms the specialized retail network into an online DTC brand. According to court documents, E-commerce has been the mainstay of the business, accounting for 65.4% of total sales last year, totaling $141.6 million.