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It’Sugar files for bankruptcy protection after sales sour
It’Sugar closed stores in March, reopened in June and July
A Deerfield Beach-based candy chain is the latest retailer to file for bankruptcy protection due to Covid-19.
It’Sugar, with about 100 candy stores in mostly tourist markets, has $500,000 in cash, with $6.2 million of secured debt and $10.4 million of unsecured liabilities, including unpaid rent, according to a press release.
The company reported losses before income taxes of $8.4 million for the quarter ended June 30, and losses of $36.5 million for the six-month period that ended on that date.
It’Sugar plans to keep stores operating throughout the bankruptcy proceedings. Its parent company, Fort Lauderdale-based and publicly traded holding company BBX, still plans to spin off a separate company which will own It’Sugar. BBX said in the release that its other divisions are still “financially strong.”
The candy store blames its predicament on fewer sales, less demand and consumer behavior. About 60 percent of annualized It’Sugar sales came from the travel and tourism market.
In March, the company closed all of its stores due to Covid-19. It reopened in June and July but failed to stabilize sales, and failed to get rent abatements and deferrals from landlords plus amended payment terms from vendors. Landlords for 49 locations sent notices of default. It’Sugar received no terminations, but its cure periods have generally expired, according to the release.
It’Sugar has 15 locations in South Florida and nine in the New York area, according to its website.
Among the largest unsecured debts listed in its bankruptcy filings is a $6.3 million guaranty from SHL Holdings, an affiliate of parent company BBX. Other claims include $650,000 to Nassau Candy of Hicksville, New York, for trade debt; and $503,000 owed to Grand Bazaar Shops in Las Vegas for a rent-lease obligation.
Some retailers have requested bankruptcy judges pause proceedings while Covid-19 continues to affect the country, adding more strain on landlords.
Other retailers to seek bankruptcy protection in recent months include the parent of New York & Co., and Century 21.
Meanwhile, BBX partnered with CC Homes to buy a large development site in Miramar earlier this year for $39 million.