It’Sugar Files For Bankruptcy Protection, Old Pasadena Store Shuttered

The nation’s largest candy store retailer has filed for Chapter 11 bankruptcy.

It’Sugar, which has a store on Colorado Boulevard, plans to keep its nearly 100 stores open as it works through its reorganization plan. 

“It’Sugar’s liquidity and its ability to sustain its operations were dependent on obtaining significant rent abatements or deferrals from its landlords, amended payment terms from its vendors, and improvement and stabilization of its sales volumes,” said  Jarett Levan, president of BBX Capital Corp. and BBX Capital Florida LLC in a prepared statement. 

“This has not occurred and resulted in the decision to file bankruptcy proceedings. We believe that It’Sugar will be better positioned to successfully navigate the effects of the COVID-19 pandemic upon exiting from bankruptcy.”

While It’Sugar has been engaged in negotiations with its landlords for rent abatements, deferrals, and other modifications, it has received notices of default from the landlords of 49 of its retail locations. While no termination notices have been received, the cure periods of the defaults have generally expired.

At the time of the bankruptcy filing, It’Sugar had approximately $.5 million of cash, $6.2 million of secured debt, and $10.4 million of unsecured liabilities, including unpaid rent obligations.

The company cited the effects of the pandemic on sales and consumer behavior as well as “the recessionary economic environment.” The filing was announced by BBX Capital Corp., which purchased the company for approximately $57 million in 2017. 

According to a statement released by the company, the retailer was devastated by the pandemic. Sales related to travel and tourism historically represented about 60 percent of It’Sugar annual sales.

The company shut down at the start of the pandemic in March, but reopened its stores as states began attempting to get businesses going.

However, the company was not able to get the concessions it needed from landlords and vendors.