Avenue Moves to Keep Lingerie Promises

Executives at plus-sized retailer Avenue rushed to the courtroom Thursday to make sure that ladies who purchase their unmentionables from the chain remain, ahem, well-supported throughout the case.

In an 89-page summary of its immediate operational needs, the chain’s owner asked Judge Stuart M. Bernstein of the U.S. Bankruptcy Court in Manhattan to allow the company to continue giving out a free bra to women who’ve purchased five others from its roughly 430 stores, which are often set in suburban shopping malls.

There is, of course, fine print to the long-standing lingerie promotion. But the company said the Bra Club program does enough to draw loyal shoppers back into the stores to justify the promotion’s potential $100,000 expense throughout the bankruptcy case.

The chain and its owner “believe that the Bra Club encourages consumer loyalty and discontinuing the program would deter customers who were expecting to redeem the rewards coupon,” Dawn Robertson, head of chain owner United Retail Group Inc., said in court papers.

Retailers often use their first minutes before a bankruptcy judge to argue the merits of their customer loyalty programs which, technically, drain a company’s finances in gradual increments throughout a case. A bankruptcy judge, who acts as a watchdog over the company’s spending, has to be convinced that restaurants should continue to take gift cards and retailers should continue to punch promotional cards while more important parties like lenders and creditors go unpaid.

But the typical retailer plea goes like this: Keeping those customer promise can be crucial to maintaining the “nothing to see here” atmosphere and appeasing uncertainty that can cloud a bankrupt retailer’s reputation. Already, many confused customers tend to assume that a bankruptcy filing means that a company will shut down.

For Avenue, bankruptcy means a chance to sell itself to a private equity firm that intends to keep the company operating after a significant downsizing that will close nearly a quarter of its locations.

For years, the retailer has tinkered unsuccessfully with its identity as it tried to build up a loyal customer base within the country’s growing $18 billion women’s plus-size market. In court papers, the 4,422-worker company said that the chain lowered its prices during the economic recession but didn’t advertise that enough to draw in new customers.

At times, company officials misread market and weather trends, causing them to slash prices to move the resulting oversupply of apparel. Meanwhile, the chain lost battle ground to bigger retailers, according to court papers.