Papaya blames its financial struggles in part the shift in consumer shopping preferences to online as well as increased competition.

Another apparel retailer has filed for Chapter 11 bankruptcy, bringing the total number of retail bankruptcies through the first half of 2017 to 12.

Papaya Clothing last Thursday filed for Chapter 11 in the United States Bankruptcy Court for the Central District of California. Papaya cites assets in the $1-10 million range and liabilities in the $10-50 million range, with apparel manufacturer Ambiance Apparel cited as its largest creditor, according to a court filing. Among its assets are the retailer’s more than 80 store locations and its 75,000 square foot headquarters that is also home to its online fulfillment center.

A combination of overexpansion, as well as an increasing number of shoppers preferring to shop online led to Papaya’s financial downfall, the company writes.

“The high cost of expansion combined with decreasing store sales as a result of a general industrywide shift in consumer shopping preferences from in-store to online shopping, and the resulting increased competition, has left [parent company] Cornerstone with insufficient liquidity to meet all of its financial obligations,” the company writes.


Papaya will continue to sell online for the foreseeable future. The retailer does not break out what percentage of its sales are transacted online in any of its court filings.

Papaya’s bankruptcy filing came just days after children’s apparel retailer The Gymboree Corp, No. 392 in the Internet Retailer 2017 Top 500, filed for Chapter 11 bankruptcy.

Here’s a look at all the retailers that have filed for Chapter 11 bankruptcy in 2017:

Apparel chain Papaya Clothing files for Chapter 11 bankruptcy Favorite