Ashley Stewart’s latest bankruptcy bid was short-lived — and its dismissal has left the women’s plus-size apparel retailer with fewer protections and an uncertain future.

On Dec. 17, the company’s former operator filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of New Jersey, according to court documents. Less than a week later, a judge dismissed the case due to a lack of board authorization, The Street reported.

The ruling removed Ashley Stewart’s bankruptcy protections, allowing creditors to pursue claims and increasing the risk of liquidation, The Street noted.

In the meantime, Ashley Stewart’s stores and ecommerce site remain open. However, without court-supervised restructuring in place, the company appears to have few paths forward.

Judge tosses Ashley Stewart bankruptcy filing over board authority conflict

Ashley Stewart’s latest Chapter 11 attempt — its third in just over 15 years — added the plus-size women’s fashion brand to the list of large retailers that filed for bankruptcy in 2025.

The retailer previously filed for Chapter 11 in 2010 and again in 2014, when a restructuring that included closing underperforming stores and a renewed focus on ecommerce helped stabilize the business and return to profitability.

This case, however, stalled before any restructuring could begin.

A “newly reconstituted board” authorized the filing in an attempt to reverse a recent foreclosure sale of Ashley Stewart’s assets, according to a case summary from Bondoro Insights. The filing alleged the sale, to G Ashley Inc., undervalued the assets and excluded higher offers, among other complaints, Bondoro reported.

But the company’s current board objected, arguing the effort was led by former board members who lacked the proper authority. The board accused former director Julia Klyashtorny and Ram Ajjarapu — who served as Ashley Stewart’s CEO — of attempting to “wrestle control of the company” through the bankruptcy process, Bloomberg Law reported.

In a Dec. 23 ruling, Judge Stacey L. Meisel of the U.S. Bankruptcy Court for the District of New Jersey sided with the current board. She concluded the filing was unauthorized and “filed without proper authority by board members appointed in violation of a state court order,” according to Bloomberg Law.

The decision “reinforces a critical principle: a company cannot file for bankruptcy without proper corporate authority, affirming important precedent for future restructuring matters,” attorneys for the current board at Mandelbaum Barrett PC said in a release statement.

Breakdown in ownership, strategy and fulfillment

The dispute traces back to a March 2024 sale, when investor group Kinbow LLC acquired a majority stake in Ashley Stewart, court documents show. Management authority shifted to a new board of the group, but internal friction soon followed — both over control of the company and its financial direction.

Court filings cited by Bondoro describe a series of operational and strategic missteps. Among them were alleged financial misconduct and a $65 million switch to a new third-party logistics provider that faltered, disrupting fulfillment and resulting in more than $4 million in lost revenue.

As performance worsened, sales declined and liquidity tightened. By April 2025, Ashley Stewart had fallen behind on rent at its New Jersey headquarters, filings show.

That financial pressure led to a contested foreclosure sale in November 2025. Secured lender Wingspire Capital sold off nearly all of the company’s assets to G Ashley Inc. — an entity the petitioners claim “is controlled by former insider management,” Bondoro reported. G Ashley assumed control of the retailer’s store footprint and ecommerce site, according to the report.

In their bankruptcy petition, the filers argued the foreclosure was “tainted by insider misconduct,” misrepresented the value of Ashley Stewart’s assets, and bypassed “bona fide higher offers.” They sought to use Chapter 11 to void the sale and recover the assets, but that effort collapsed with the Dec. 23 dismissal.

In the filing, Ashley Stewart listed $10 million to $50 million in assets and $50 million to $100 million in liabilities. The company described itself as “non-operating” following the sale to G Ashley.

Another restructuring playbook falls short

Ashley Stewart’s parent company, Urban Brands, first filed for Chapter 11 bankruptcy in 2010. The Secaucus, N.J.-based chain filed again in 2014 amid dwindling mall traffic and heavy debt loads.

The latter restructuring proved more successful. Led by then-CEO James Rhee, the company shuttered more than 100 stores, modernized its tech stack, and leaned heavily into ecommerce, reversing a 22-year profit loss, according to industry reports. By 2015, Total Retail reported a 25% increase in year-over-year sales and an 80% jump in ecommerce revenue.

In the years since, however, the plus-size apparel market has grown more competitive. Major retailers have expanded size-inclusive offerings, while digital-native brands have gained market share online. Torrid, a leading women’s plus-size fashion brand, announced in 2025 that it would shutter up to 180 stores as it focuses on ecommerce and online growth, The Street reported.

Against that backdrop, Ashley Stewart’s latest crisis appears driven by a mix of operational missteps and internal power struggles, which now appear to leave the company with limited options as creditors circle.

Among Top 2000 ecommerce bankruptcies

Ashley Stewart ranks No. 286 in the Top 2000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by their annual ecommerce sales.

The company joined a growing wave of Top 2000 retailers that filed for bankruptcy in 2025. At least eight retailers in the database — including major names in apparel, pharmacy, home goods and specialty retail — cited a mix of headwinds, ranging from falling in-store traffic to broader macroeconomic pressures, including tariffs.

Recent Top 2000 bankruptcy filings include:

• Hudson’s Bay Co. (No. 26)
• F21 OpCo, Forever 21’s U.S. retail operator (No. 109)
• Rite Aid (No. 128)
• Joann Inc. (No. 300)
• Claire’s (No. 388)
• iRobot Corp., maker of Roomba robotic vacuums (No. 459)
• Liberated Brands, former operator of Billabong, Boardriders, and Quiksilver

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