Teen apparel seller Papaya Clothing filed for bankruptcy protection Thursday, the latest mall-based chain to fall victim to changing consumer shopping habits roiling the retail industry, the Wall Street Journal reported on Friday. Papaya, a privately held California-based chain with 80 stores and some 1,300 employees, said its financial woes are the result of an industry-wide shift in consumer preferences to online shopping coupled with an ill-timed expansion in recent years. Papaya, whose corporate name is Cornerstone Apparel, Inc., brought in revenue of $134 million last year. And unlike many of its competitors that have filed for bankruptcy protection — among them Rue21, Wet Seal and American Apparel — Papaya has no secured debt. The company said in papers filed in U.S. Bankruptcy Court in Los Angeles that it will keep its doors open during its chapter 11 case. It intends to use the bankruptcy to identify the core retail stores it can reorganize around and to wring “meaningful rent concessions” from its landlords.
