L’Occitane’s US business has filed for Chapter 11 bankruptcy after “disproportionately high rent store obligations” made trading “no longer tenable”.

According to RetailDive, L’Occitane North America managing director Yann Tanini said the retailer’s lease obligations exceed $30 million a year, and it currently has $15.1 million in arrears.

“The debtors primary goal in chapter 11 is to right-size its physical footprint in part by rejecting certain leases to enable [it] to better adapt and cultivate sustained profitability in light of the increasing shift to online purchasing and the impact of the Covid-19 pandemic on bricks-and-mortar retail sales,” Tanini said.

Tanini said the business has suffered a drop in bricks-and-mortar sales of 56.5 per cent, while its online sales have spiked 72 per cent.

Stores are continuing to trade, the business said in a press release, and it has ample liquid cash to keep operations going for the time being.

“Today’s action is a pivotal step forward in achieving the full potential of L’Occitane’s US business,” Tanini said.

The business said it filed a “first day” motion with the courts to continue to pay staff and suppliers, and to continue to honor gift cards.