BCBG Max Azria Group filed for bankruptcy protection
In court documents, the company said it plans to pursue either a sales auction in bankruptcy court or a debt-for-equity swap with its lenders. The company owes lenders nearly $460 million. BCBG has secured $45 million debtor-in-possession financing to support the reorganization process.
“Like many other apparel and retail companies, BCBG has fallen victim in recent years to adverse macro-trends, including a general shift away from brick-and-mortar to online retail channels, a shift in consumer demographics away from branded apparel,” Chief Restructuring Officer Holly Felder Etlin said in court papers
The company also failed to set up a large presence on the web, and e-commerce sales are “a small proportion” of its overall business, bankruptcy documents said. “Fully exploiting the growth of online retail remains an ongoing process,” according to the documents.
In 2015, BCBG got a $135 million cash infusion and also restructured its debt. In August, as part of further debt restructuring, founder Max Azria lost his majority equity stake and stepped down as CEO, the documents said.
In January, the retailer announced plans to close stores and restructure the company due to mounting pressure from its debt burden and more consumers opting to shop online. The company has closed 120 U.S. stores this year and it’s also beginning to close freestanding stores in Canada and consolidating operations in Europe and Japan.
The company plans to refocus on licensing, e-commerce and selling through other retailers
“The steps we are taking now to address the shift in customer shopping patterns and the growth of online shopping will allow us to focus on our partner relationships, digital, eCommerce, selected retail locations, and wholesale and licensing arrangements,” Marty Staff, acting interim CEO, said in a statement.
Photo courtesy BCBG
