Kasper Files Chap. 11, Plans Transformation Into Anne Klein Group
NEW YORK -- John D. Idol is banking Kasper's future on Anne Klein -- but first he has to get through Chapter 11. Kasper ASL filed a prepackaged reorganization plan on Tuesday -- the second time the company has faced Chapter 11 in the past...
NEW YORK -- John D. Idol is banking Kasper's future on Anne Klein -- but first he has to get through Chapter 11. Kasper ASL filed a prepackaged reorganization plan on Tuesday -- the second time the company has faced Chapter 11 in the past decade -- but also its first opportunity to get out from under a $110 million debt load partly incurred through its acquisition of the higher-profile Anne Klein labels.
Under the reorganization plan, the corporate identity would also change from Kasper ASL to Anne Klein Group, as outstanding Kasper stock would be swapped for the newly issued shares of Anne Klein. ASL refers to former chairman Arthur S. Levine, the company founder who left the business shortly after Idol's appointment and then formed a partnership with Elie Tahari to replicate his blockbuster better suit business as a competitor under the Arthur S. Levine for Tahari label, as reported.
Under the plan presented to U.S. Bankruptcy Court in Manhattan, Kasper's debts would be converted into equity in the reorganized company, which has also secured a $35 million debtor-in-possession financing facility from its existing bank group, led by JP Morgan Chase.
Idol, who was brought on board as chairman and chief executive officer from Donna Karan International last year specifically to address Kasper's liquidity, said the bankruptcy filing was a necessary step toward the goal of returning the company to profitability by next year. With the DIP facility in place, Idol plans to continue as "business as usual," he said, noting that measures designed to develop its Anne Klein sportswear business -- its new ad campaign featuring Bridget Hall, its fall fashion show on Monday at Mercedes-Benz Fashion Week and its flagship opening in SoHo next Wednesday -- would proceed as planned.
Ironically, the value of Levine's Kasper ASL helped the Leslie Fay Co. emerge from bankruptcy protection in 1997 by spinning the suit division off as a publicly traded venture. But it was saddled with debt incurred from its former parent company.
Then substantial losses at Kasper, hit by both a decline in career dressing and the difficult integration of the Anne Klein labels over the past two years, led the company to default on its semiannual 13 percent interest payments to its lenders that totaled $20 million a year, Idol said.
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