Byline: Rich Wilner and Alice Welch
NEW YORK — Tapemeasure Enterprises, the contemporary sportswear company that became a pacesetter in stretch fashion, filed for Chapter 11 protection Friday, hurt, it said, by its own expansion plans.
Battling financial problems for months, the company, based at 1411 Broadway, said it will finance operations through cash flow. It listed liabilities of $2.83 million, including $1.56 million in trade debt. Assets were listed at $3.62 million.
According to papers filed in Bankruptcy Court in Manhattan, the Chapter 11 filing was precipitated by an expansion program which included expenses to purchase manufacturing equipment aimed at shortening production time coupled with a downturn in business and a commensurate erosion of margins.
Executives at the company had attempted to restructure certain debt over the past several weeks, and had even made a $500,000 cash infusion in mid-September to ease its credit crunch, according to a market source, but those efforts failed.
Despite the financial troubles, Michael Dayan, president and chief executive officer, said “Demand for our product remains strong and we are confident that we can continue to fill orders without interruption.”
In a statement, Dayan said the company plans to “reorganize its affairs by trimming unprofitable operations and rationing its assets to strengthening ongoing operations.”
The company expects to reduce its 85,000 square feet of production space in Jersey City, N.J., by two-thirds and move into a smaller showroom.
At the same time, Marsha Drogin, director of design for the company and wife of Dayan, has resigned and accepted a position at Body Action Design, a 10-year-old contemporary resource, here.
Drogin, who was named vice president of marketing and merchandising, a new post, reports to Jeffrey Halper, the owner.
“When a talent like Marsha comes along, you make room for her. Her presence gives us an opportunity to do a lot more things and expand our business,” Halper said Friday.
“Body Action Design’s main volume is better specialty stores, and I can help broaden their reach based on my relationships with department stores,” said Drogin.
Like Tapemeasure, Body Action Design specializes in Lycra-based products. Drogin will also be responsible for the Jeffrey Halper division, a three-year-old wovens operation.
Dayan will assume Drogin’s responsibilities at Tapemeasure.
Madelyn Karp, senior account executive at Tapemeasure and in charge of major department store accounts, joined Drogin at Body Action Design on Friday in a similar sales capacity.
Founded about 18 years ago, Tapemeasure at first did traditional knitwear but began to hit stride in 1982 when it moved into the contemporary market.