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In Ch. 11, Gotcha Looks to Reorganize

LOS ANGELES — Attempting to avert a total wipeout of its name in the industry it helped create, surfwear maker Gotcha International L.P. has filed for Chapter 11 bankruptcy protection as well as a motion to sever its ties with its domestic...

LOS ANGELES — Attempting to avert a total wipeout of its name in the industry it helped create, surfwear maker Gotcha International L.P. has filed for Chapter 11 bankruptcy protection as well as a motion to sever its ties with its domestic licensee, Ederel.

The decision to reorganize stems from “non-performance issues” in the past 11 months that have necessitated a reorganization of the finances, licensees and distribution being implemented by the 23-year-old brand, a Delaware limited liability partnership. Details of its reorganization are expected to be announced today.

The line has had a spotty shipping record in recent seasons, and sources in the action-sports industry have been buzzing about the personnel exodus created by both layoffs and resignations at the once-legendary company over the last year.

“Unfortunately the complexities in dealing with this particular licensee have escalated beyond nonperformance,” said Gotcha Holdings president Donald S. Grier in a statement provided to WWD Monday. Grier, an industry veteran with stints at Vision Skateboards and Maui & Sons, joined the troubled brand June 1.

Late last year, amidst conflicts about design and shipment, Ederel filed suit against Gotcha and Gotcha countered. The ensuing court battles led Gotcha to file a motion Monday morning rejecting Ederel as its domestic licensee, claiming “non-adherence to the company guidelines on conformity of brand design and direction, quality issues, approved distribution channels and interference with Gotcha business in other markets.”

Ederel Sportswear Inc. was formed in October 1999 by Irvine, Calif.-based snowboard and ski-apparel manufacturer Snowmass Apparel Inc. specifically to handle Gotcha and its MCD and GirlStar brands.

Calls to Ederel went unanswered, and representatives of Snowmass were at the MAGIC International show in Las Vegas and unavailable for comment.

In a phone call from Las Vegas Monday, Grier confirmed that Gotcha and Gotcha Girl are showing at MAGIC under several new licensees including Jerry Leigh for juniors, Mamiye Brothers for women and Michael Gerald for young men and boys. The new strategy positions the line as a broader California lifestyle brand and is focusing on mid-tier retail channels in its domestic distribution.

“Because of Ederel, we have been trending downward. We anticipate a quick regrowth,” he added.

This story first appeared in the August 27, 2002 issue of WWD.  Subscribe Today.

The firm has been flailing for several years as it struggled with infrastructure concerns among its leadership, as well as an identity crisis in a market that headily weighs its credibility on being “core.” In fact, the “MC” in the MCD brand stands for “more core.”