NEW YORK — Warnaco needs more time. Citing the large size and complexity of its various businesses, the bankrupt Warnaco Group has asked for another extension in filing its reorganization plan. The company — which was expected to file...
NEW YORK — Warnaco needs more time. Citing the large size and complexity of its various businesses, the bankrupt Warnaco Group has asked for another extension in filing its reorganization plan. The company — which was expected to file its plan this Friday — has instead asked for a one-month extension to Sept. 30. A hearing is scheduled for Wednesday at 9:45 a.m. This is the fourth postponement Warnaco has sought.According to court papers filed Aug. 14, Warnaco is seeking a postponement because its 38 Chapter 11 cases “are extremely large and complex with thousands of creditors and debts exceeding $2 billion.”The company’s liabilities, subject to compromise, stood at $2.47 billion on July 2, 2002, versus $2.44 billion on Jan. 5, 2002. Total liabilities on July 2 were $2.66 billion.Although Warnaco, which filed bankruptcy on June 11, 2001, said it had made “substantial progress” in meeting the Aug. 30 deadline, it felt it would not be able to meet the target date.Antonio Alvarez, president and chief executive officer of Warnaco, couldn’t be reached for comment Friday. However, a spokesman said: “We’re completing the exploration process regarding the sale of the businesses for the purpose of comparing values. We still believe we will emerge as a stand-alone company.”The filing says that Warnaco is nearing the completion of the exploration process with respect to the potential sale of “core” business units for purposes of comparing the values that might be achieved in a sale with stand-alone reorganization values. To date, no “core” businesses have been sold. The filing notes that although it is possible that a sale of one or more business units might occur prior to Warnaco’s emergence from bankruptcy or its plan of reorganization, the company expects to file a plan providing for the “internal restructuring of all their “core” businesses and the emergence of the company as a whole from Chapter 11 on a stand-alone basis. Sources told WWD that the extension is just part of the natural process, and the company, which is “very sound right now,” is expected to emerge leaner and in much better shape.As reported earlier this month, VF Corp. is still seen as a potential buyer of Warnaco and could acquire the company after it emerges from bankruptcy with its lenders as the new owners. However, bankruptcy sources said a more likely scenario would be for a deal to occur before the filing of the reorganization plan, with VF in effect “funding” the plan of reorganization. A VF spokeswoman said Friday: “We have no news or comment at the present time.”Allen B. Schwartz, design director of ABS by Allen Schwartz, which is part of Warnaco’s stable, said Friday: “My feeling is they’re going to hold off selling and make the companies better and get them running right. They’re going to wait and sell it to the people who will pay. No one will steal these companies.”Schwartz said ABS is having its best year in 21 years. “I’m working hard to put a [venture capital] group together to buy the company.”As reported Aug. 6, Warnaco said it expected “no material impact” on its reorganization plans as a result of the Securities and Exchange Commission’s ongoing investigation into the company’s accounting practices. At the time, it said it would meet its Aug. 30 deadline. A Warnaco spokesman said Friday that the SEC investigation wouldn’t impact a Sept. 30 deadline.The current SEC investigation into Warnaco’s accounting has been under way since before it was first disclosed by Warnaco in April 2001.Warnaco acknowledged in its 10-K last month that it had been informed the commission intended to “recommend that the SEC authorize an enforcement action against the company and certain persons” who were employed by or affiliated with the firm before the start of its 1999 fiscal year on Jan. 3, 1999.While Warnaco is comprised of over 100 separate legal entities worldwide, the court papers note that 38 of the company’s legal entities are Chapter 11 debtors. Its divisions include the Intimate Apparel group (including Calvin Klein Underwear, Warner’s, Olga and Bodyslimmers brands), its Swimwear group (including Authentic Fitness) and its Sportswear group (including Calvin Klein Jeanswear, Chaps by Ralph Lauren and Catalina/White Stag brands). The filing notes that the debtors owe in the aggregate over $250 million in unsecured (including unsecured subordinated) amounts to creditors.The motion notes that since Warnaco filed bankruptcy, it has “successfully stabilized and improved its businesses.” It says it has maintained “more than enough liquidity to fund operations,” and the company has excess cash of $72 million as of Aug. 9, 2002. The filing notes the company has paid down completely all outstanding balances under its $600 million debtor-in-possession financing facility.Under Alvarez’s leadership, the filing notes that Warnaco has consolidated operations, facilities and functions; eliminated nonessential departments; implemented wide-ranging cost-cutting measures, and rejected approximately 102 leases of unprofitable retail stores and other unnecessary facilities. In addition, it has rejected costly leases of an aircraft and a helicopter and reduced corporate overhead costs by approximately $20 million from fiscal 2001 to fiscal 2002. According to the court papers, in the six months ended June 30, 2002, Warnaco generated consolidated EBITDAR (earnings before interest, taxes, depreciation, amortization and restructuring costs) of $73 million, which compares with full-year fiscal 2001 consolidated EBITDAR of $20.2 million.So far, Warnaco has completed the sale or liquidation of several “noncore” units. The sales of GJM Sleepwear and the Penhaligon’s beauty chain have generated gross proceeds totaling about $20 million, and IZKA, a French maker of seamless intimate apparel, has been liquidated, according to the filing.As reported, Warnaco filed a Form 10-K on July 31 detailing $51 million in restatements for three fiscal years beginning in 1999. Warnaco said that, in a review of business operations in June 2001, it “became aware of certain accounting errors involving the recording of intercompany pricing arrangements, the recording of accounts payable primarily related to the purchase of inventory from suppliers and the accrual of certain liabilities.”These errors were related to the Designer Holdings Ltd. subsidiary, as well as to the recording of accounts payable and inventory data discovered in 2001 figures involving its European subsidiaries. The SEC has declined to comment on the investigation, so it isn’t known whether its eyes are focused on the Designer Holdings unit, the makers of Calvin Klein jeans, acquired in 1997 for $354 million, or some of its other domestic units.
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)