BCBG Max Azria will emerge from bankruptcy a lighter organization with confirmation of its reorganization plan.
A judge’s approval now allows the company’s proposed sale to Marquee Brands Group and Global Brands Group to move forward. The deal, revealed last month, means Marquee will purchase the BCBG intellectual property for $106 million, while Global Brands takes the operating company for $23 million. The Global Brands deal would preserve as many as 22 stores and includes inventory and contracts. Global Brands in March struck a licensing agreement with the company to make product such as footwear, belts, socks, legwear, jewelry and home for the BCBG Max Azria and BCBGeneration brands.
Licensing and a focus on wholesale operations has been the trend in more recent retailer restructurings, with buyers keen to capitalize on companies’ intellectual property. American Apparel, Wet Seal and Nasty Gal are all recent bankruptcies involving the sale of those firms’ intellectual property. Bebe, which was one of the rare companies to have been able to restructure outside of court, shed its U.S. store fleet in favor of e-commerce, growth of the wholesale business and potentially stores outside the United States.
Confirmation of BCBG’s bankruptcy plan also settles a contract dispute between the company’s former creative director and wife of founder Max Azria, Lubov Azria. The designer, who was dismissed from the company in the spring, argued she was entitled to $7 million under her contract as a result of her firing.
The Azrias also attempted to fight the bankruptcy plan more recently on the grounds that it was a plan for liquidation of the company rather than a true restructuring. That issue is also now quashed with confirmation of the plan.
BCBG filed notice with the California Employment Development Department earlier this month of layoffs at its Vernon headquarters to total 492 and effective Sept. 5.
The fashion house — which includes its namesake label along with BCBGeneration and Hervé Léger — filed for bankruptcy protection in February.
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