Centric Brands is starting to think beyond bankruptcy court.
The company said the court approved its plan of reorganization and that it expects to exit Chapter 11 by the end of October as a private company backed by Blackstone, Ares Management Corporation and HPS Investment Partners.
Jason Rabin, chief executive officer of the brand specialists, described the court’s OK as “a critical moment in our journey to emerge as an even stronger company, poised for long-term growth.”
“We continue to execute against our strategy while maintaining our valued, long-standing relationships with our business partners,” he said. “With a strengthened financial position, I am excited about our strong future ahead.”
Blackstone is expected to swap its second-lien debt for equity in the new company. Ares and HPS plan to keep their senior loan positions and also receive equity.
Centric also said it “expects to secure new exit financing in the form of a new securitization facility, as well as new revolving and term loan facilities from its current secured lenders, which will help fund the company’s exit from Chapter 11 and its go-forward operations.”
Centric Brands, which is licensee to more than 100 fashion brands, succumbed to its debts in May as part of the first wave of coronavirus-induced fashion bankruptcies. In addition to licensing brands from others — Centric has worked with Nautica, Michael Kors, All Saints, Jessica Simpson and many more — the company also owns Zac Posen, just acquired in February, as well as Hudson, Robert Graham, Swims and Avirex.