Charlotte Olympia has filed for U.S. bankruptcy protection and is looking to restructure its business under an estimated $10 million to $50 million debt load.
The luxury footwear brand, founded in 2008 by Charlotte Olympia Dellal, daughter of model Andréa Dellal and British property development scion Guy Dellal and sister of model Alice Dellal, filed Chapter 11 over the weekend in Delaware bankruptcy court. Although started in London, the brand runs in the U.S. out of New York and has four stores here, all of which it will close.
The company also has a small retail presence outside the U.S., with six total locations in Russia, Thailand, United Arab Emirates, and the U.K., and operates an e-commerce site in addition to selling on Net-a-porter and Farfetch.
Despite filing for bankruptcy, Charlotte Olympia’s president Bonnie Takhar insists the filing is not one for bankruptcy, but instead a filing to close the U.S. stores.
“The closing of our stores in the U.S. is to effectuate a restructuring of our business post-partnership, this is due to the unprecedented disruption in the retail market,” Takhar said in an e-mailed statement.
Nevertheless, in standard opening bankruptcy filings, the company estimated assets of $1 million to $10 million and debt of $10 million to $50 million. The filing includes affiliated corporate entities Pinktoe Tarantula Ltd., Desert Blonde Tarantula Ltd. and Red Rump Tarantula Ltd. Charlotte Olympia counts 21 employees here.
Earlier this year, the brand was said to be entering a “strategic partnership” with Onward Kashiyama, the operator of Jil Sander, Joseph and J. Press, for production. A representative of Onward could not be reached for comment. It’s unclear whether this is the partnership to which Takhar referred.
The brand is looking to “effectuate an orderly liquidation of assets” and close its retail operations, according to court filings, and is seeking approval of a $410,000 loan to fund its wind-down, provided by Three14 Ltd., a brand affiliate that has not filed bankruptcy.
Charlotte Olympia did not elaborate on its relationship to Three14, but according to public records filed in January the U.K., where the entity was registered in 2006 with Charlotte Dellal as a director, it looks to be the brand’s European holding company. But Charlotte Olympia seems to be having some financial difficulties in this region, too.
The brand lost 6.41 million pounds in fiscal 2017, which ended in March of that year, and 5.68 million pounds in fiscal 2016, according to public filings. Total consolidated sales, or “turnover,” also fell to 16.79 million pounds in fiscal 2017 from 20.99 million pounds the year prior. The company’s average headcount also fell to 46 from 52.
When the report was filed, Three14 said it had reduced its losses by consolidating its office in London and has since “implemented cost-cutting initiatives across the board to address the unforeseen international macro conditions in the luxury space.”
The entity also said it was sure “of the future operational performance of the company,” saying it had “adequate resources to continue in operational existence and meet its liabilities as they fall due.”
Onward was also mentioned in the filing as a new partner and shareholder in Charlotte Olympia Holdings Ltd., and Three14 said the partnership would help expand the brand’s distribution and manufacturing “as well as accelerate new growth initiatives for the brand.”
“Management is therefore confident the company is exceptionally well-placed to achieve its ambitious revenue growth in the context of a more appropriate and streamlined operating structure, targets and continue with the long-term strategy of developing the business,” Three14 said.
Charlotte Olympia shoes range from around $600 to $1,500 and a small line of handbags go up to $2,500. There is no sign of the company’s bankruptcy on its web site or its various social media platforms and the brand looks to be set up at Milan Fashion Week.
While a more detailed declaration from a company executive, something that is regularly required at the start of a U.S. bankruptcy, has yet to be filed, Charlotte Olympia told the court it “has been losing money for several years” and a loan from Three14 is its only financial option.
Charlotte Olympia had its first runway presentation in 2016, which included its expanded range of handbags, but it proved short-lived. The last collection presented was fall 2017.
In a 2016 interview, Dellal told WWD that her interest in fashion was sparked by dressing her Barbie dolls as a girl, something that ultimately led to a collaboration with Barbie manufacturer Mattel. Charlotte Olympia has had frequent collaberations over its decade in existence, including MAC Cosmetics, Marvel Comics and Agent Provocateur, a brand that also recently went bankrupt.
As for Dellal’s main venture, shoes, the designs are often cheeky and relatively lighthearted (a caged bird in a heel, a mule styled as clasped hands) but overall, the brand’s style seems to have not strayed until more recently from its signature platform stiletto, a look that has fallen out of favor as much of women’s fashion seems to be more open to stylish and luxurious comfort.
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