NEW YORK — After battling everyone from its landlord to its modeling agency over unpaid bills for the past several months, J.Mendel has filed for Chapter 11 protection in U.S. bankruptcy court in New York.
“Restructuring the company’s debts will allow J.Mendel to face the current challenging luxury retail environment, and I am confident that this will allow the company to move forward with renewed financial stability, allowing us to focus on crafting the best designs for our devoted clientele,” said John Georgiades of Stallion Inc., J.Mendel’s controlling investor who has been running the firm since Marc Durie’s departure as chief executive officer in March 2016.
“I am actively designing our spring 2019 collection and look forward to presenting it in September during fashion week,” said Gilles Mendel, creative director. “The creative team is committed to the brand my family created in St. Petersburg, Russia in 1870.”
The label, best known for its formal women’s wear and gowns that often appear on red carpets, was in court earlier this month over a lease it canceled about a year ago. At the time, Georgiades admitted to owing real estate firm The Arsenal Co. $1.1 million related to the lease of an entire floor in a Midtown building here, where the brand previously kept its headquarters. Georgiades said J.Mendel left the space last year, after signing a 10-year lease in 2013.
The brand had agreed to pay an early termination fee when it approached Arsenal with plans to leave the space and the landlord agreed to collect the fee in monthly installments of $100,000, but only received four payments.
Earlier this year, public relations firm Karla Otto sued the brand, claiming it was owed $260,000 for its work putting on J.Mendel’s first couture show in July 2016 in Paris. Again, J.Mendel had agreed to pay in monthly installments after being unable to pay the amount in full, but Karla Otto claims to have only received three payments before they stopped altogether.
J.Mendel is also being sued by The New York Times for $28,000 owed for advertising; by DNA Model Management for close to $60,000 in unpaid modeling fees; by Er Fur Trading Corp. for $107,500 in animal fur skins, and by e-commerce platform management company Acadaca LLC for about $60,000.
As of 2015, J.Mendel was said to produce about $30 million a year in sales from its ready-to-wear, including fur, along with couture, bridal and accessories lines. But the brand has not released a couture collection since the Paris show at issue in Karla Otto’s suit. J.Mendel also operates a stand-alone boutique in Manhattan and sells to high-end department stores Bergdorf Goodman and Harrods. It was headed for a wider expansion in 2013, when it was backed by Los Angeles-based private equity firm Gores Group, but before a full expansion was realized, the firm sold its stake to Stallion after apparently failing to find a partner with which to run the brand.
With roots in imperial Russia in the 1870s, the house of J.Mendel relocated to New York in the Eighties under Gilles Mendel, a fifth-generation of the founding family.