This wasn’t exactly a big year for high-profile, mega bankruptcies in the fashion sector — more likely, come January, it’ll be notable for its retail liquidations.
This story first appeared in the December 19, 2014 issue of WWD. Subscribe Today.
That’s because companies in fashion and retail tend to wait until after the holiday season to file — cash generated from the season can be used to fund the bankruptcy. When companies file before hand, it typically means they are so distressed they just can’t wait any longer.
For some firms, it may make sense to start marketing certain assets, such as leases, early on, before competitors do their annual checks to figure out which units to close.
This year, retailers catering to young adults have been particularly pressured. Many of those consumers find themselves with fewer dollars to spend, and the ones with some cash on hand are instead choosing to buy or upgrade their tech toys.
Already, Dots (filed for Chapter 11 bankruptcy court protection in February) and Coldwater Creek (filed in April) have liquidated. Delia’s Inc. filed earlier this month and is in the process of liquidating all stores. Coldwater Creek’s intellectual property was acquired by private equity firm Sycamore Partners, which owns Talbots, the assets of Jones Group and Hot Topic. The Coldwater nameplate was relaunched by Sycamore in November as an online business.
Still awaiting their fates are Dutch retail brand Mexx and Deb Shops, both of which entered bankruptcy proceedings this month. Mexx will keep its stores open while its bankruptcy counsel tries to find a buyer. Deb Shops has a deal with joint venture partners Hilco Merchant Resources and Gordon Brothers Retail Partners to be the “stalking horse bidder” to sell the retailer’s assets and conduct a going-out-of-business sale. The final fate for Deb Shops — liquidation or a buyer for the operation as a going concern — will be known once the bankruptcy court holds its auction, which will determine if there are any other offers for the company.
Separately, plus-size retailer Ashley Stewart filed for Chapter 11 in March, and a month later was acquired by Clearlake Capital Group.
And although not a fashion brand, but surely a brand in its own right, jeans and urbanwear trade show operator Bread & Butter GmbH filed for insolvency earlier this week. The firm last week canceled its upcoming January edition at Berlin’s Tempelhof airport. The company will be restructured, however. There’s a new Bread & Butter concept in the works for January, although as of press time, details were undetermined.