Perfumania Holdings has moved swiftly through its bankruptcy process and is set to emerge as a smaller, private retailer.
Perfumania filed for bankruptcy protection with total assets of $307.4 million and liabilities of $253.9 million, putting it in a much better financial state than many of the retailers to file bankruptcy as of late.
As the company said at the time, all Perfumania vendors are set to be paid in full, but all of the company’s stock will be canceled as part of its plan to go private. Shareholders are being offered $2 per common share, a deal that’s being financed through an equity infusion “from certain current shareholders and holders of its unsecured debt,” Perfumania said.
Wells Fargo was Perfumania’s debtor-in-possession lender during the bankruptcy process.
The company is also closing an unspecified number of 226 stores, which are mainly based in malls. Perfumania has said fewer stores will allow more resources to be invested in its online platform.
Representatives of the retailer could not be reached for comment.
Perfumania’s reorganization does not include its affiliate wholesale business, Parlux, which holds distribution rights for the celebrity fragrances of Rihanna and Jessica Simpson and President Trump, and his daughter and presidential adviser Ivanka Trump.
Perfumania’s quick emergence from bankruptcy follows that of denim brand True Religion, which went from filing to plan confirmation in only three months. Both cases are unusual in bankruptcy, which tend to be slowed down by creditor fights and asset sales.
The denim brand had been on credit watchlists for several months given its high level of debt, which tallied $493 million when it decided in July to file for bankruptcy protection.
True Religion was over leveraged by private equity firm TowerBrook Capital Partners after it in 2013 acquired the brand for $835 million.
The reorganization saw the brand’s balance sheet deleverage by 71 percent, according to filing by chief financial officer Dalibor Snyder, cutting True Religion’s debt to $139.5 million.
Plenty of other retailers are facing their own problems with massive debt linked to their private equity backers, and bankruptcy has claimed a string of companies over the past year. Those that have filed Rue21, BCBG Max Azria, Payless, Gymboree Corp., True Religion, Gordmans Stores, Agent Provocateur and Sears Canada, which cast an even darker cloud over its struggling former parent company Sears Holdings.
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