CERTIFIED FASHION FILES FOR CHAP. 11 REVAMP
NEW YORK — Certified Fashion Guild, a veteran retail buying office and consulting company, has filed a Chapter 11 bankruptcy petition seeking time to reorganize.
Certified, which does business as Certified Worldwide Retail Consultants, 119 West 40 St., is the umbrella company for five other businesses. Paul Kaess, chairman, said Monday that these businesses are doing well and not affected by the filing. “Certified was the funding arm that got these other businesses off the ground, but now it needs to be jump-started,” he said.
In papers filed in Manhattan Bankruptcy Court, the company, which also does business as Youth Fashion World, reported liabilities of $2.6 million, including $2.3 million unsecured, and assets of $615,286.
Although some in the industry felt Certified was starting to show signs of weakness over the last several months, in September the company took the wraps off its new showroom. Kaess, who holds a 50 percent stake in the company, said the firm plans to stay there. Kaess also does not expect any layoffs as a result of the filing. Lee Mandelbaum owns the remaining 50 percent stake.
Kaess said the filing was necessary because of “bad financial advice, internal and external, that prevented us from reacting to the changing retail climate earlier this year.”
“We’re doing this to preserve the five businesses that are doing well,” he said. In court papers, the company said “an undetected breakdown in internal accounting controls coupled with a deterioration of the retail sector” led to the filing.
Certified is just the latest casualty in a decade of retail consolidation. Few buying offices have survived. Among the larger surviving firms are The Doneger Group, which has taken over several weaker buying offices, as well as Associated Merchandising and Frederick Atkins. Kaess, who said in court papers that the company intends to cut overhead and increase sales, said Certified was the umbrella company to CFG Imports, Betty Cohn/Simmons, CFG Purchasing, Deals and Certified Trend Bureau.
Certified is represented by Lazarus & Lazarus. The case is being handled by Judge Tina Brozman.