BCBG Max Azria Files For Bankruptcy

Tyler Durden's picture

If a decade ago, someone had said that BCBG Max Azria would file for bankruptcy before perpetual insolvency candidate Sears, they would be laughed out of the room, and yet overnight it was the fashion house that submitted a voluntary petition for Chapter 11 bankruptcy at the infamous courthouse on the southern tip of Manhattan. The company, known for party dresses worn by celebrities including Selena Gomez and Drew Barrymore, became the latest casualty of the struggling US retail sector. It listed assets in the range of $100 million to $500 million and liabilities in the range of $500 million to $1 billion.

The fashion house, which ironically was on the verge of bankruptcy during the peak of the financial crisis in February 2009 - and survived - yet was unable to do so the second time around, when allegedly the economy is in a full blown recovery, received a DIP loan commitment of up to $45 million, which will be used for working capital and to ensure normal operations during the Chapter 11 process, the company said in a statement.

As part of the bankruptcy process, the company is taking steps to close its freestanding stores in Canada and consolidate its operations in Europe and Japan, in addition to the 120 retail stores closed as part of the restructuring efforts. Reuters had reported last week that BCBG Max Azria Group was preparing to file for bankruptcy.

"The steps we are taking now, to address the shift incustomer shopping patterns and the growth of online shopping, will allow us to focus on our partner relationships, digital, ecommerce, selected retail locations, and wholesale and licensing arrangements," Marty Staff, acting interim chief executive of the company said in the statement.

The reorganization process is expected to be completed within six months and the stores will remain open duringthe process, the company said. AlixPartners LLP and Jefferies LLC advised the company on its restructuring.

BCBG is the latest high fashion retailer to fold: competing specialty retailers, including The Limited and American Apparel filed for bankruptcy in recent months. BCBG, an acronym for the French phrase "bon chic, bon genre", a Parisian slang meaning "good style, good attitude", was founded by Tunisian fashion designer Max Azria in 1989. It grew through its retail shops and distribution in department stores including Saks Fifth Avenue and Bloomingdale's.

Full bankruptcy filing below

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thecondor's picture

Over priced Chinese shit. Thin the retail herd.

City_Of_Champyinz's picture

One fucking billion in liabilities? How much of that shit went to buy backs? hahahaha

prime american's picture
prime american (not verified) City_Of_Champyinz Mar 2, 2017 4:02 AM

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2jdTzrM

aliens is here's picture

Someone is peddling fiction here. It's fake news the economy is so good Obama say so.

Richard Whitney's picture

Now what will my wife wear at Hillary's trial?

booboo's picture

sackcloth and ashes for the sympathy vote.

peippe's picture

who else thought this BCBG whatever was/is a brokerage house?

 

khakuda's picture

There is no way that most traditional retailers can survive with the cost of rents, insurance, taxes, staffing, etc.  To make it, they have to charge prices that people can't afford.  And, the rents just keep going up.

They are competing with an Amazon robot that pulls an item off the distribution center rack in low cost Buttfuck, PA and gets it to you in 2 days.  You don't have to hunt around like an idiot and waste a weekend to find what you want, only to find it out of stock.

You figure the only thing left will be things like barbers and restaurants, but even some restaurants can't afford rents:

Here is an extreme example in NYC:  https://www.dnainfo.com/new-york/20170301/upper-east-side/mon-petiti-caf...

adr's picture

If you can't make it charging $200 for something made for $10 in Vietnam, you don't deserve to make it. 

Or maybe you shouldn't charge $200 for something made for $10 in the first place. 

What I don't get is how Chapter 11 barely means anything anymore. Discharge your debt, reorganize or whatever, and keeo going and do the same thing every few years. It is just another scam. 

 

Misty 34's picture

"Mart Staff CEO" again!!!   This guy has kiled more "wholesalers" than can be counted. Chalk up

another one. Hey Marty , American Apparel is calling .

Make_Mine_A_Double's picture

Definitely a 'canary in the coalmine' indicator for retail when slut wear merchants start to go under. Slut wear is typically immune to eco cycles.

Northern Lights's picture

I heard different.  Many studies proclaimed that when the economy is running well and most have good jobs, women tend to wear shorter skirts.  When the economy is tanking and job prospects are poor, women dress more conservatively.  If slut wear sales are falling, then the economy is in the shitter.

Make_Mine_A_Double's picture

Point taken and BCBG's demo is late 20s-30 past prime sluts.

My true metric is L Brands - if Victoria sales of leopard print split crotch panties and see through day glo pink bras for 14 year olds go down than head for the hills. Teen slag sales have been bullet proof for 20 years.

Last of the Middle Class's picture

So basically, he, she or it, pissed it all away is what you're saying.