BCBG Max Azria files for Chapter 11 bankruptcy
- Author: Zachary Reyes Mar 02, 2017,
Mar 02, 2017, 6:10
The competitive apparel market and a touch retail climate overall has claimed another victim.
"The restructuring is meant to facilitate the continued success of these iconic brands through a sale, merger or similar transaction of the Company or its assets, including its intellectual property, or a standalone restructuring, all as contemplated in the chapter 11 plan filed today".
According to court documents, the high-end clothing chain known for cocktail and formal dresses is seeking protection from creditors under Chapter 11 of the US bankruptcy code and Canada's Bankruptcy and Insolvency Act.
While the plan is to stay in business in some form in the USA, "as part of the Canadian proceedings, BCBG Canada intends to liquidate and wind down all of its standalone locations", the company said in a court filing.
In the process, the company has received commitment for $45 million in new financing to fund restructuring efforts, which include a focus on digital, e-commerce and wholesale and licensing agreements.
Fifty-one stores in Canada will be liquidated and closed.
The company is closing stores in Canada and consolidating its European and Japanese operations.
The reorganization process is expected to be completed within six months and the stores will remain open during the process, the company said.
Third time lucky? Hopefully so for the BCBG Max Azria Group Inc., which Wednesday filed for bankruptcy in Manhattan as it makes a third attempt in two years to rescue the fashion house founded by designer Max Azria.
Apparently, BCBG Max Azria already informed shopping malls of its impending store closures, but its owner, investment firm Guggenheim Partners, refused to respond to the rumours. The fashion brand has operated more than 570 boutiques worldwide, including more than 175 in the U.S. But the company has struggled in recent years amid online competition and changing fashion sensibilities, particularly with the advent of cheaper fast-fashions.