True Religion apparel becomes the next retailer to file for bankruptcy
When Moody’s published their list of retailers who had strong potential to go bankrupt in 2017, the ratings agency may not have fully understood how prescient their forecasts were to be. Â This is because in just the past two months, Rue 21, Gymboree, and a large restaurant conglomerate have all defaulted on debt payments and have been forced to seek bankruptcy protection.
Now on July 5 we can add another apparel company to the list as True Religion filed their own paperwork today seeking protection from their creditors.
Nearly one year after rumors about its upcoming bankruptcy first emerged, overnight US-based denim retailer True Religion Apparel finally threw in the towel when it filed for bankruptcy protection, signing a pre-packaged restructuring agreement with most of its lenders.
True Religion, a company whose denims Reuters says have “gradually fallen out of style”, filed for Chapter 11 creditor protection in the U.S. bankruptcy court in the District of Delaware (case Case 17-11463), and listed assets and liabilities in the range of $100 million to $500 million (see full filing below).Â According to the prepack agreement agreed upon by lenders, including TowerBrook Capital Partners, will slash the company’s debt by over $350 million. The jean vendor also said it has secured DIP financing from Citizens Bank for up to $60 million.
True Religion Brand Jeans is pleased to announce it has secured critical stakeholder support for a comprehensive financial recapitalization of the Companyâ€™s capital structure. In signing a Restructuring Support Agreement (â€śRSAâ€ť) with the substantial majority of its Term Loan Lenders and its Sponsor, TowerBrook Capital Partners, the Company will reduce its debt by over $350 million and convert it into the substantial majority of the reorganized Companyâ€™s equity. To implement the terms of the pre-arranged restructuring expeditiously, the Company filed a voluntary Chapter 11 petition in the United States Bankruptcy Court for the District of Delaware, and expects it will take 90 to 120 days to obtain confirmation of its pre-arranged plan by the Bankruptcy Court. Throughout the implementation of this process, True Religion will continue to operate its business without interruption to customers, employees and business partners. –Â Zerohedge
Moodyâ€™s list of retail chains that have strong potential for default:
- Boardriders SAÂ â€“ sporting subsidiary of Quiksilver
- The Bon-Ton Stores â€“ parent of department store chain
- Fairway Group Holdings â€“ food retailer
- Tops Holding II â€“ supermarket operator
- 99 Cents Only Stores â€“ discount retailer
- TOMS Shoes â€“ footwear company
- Davidâ€™s Bridal â€“ wedding dresses and formalwear seller
- Evergreen AcqCo 1 LP â€“ parent of thrift chain Savers
- Charming Charlie â€“ womenâ€™s jewelry and accessories
- Vince LLC â€“ clothing retailer
- Calceus Acquisition â€“ owner of Cole Haan footwear firm
- Charlotte Russe â€“ womenâ€™s clothing
- Neiman Marcus Group â€“ luxury department store
- Sears Holdings â€“ owner of Sears and Kmart. (Closed numerous stores already this year)
- Indra Holdings â€“ holding company owner of Totes Isotoner
- Velocity Pooling Vehicle â€“ does business as MAG, Motorsport Aftermarket Group
- Chinos Intermediate Holdings â€“ parent of J. Crew Group
- Everest Holdings â€“ manages Eddie Bauer brand
- Nine West Holdings â€“ clothing, shoes and accessories
- Claireâ€™s Stores â€“ accessories and jewelry
- True Religion Apparel â€“ menâ€™s and womenâ€™s clothing (filed for bankruptcy protection on July 5)
- Gymboree â€“ childrenâ€™s apparel (already preparing to file for bankruptcy protection)
Kenneth Schortgen JrÂ isÂ a writer forÂ The Daily Economist,Â Secretsofthefed.com,Â Roguemoney.net, andÂ Viral Liberty, and hostsÂ the popularÂ youtube podcastÂ on Mondays, Wednesdays and Fridays.Â Ken can alsoÂ be heard Wednesday afternoons giving an weekly economic report on theÂ Angel Clark radio show.