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BCBG Max Azria files for bankruptcy as retailer seeks turnaround
[NEW YORK] BCBG Max Azria Group Inc filed for bankruptcy as it makes a third attempt in two years to rescue the glitzy fashion house founded by designer Max Azria.
The company's latest turnaround effort began in January when it started closing 120 of its stores, chief restructuring officer Holly Felder Etlin said in court papers filed Wednesday in federal court in Manhattan.
"Like many other apparel and retail companies, BCBG has fallen victim in recent years to adverse macro-trends, including a general shift away from brick-and-mortar to online retail channels, a shift in consumer demographics away from branded apparel," Ms Etlin said.
Some of the company's lenders have agreed to loan the company US$45 million to help it get through bankruptcy. That loan must be approved by the judge overseeing the case. The company owes lenders about US$459 million.
Mr Azria founded the company 1989 and opened its first boutique in Los Angeles in 1992. BCBG, whose name is short for the French expression "bon chic, bon genre", acquired design house Herve Leger in 1998. In August Mr Azria surrendered his majority equity stake as part of a debt restructuring and left the company, Ms Etlin said.
The brand that was long a favorite of red-carpet celebrities suffered amid a retail slump. Kate Winslet, Victoria Beckham and Alicia Keys have worn its fashions, which include cocktail dresses, handbags and other accessories.
After the retailer began to falter, investor Guggenheim Partners brought in fashion consultant Marty Staff as interim chief executive officer, according to an account on his LinkedIn page. He took the reins from Azria last year to help "stabilise" the brand, Staff said.
The Vernon, California-based company has laid off 123 people in recent months, according to a filing with the state's Employment Development Department. The fashion brand has operated more than 570 boutiques worldwide, including more than 175 in the US.