Now ‘True Re­li­gion' boards bank­ruptcy pro­tec­tion band­wagon

Apparel Online - - Retail Current -

America’s iconic denim la­bel, True Re­li­gion Ap­parel Inc., has be­come the lat­est fash­ion re­tailer to have filed for bank­ruptcy pro­tec­tion. The fash­ion brand ex­pects it would take 90 to 120 days to ob­tain con­fir­ma­tion of its pre-ar­ranged plan by the US Bank­ruptcy Court. Through­out the im­ple­men­ta­tion of this process, the pre­mium denim re­tailer will con­tinue to op­er­ate its busi­ness with­out in­ter­rup­tion to cus­tomers, em­ploy­ees and busi­ness part­ners.

“After a care­ful re­view, we are tak­ing an im­por­tant step to re­duce our debt, rein­vig­o­rate

True Re­li­gion’s iconic brand, and po­si­tion the com­pany for fu­ture growth and suc­cess,” said John Er­matinger, Pres­i­dent and CEO of True Re­li­gion, in a state­ment is­sued by the com­pany.

With the bank­ruptcy fil­ing, the up­scale denim maker joins other coun­ter­parts which have fallen out of ‘fash­ion’ in the re­tail mar­ket – Amer­i­can Ap­parel, Pa­paya Cloth­ing, Rue21 and oth­ers as con­sumers are in­creas­ingly shop­ping on­line, turn­ing less to the brick-and-mor­tar spe­cialty shops and depart­ment stores.

The fash­ion mar­ket’s dom­i­nance of on­line re­tail­ers such as Ama­zon has gravely hurt True Re­li­gion which cur­rently op­er­ates around 130 stores that make up for 75-80 per cent of its to­tal re­tail sales. Ad­di­tion­ally, the pricey denim la­bel has tie-ups with depart­ment store chains like Sakes Fifth Av­enue, Nord­strom and Bloom­ing­dale’s which sell its prod­ucts.

Mean­while, the jeans re­tailer re­cently an­nounced its year-to­date ad­justed EBITDA through

May at US $ 7.1 mil­lion, which is 95 per cent more than what it at­tained in 2016. This as­tound­ing progress on the re­tail front will al­low True Re­li­gion to en­ter the next phase of re­cap­i­tal­i­sa­tion process with buoy­ancy as it con­tin­ues to drive the busi­ness for­ward.

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