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BCBG Max Azria has filed for bankruptcy protection.
The filing is the latest step in a restructuring plan aimed at rescuing the business, following the closure of 120 stores.
“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,” said chief restructuring officer Holly Felder Etlin in papers filed with the Federal Court in Manhattan.
As reported in January, the fashion label is crippled with a debt said to be as high as US$665 million. More recent reports say the “secured debt” is worth about $485 million. But its total sales last year were just $600 million. The restructuring plan is dependent on a $45 million loan which must be approved by the court.
The company had embarked on a restructure which would involve slashing its US store network and refocusing on e-commerce and wholesale sales. The company has flagship stores in Tokyo and Hong Kong, but it is the wholesale division which supplies stores bearing the brand’s name in other Asian cities, including Ho Chi Minh City. Retail accounts for 71 per cent of its turnover.
One of BCBG Max Azria’s advisors told landlords in February that its retail sales had declined 20 per cent during the past three years – a major change of fortune for a company which in 2013 was mulling an offer valued at $1 billion.
Under January’s restructure plan, the company was looking at closing 120 of its 200 US stores – but now reports suggest almost all of them will be closed under bankruptcy protection. The company also has mounting debt to landlords in unpaid rent.
BCBG Max Azria Group was founded by Tunian Max Azria in 1989. Educated in France before developing a passion for fashion, he was later based in California where he drove the BCBG Max Azria brand, but he is no longer associated with the company. His brother Serge founded women’s fashion labels Joie, Current/Elliott and Equipment.
Dresses from BCBG Max Azria have been photographed firmly fitting celebrities including Selena Gomez and Drew Barrymore.
BCBG is an acronym for the French phrase “bon chic, bon genre” or “good style, good attitude”.
