True Religion back in bankruptcy as Covid-19 cripples sales
In this article (5)
Denim apparel retailer True Religion has filed for bankruptcy for the second time within three years.
The brand’s latest crisis was brought on by the coronavirus outbreak, which has seen more than 95 percent of the American market under lockdown. In a statement, True Religion said it had found itself unable to wait out the pause in trading.
The firm’s foremost lenders ABL and Term Loan are investing in the brand’s reorganization efforts under Chapter 11 bankruptcy proceedings, according to CEO Michael Buckley. The firm registered US$100 million in assets against $500 million in liabilities in its court filing this week.
The firm emerged with a streamlined store network and a stronger financial position after its last bankruptcy, which had the support of lenders and came with an exit strategy pre-mapped out.
“In the near term, and until our stores open up, we will be continuing as we have,” said Buckley, “to run our e-commerce businesses in the same way we did prior to filing for Chapter 11”.
Questions & Answers
Q.What specifically caused True Religion to file for bankruptcy a second time?
What specifically caused True Religion to file for bankruptcy a second time?
The brand's latest financial crisis was triggered by the coronavirus outbreak. This led to over 95 percent of the American market being under lockdown, significantly impacting sales and trading.
Q.Who is supporting True Religion's reorganisation efforts during this bankruptcy filing?
Who is supporting True Religion's reorganisation efforts during this bankruptcy filing?
The firm's primary lenders, ABL and Term Loan, are investing in the brand's reorganisation. This support is being provided as True Religion proceeds under Chapter 11 bankruptcy proceedings.
Q.How do True Religion's assets compare to its liabilities according to the court filing?
How do True Religion's assets compare to its liabilities according to the court filing?
True Religion reported US$100 million in assets when it filed its court papers this week. This figure stands against significantly higher liabilities, which were listed as US$500 million.
Q.How will True Religion operate its e-commerce business during this bankruptcy period?
How will True Religion operate its e-commerce business during this bankruptcy period?
CEO Michael Buckley stated that the company will continue to run its e-commerce businesses as it did before filing for Chapter 11. This will remain the case in the near term, until its physical stores can reopen.
Reader pulse
Will True Religion survive this second bankruptcy?
19,718 votes so far