Fashion house BCBG Max Azria Group LLC filed for bankruptcy protection on Wednesday, the latest casualty in the struggling U.S. retail sector, as shoppers abandon malls in favor of internet shopping.
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The company, known for party dresses worn by celebrities including Selena Gomez and Drew Barrymore, listed assets in the range of $100 million to $500 million and liabilities in the range of $500 million to $1 billion, a filing under Chapter 11 with the U.S. Bankruptcy Court for the Southern District of New York showed. http://bit.ly/2lo7iMI
BCBG Max Group's Canadian affiliate also separately filed for voluntary reorganization proceedings under Canada's Bankruptcy and Insolvency Act, the company said in a statement.
The fashion house has received a commitment of up to $45 million in debtor-in-possession (DIP) financing, which will be used for working capital and to ensure normal operations during the Chapter 11 process, the company said in a statement.
The company is taking steps to close its freestanding stores in Canada and consolidate its operations in Europe and Japan, in addition to the 120 retail stores closed as part of the restructuring efforts.
Reuters had reported last week that BCBG Max Azria Group was preparing to file for bankruptcy.
"The steps we are taking now, to address the shift incustomer shopping patterns and the growth of online shopping, will allow us to focus on our partner relationships, digital, ecommerce, selected retail locations, and wholesale and licensing arrangements," Marty Staff, acting interim chief executive of the company said in the statement.
The reorganization process is expected to be completed within six months and the stores will remain open duringthe process, the company said.
AlixPartners LLP and Jefferies LLC advised the company on its restructuring.
Competing specialty retailers, including The Limited and American Apparel, have also filed for bankruptcy in recent months.
BCBG, an acronym for the French phrase "bon chic, bon genre", a Parisian slang meaning "good style, good attitude", was founded by Tunisian fashion designer Max Azria in 1989. It grew through its retail shops and distribution in department stores including Saks Fifth Avenue and Bloomingdale's.
(Reporting by Vishal Sridhar in Bengaluru; Editing by Amrutha Gayathri)