U.S. denim retailer True Religion Apparel said on Wednesday it filed for bankruptcy protection and signed a restructuring agreement with a majority of its lenders.
True Religion, a company whose denims have gradually fallen out of style, filed for creditor protection under Chapter 11 in the U.S. bankruptcy court in the District of Delaware, and listed assets and liabilities in the range of $100 million to $500 million.
The restructuring agreement with lenders, including TowerBrook Capital Partners, will slash the company's debt by over $350 million, it said in a statement.
"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," True Religion Chief Executive John Ermatinger said in a statement.
True Religion said its trade creditors critical to the business were expected to be paid in full and the company would continue to operate business as usual.
The denim retailer's financial struggles are due in part to consumer tastes shifting toward online shopping and away from the brick-and-mortar shops and department stores where the company's jeans have been primarily sold.
True Religion has secured post-petition debtor-in-possession (DIP) financing from Citizens Bank for up to $60 million, the retailer said.
The restructuring plan provides for full payment of claims of True Religion's continuing trade creditors, which includes continuing vendors, suppliers and landlords.
True Religion said the pre-arranged plan could take about 90 to 120 days to receive confirmation from the bankruptcy court.
Reuters reported in October that the retailer had hired a legal adviser to explore several debt restructuring options.
(Reporting by Subrat Patnaik in Bengaluru; Editing by Amrutha Gayathri)