15 hours ago | By Sandra Halliday
Jul 05, 2017
By WGSN Insider
Struggling US jeanswear retailer True Religion Apparel has filed for bankruptcy protection, saying it has secured “critical” stockholder support, signing a restructuring agreement with a majority of its lenders.
True Religion filed for creditor protection under Chapter 11 in the US bankruptcy court in the District of Delaware, listing assets and liabilities ranging $100m-$500m.
The restructuring agreement with its lenders, including TowerBrook Capital Partners, will slash its debt by over $350m, the company said in a Wednesday statement.
Throughout the process, True Religion “will continue to operate” its 160-store business “without interruption to customers, employees and business partners,” it said.
“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 CEO John Ermatinger.
“By dramatically improving our capital structure 24 months in advance of our term loan maturity, we will continue business operations as usual and provide our employees and business partners the long-term stability they need, while providing the necessary flexibility to invest in growing our digital footprint, building connections with customers, and improving organisational competencies.”
Ermatinger also said he was “proud to announce” that year to date adjusted ebitda through May at $7.1m, up 95% on a year ago.
“This improved performance will allow us to enter into the next phase of our recapitalisation process with confidence as we continue to execute against our strategic plan and drive the business forward.”
True Religion’s struggles again reflect consumers’ shift to online shopping and away from the brick-&-mortar stores and department stores where the brand is predominantly sold.
In its heyday, True Religion was at the centre of popular culture as celebrities including Katie Holmes and Jessica Simpson endorsed its denimwear.
Moody’s said the True Religion brand had “lost some relevance” since its peak in the mid 2000s, when the jeans were seen as a status symbol.
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