Seeking to Decrease Debt by over 75% or $350 Million through Personal bankruptcy Filing; Cancel 18 Store Leases
Denims seller True Religious beliefs Garments Inc., filed a voluntary Chapter 11 petition in the United States Insolvency Court and expects to obtain verification of its pre-arranged reorganization plan in 3 to 4 months.
The Los Angeles-based merchant has protected financier support for a thorough monetary recapitalization from a substantial majority of its loan providers and its sponsor, TowerBrook Capital Partners.
The company plans to cut its financial obligation by over $350 million and transform it into the significant bulk of the restructured company’s equity. As part of the plan, True Faith is looking for to cancel leases on 18 shops in a few of the toniest markets in the country, consisting of primarily street-front shops.1122 Third Ave., New York, NY
1604 Walnut St., Philadelphia, PA 19103
513-515 Broadway, New york city, NY
863 Broadway, New York, NY
The Shops at Columbus Circle, New york city, NY
644 Collins Ave., Miami Beach, FL
Bellevue Square, Bellevue, WA
119 Newbury St., Boston, MA
3838 Cross Creek Road, Malibu, CA
Kenwood Towne Centre, Cincinnati, OH
Broadway Plaza, Walnut Creek, CA
Montgomery Shopping mall, Bethesda, MD
Northpark Center, Dallas, TX
14 Wall St., New york city, NY
Short Pump Town Center, Richmond, VA
5233 Alcoa Ave., Vernon, CA
Town Center at Boca Raton, Boca Raton, FL
Southlake Town Square, Southlake, TX
The reorganization plan provides for complete payment of claims of Real Religious beliefs’s trade financial institutions, that includes continuing landlords.
“After a cautious review, we are taking an important step to decrease our debt, reinvigorate True Faith’s renowned brand and place the business for future growth and success,” stated John Ermatinger, CEO of Real Religion. “I am likewise happy to announce that year-to-date adjusted EBITDA through May at $7.1 million is up 95% versus in 2015. This enhanced efficiency will allow us to participate in the next stage of our recapitalization process with confidence as we continue to perform versus our strategic plan and drive the business forward.”
Globally, the business has 140 Real Religion and Last Stitch retailers and over 1,900 workers. For the ended Jan. 28, 2017, the business reported total possessions of $243.3 million against $534.7 million of liabilities.
For the 12 months ended then, the company produced $369.5 million of net revenue and published a net operating loss of $78.5 million.
Like numerous other nationwide merchants such as Quicksilver, Pacific Sunwear, American Apparel, Aeropostale, and BCBG, to name a few, the company has been adversely impacted by a macro consumer move far from brick-and-mortar to online retail channels, among other factors, leading to current losses, inning accordance with True Religious beliefs CFO Dalibor Snyder in bankruptcy court filings.
In addition, the premium denim market section of the fashion industry where the business operates has actually been in decline over the last several years, compounding the negative effect on the business’s sales.
As an outcome, over the previous several years, the business has strongly cut costs and taken other internal restructuring measures, consisting of 3 reductions in force and a number of closures of underperforming shops, and explored lots of alternatives to loosen existing liquidity.