BCBG Max Azria filed for bankruptcy protection Wednesday. Above, the company’s spring 2016 collection modeled during Fashion Week in New York. (Richard Drew / AP)
BCBG Max Azria Group, the once-glamorous retailer that has dressed the likes of Drew Barrymore and Kate Winslet, filed for bankruptcy protection Wednesday.
The Los Angeles company is just the latest high-profile local clothier to file for Chapter 11 bankruptcy, following closely on the heels of American Apparel and Nasty Gal. All have suffered as shoppers turned both increasingly online and to fast-fashion rivals that deliver trendy clothes at a low price.
Holly Felder Etlin, BCBG’s chief restructuring officer, said the company “has fallen victim in recent years to adverse macro-trends.”
Those trends include “a general shift away from brick-and-mortar to online retail channels” and “a shift in consumer demographics away from branded apparel,” Etlin wrote in bankruptcy documents.
As part of restructuring efforts, the company closed 120 U.S. stores earlier this year. BCBG is also beginning to close freestanding stores in Canada and consolidating operations in Europe and Japan.
BCBG laid out two versions of its future: a sale in a court-supervised auction in May or a debt-for-equity swap with its debtors. The company has secured $45 million in new financing to keep the business running while in Chapter 11 proceedings.
Marty Staff, acting interim chief executive, said BCBG is working to address the way consumers shop now. The company has failed to set up a large presence on the Web, and e-commerce sales are “a small proportion” of its overall business, bankruptcy documents said.
“Fully exploiting the growth of online retail remains an ongoing process,” according to the documents.
It’s a long fall for BCBG, which was founded in 1989 by designer Max Azria. The name — an acronym for the French phrase “bon chic, bon genre,” which means “good style, good attitude” — was synonymous at one point with a kind of trendy sophistication at a reachable price. It was many teenagers’ go-to destination for prom dresses and party frocks.
In 1998, BCBG gained even more fashion credibility by acquiring design house Herve Leger, best known for expensive and skintight bandage dresses.
But the company has been struggling in recent years.
In 2015, BCBG got a $135-million cash infusion and also restructured its debt. In August, as part of further debt restructuring, Azria lost his majority equity stake and stepped down as CEO, the documents said.
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