BCBG Azria files for bankruptcy as its eleventh hour attempt to recover

Third time lucky? Hopefully so for the BCBG Max Azria Group Inc., which Wednesday filed for bankruptcy in Manhattan as it makes a third attempt in two years to rescue the fashion house founded by designer Max Azria.

In a statement, the company’s first executive explains that “The chapter 11 filing will further aid the implementation of these steps and overall strategy while we explore opportunities to recapitalise the Company and profitably expand our international footprint."

“Like many other apparel and retail companies, BCBG has fallen victim in recent years to adverse macro-trends, including a general shift away from brick-and-mortar to online retail channels, a shift in consumer demographics away from branded apparel,” the fashion company’s CEO Holly Felder Etlin said in court papers filed Wednesday in federal court in Manhattan.

"The steps we are taking now, to address the shift in customer shopping patterns and the growth of online shopping, will allow us to focus on our partner relationships, digital, e-commerce selected retail locations, and wholesale and licensing arrangements,” further added Etlin.

BCBG Azaria files for Chapter 11 in the U.S. and seeks voluntary reorganisation in Canada

“The restructuring is intended to facilitate the continued success of these iconic brands through a sale, merger or similar transaction of the Company or its assets, including its intellectual property, or a standalone restructuring, all as contemplated in the chapter 11 plan filed today. The Company's Canadian affiliate is commencing a separate filing for voluntary reorganisation proceedings under Canada's Bankruptcy and Insolvency Act,” advanced the company in a statement.

The case is In re: BCBG Max Azria Global Holdings, LLC, 17-10466, U.S. Bankruptcy Court, Southern District of New York (Manhattan.)

It’s worth recalling how, after the retailer began to falter, investor Guggenheim Partners brought in fashion consultant Marty Staff as interim chief executive officer to help “stabilize” the brand, recalls Bloomberg. The company expects to complete its reorganisation within six months and will keep its stores open in the process.

The California-based company’s latest turnaround effort began in January when it started closing 120 of its stores. In recent months, the fashion label has laid off over 120 people, according to a filing with the state’s Employment Development Department.

Some of the company’s lenders have agreed to loan the company 45 million dollars to help it get through bankruptcy. That loan must be approved by the judge overseeing the case. The company owes lenders about 459 million dollars.

Max Azria founded the company 1989 and opened its first boutique in Los Angeles in 1992. BCBG, whose name is short for the French expression “bon chic, bon genre,” acquired design house Herve Leger in 1998. In August Azra gave in his majority equity stake as part of a debt restructuring and left the company, Etlin.

Image:BCBG Azaria Web