- Angela Gonzalez-Rodriguez |
New York-based athletic apparel firm Yogasmoga has filed for Chapter 11 in a bankruptcy court in Manhattan, following an involuntary chapter 7 bankruptcy in November.
Launched in 2013, Yogasmoga has some 50 to 99 creditors according to the ‘WWD’. The value of its assets is estimated to be somewhere between one and 10 million dollars, reports the ‘Wall Street Journal’, which also points out that the company’s debt is around the same range. The financial journal reported as three creditors say that they are owed 3.2 million dollars.
Despite its pure-digital start, Yogasmoga soon took its yoga clothing to two brick-and-mortar stores in 2015, upping up its physical network in ten shops during the past twelve months. Many stress that the founders’ liking for expensive artisan fabrics and costly photography, together with its rapid expansion set the project to fail.
”Overgrowing” too fast killed Yogasmaga’s future
In a phone interview with Bloomberg, Yogasmoga’s co-founder Rishi Bali admitted the liquidation came as a result of “overgrowing,” specifically failing to raise a new round of capital because there was a big disagreement with its main investor.
“As a founder of the company, I am gutted by the news because it’s really hard to build companies,” he said to Bloomberg. “Due to a combination of factors, we couldn’t close the financing. It was a little bit of overgrowing, and so we are filing so that we can shrink our footprint.”
The brand, known for high-tech fabrics and U.S.-based manufacturing, was on an ambitious growth trajectory, recalls ‘Fast Company’.
The New York-based company’s bankruptcy filing has made the industry wonder whether the athleisure’s bubble is to burst sooner rather than later. Industry’s experts suggest that the athleisure market – valued at 97 million dollars, might be nearing the saturation point.