On the heels of an array of fashion and retail bankruptcy filings that began to unfold over the course of the year in 2016, New York-based designer Bibhu Mohapatra and retailers The Limited, Wet Seal, and Payless all made headlines when they filed for Chapter 11 protection in early 2017. They were swiftly followed by a handful of additional filings by other retailers, signaling that there is no end in sight to the constant string of fashion and other retail companies struggling financially and looking to bankruptcies courts for protection from their creditors.
For the uninitiated, Chapter 11 bankruptcy – one of the most commonly utilized forms of bankruptcy – allows a company to continue operating while it executes a reorganization plan. Chapter 11 can take a number of forms, but in short: A chapter 11 case begins with the filing of a petition with the bankruptcy court by the debtor (the entity that owes the debt – aka the retailers in the cases at hand). This is followed by the debtor proposing and executing a reorganization plan, which may be used to compromise or even eliminate certain classes of debt.
All the while, the debtor usually remains in possession of his assets and continues to operate any business, subject to the oversight of the court and the creditors committee. Typically, a company that has filed for Chapter 11 bankruptcy trying to stay in business, and as indicated below, this complex proceeding can be very effective in solving short term business problems in an otherwise viable company or winding down a company with valuable assets. (Also included below are instances in which brands have entered into administration, an insolvency process in the United Kingdom by which a company is “placed under the control of an insolvency practitioner to enable the insolvency practitioner to achieve objectives laid down by statute.”)
Fashion and Retail-Related Bankruptcies
Here is a look at some of the most recent fashion and retail-related bankruptcy filings …
January 2025 – Dancing Leopard
Womenswear brand Dancing Leopard has been placed in administration, with Birmingham-based insolvency firm Sanderlings slated to handle the proceedings. Founded in 2009 by Jade Hildreth and Jack Burrows, the British e-commerce company reported in financial documentation for the fiscal year ending on March 31, 2023, “The directors are aware that cash in the company has declined significantly in the year following a decrease in turnover and increase in expenses due to an operational change.”
2024
November 2024 – New Guards Group
New Guards Group has filed for bankruptcy protection in Italy as it continues to search for a buyer in the wake of its owner Farfetch being bought out by Coupang in a rescue deal late last year. The Italian fashion production and distribution holding company – which owns an array of brands including Marcelo Burlon County of Milan, Palm Angels, Heron Preston, Alanui, Peggy Gou, and Ambush, as well as the license for Off-White – is seeking bankruptcy protection in Italy in order to restructure. (Composizione negoziata per la soluzione della crisi dímpresa (“CNC”) proceedings enable financially stressed companies in Italy to undergo a restructuring process while still in operation similar to Chapter 11 proceedings in the U.S.)
In a statement, an New Guards Group spokesman said, “NGG has applied for a CNC according to Italian legislation, aiming to restructure financially in order to avoid filing for bankruptcy. The CNC will allow NGG to continue doing business with its partners and clients.”
October 2024 – Y/Project
Y/Project has been put up for sale after entering into administration in late September. The Paris-based fashion brand, which was founded in 2010 by Gilles Elalouf and Yohan Serfaty, is owned by the French firm In-Carnation. The company ceased payments to creditors in September amid financial tensions; it was placed in receivership on September 26 and appointed a judicial administrator, who has set a deadline of October 16 for interested parties to submit an offer for the company.
Hong Kong-based asset management firm AA Investments reportedly lodged a €45,000 EUR bid, but a deal did not come into fruition.
UPDATED (January 9, 2025): Y/Project announced that it will shutter operations after failing to secure new ownership. In a statement to WWD the company announced, “After 14 fruitful years, Y/Project has made the challenging decision to stop operations. Y/Project and the team thank all partners and supporters for their unwavering dedication to the brand throughout the years. Special thanks to Glenn Martens, Pascal Conte-Jodra, and the late Gilles Elalouf for giving their team the space to create and grow.”
August 2024 – Avon Products Inc.
Avon Products Inc. filed for bankruptcy in Delaware on August 13 in connection with the more than 300 lawsuits it is facing related to claims that its talc-based products contain cancer-causing asbestos. Avon’s Chief Restructuring Officer Philip Gund confirmed in a filing with the U.S. Bankruptcy Court in Delaware that Avon is currently facing 386 talc-related lawsuits. The bankruptcy is limited to the cosmetics giant’s “non-operational”U.S. holding company, Avon Products; its operating businesses and international operations are not part of the bankruptcy proceedings.
May 2024 – Dion Lee
Dion Lee entered voluntary administration on May 23. “Antony Resnick of insolvency firm dVT Group has been appointed administrator to the Australian arm of the 15-year-old brand, which operates six stores in Australia and one in America,” according to Australian Financial Review, which notes that a full creditors report is being prepared, with a creditors meeting expected to be held in the coming weeks. “We are in the very early stages of our administration process and our focus right now is on speaking with the Australian and US-based team and getting across all the relevant operational and financial data,” Resnick said, noting that “it is too early to comment in any detail on [Dion Lee’s] current financial position other than to say our intention at this time is to operate the brand as a going concern.”
May 2024 – Esprit Europe GmbH
Esprit Europe GmbH and six other German companies of the fashion group are filing for insolvency under self-administration, per Reuters, on the heels of the apparel retailer’s subsidiaries in Belgium and Switzerland filing for bankruptcy in March. Operations for Esprit Europe GmbH and the other German entities will continue “until further notice,” the group said.
May 2024 – Rue21
Rue21 has filed for bankruptcy protection for the third time since 2003, listing assets and liabilities of between $100 million and $500 million each in a Chapter 11 filing with the U.S. Bankruptcy Court in the District of Delaware on May 2. The Warrendale, Pennsylvania-based teen-focused retailer, which is owned by Blue Torch Capital, plans to shut down its 540 stores (following going-out-of business sales that it plans to run over the next 4 to 6 weeks) and sell its intellectual property.
Apr. 2024 – Express Inc.
Express Inc filed for Chapter 11 bankruptcy with the U.S. Bankruptcy Court for the District of Delaware on April 22, citing assets and liabilities in the range of $1 billion to $10 billion. The Columbus, Ohio-headquartered retail chain, which owns Express, Bonobos and UpWest Express, confirmed that it will close almost 100 of its 500-plus Express stores and all of its UpWest stores. Express announced that it has received a non-binding letter of intent from a consortium led by WHP Global, and participants, including a wholly owned indirect subsidiary of Simon Property Group, L. P. and Brookfield Properties, for the potential sale of a substantial majority of the Company’s retail stores and operations. The mall retailer said that it and its subsidiaries have filed voluntary Chapter 11 petitions in order to “facilitate the sale process, Express.”
UPDATED (Jun. 14, 2024): Phoenix Retail, a joint venture between equity investor WHP Global and mall owners Simon Property Group and Brookfield Properties, received approval from a bankruptcy court in Delaware to acquire most of the assets of Express.
Apr. 2024 – Esprit Belgie Retail
Esprit’s Belgium subsidiary, Esprit Belgie Retail, has filed for bankruptcy, citing rising costs and cash flow issues. The fashion retailer, which is listed on the Hong Kong Stock Exchange, filed for the commencement of insolvency proceedings for its subsidiary with a court in Belgium on April 8. “Esprit said its Europe retail business operations were under stress because of high energy and logistics costs and weak consumer sentiment. In late [March], the fashion retailer’s Swiss unit had filed for insolvency,” the Wall Street Journal reported, noting that the retailer is “focusing on a comprehensive reorganization to strengthen the business with wholesale and franchise partners.”
Mar. 2024 – MATCHES
Frasers Group announced that it has put MATCHES into administration in the United Kingdom, not long after it acquired the online fashion platform from Apax Partners in December 2023 for about £52 million ($66.59 million). Mike Ashley-owned Frasers Group said in a statement on March 7 that the more than 30-year-old MATCHES had “consistently missed its business plan targets” and was making “material losses.” Given that “continued funding requirements would be far in excess of amounts that the Group considers to be viable,” Frasers said it had decided to shutter the company and place it into administration, noting that while “MATCHES’ management team has tried to find a way to stabilize the business, it has become clear that too much change would be required to restructure it.”
Feb. 2024 – Re:NewCell AB
Swedish textile recycling company Renewcell has filed for bankruptcy. In a release on February 25, the Stockholm-headquartered pioneer in “textile-to-textile recycling” revealed that it had been negotiating with its two largest shareholders, Swedish fast-fashion giant H&M and materials company Girindus, as well as existing lenders BNP Paribas, European Investment Bank, Finnerva, Nordea and AB Svensk Exportkredit, in order to avoid bankruptcy. However, the company – which garnered headlines thanks to its production of Circulose, a textile pulp made from chemically recycled cotton waste – stated that “it is now clear that these discussions have not resulted in a solution which would provide Renewcell with the necessary liquidity and capital to ensure its operations going forward.”
UPDATED (Jun. 4, 2024): Sweden-based investment firm Altor has acquired the assets of Renewcell, the Swedish cotton textiles recycling company. The terms of the deal have not been disclosed. “This acquisition marks a new chapter for Renewcell, now renamed Circulose,” Renewcell stated on its website. “With Altor’s ownership, there is secure financing for the future of Circulose, ensuring that the company’s pioneering cotton recycling technology continues to thrive on a global scale.”
Feb. 2024 – The Body Shop
The Body Shop collapsed into administration in the United Kingdom on February 13. The administration filing comes almost three months after the cosmetics, skincare and fragrance company company was acquired by German private equity company Aurelius for £207 million. “Aurelius confirmed it had appointed the accounting firm FRP Advisory as the ad
This is a short excerpt from a data set that is published exclusively for TFL Pro+ subscribers. For access to our up-to-date fashion & retail bankruptcies tracker, inquire today about how to sign up for a Professional subscription.
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