Retail Woes: A Fashion & Retail Bankruptcy Tracker

Image: Carven

Retail Woes: A Fashion & Retail Bankruptcy Tracker

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 ...

April 8, 2024 - By TFL

Retail Woes: A Fashion & Retail Bankruptcy Tracker

Image : Carven

Case Documentation

Retail Woes: A Fashion & Retail Bankruptcy Tracker

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 …

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.”

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


Dec. 2023 – Signa Prime Selection AG

Signa Prime Selection AG is the latest Signa subsidiary to seek bankruptcy protection. The company – which maintains stakes in retailers including Selfridges, KaDeWe, and Karsdadt, and owns properties of the Galeria Karstadt Kaufhof department store chain, among others – has filed for bankruptcy and submitted a restructuring plan with the Vienna Commercial Court on December 28. Rene Benko’s group said that Signa Development Selection AG will file for bankruptcy on December 29, following from similar efforts by the group’s online sporting goods division, Signa Sports United, which filed for insolvency in October and Signa Holding, itself, and several smaller subsidiaries, which announced their insolvency in recent weeks.

The group, which “builds and [leases] properties, leaving the retail operations of the department stores to other businesses,” per Reuters, “has recently been beset by the higher building costs, energy prices, and interest rates that have dogged the entire property sector of late, while the brick-and-mortar retail sector is also struggling, partly against online competition.”

Oct. 2023 – Showfields

Showfields filed for Chapter 11 bankruptcy with U.S. Bankruptcy Court in the Eastern District of New York on October 6. The company, which describes itself as “a lifestyle discovery store,” will be restructuring through the Small Business Reorganization Act, Subchapter V, a form of Chapter 11 bankruptcy devised during the COVID-19 era to help small businesses keep operating, reorganize, and maintain control of their finances without creditors taking over, per WWD. The retailer, which first launched in 2019, indicated in its filing that it has “entered into an agreement with the debt-financing company Pipe Technologies Inc. whereby the debtor sold its accounts receivable and recurring revenues to obtain operating capital for its businesses in the aggregate amount of $1.4 million.”

“As with most commercial enterprises established almost immediately prior to and during the covid-19 pandemic, the Debtor was plagued with lower-than-expected revenue streams from the Non-Debtor Stores due to low Member sales resulting from the national lockdown and gradual reopening of public spaces across the country,” the Tal Nathanel-co-founded and led Showfields further stated in its filing. Nathanel said in a statement that the company will focus on its Brooklyn and Washington locations, and finalize the shuttering of its Miami and Manhattan locations. (Its outpost in Los Angeles is not subject to the bankruptcy filing.) The company will use the new funds to pay outstanding bills and increase marketing and expansion of its Brooklyn store, among other things.

Sept. 2023 – Soft Surroundings

Soft Surroundings filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court for the Southern District of Texas in Houston on September 10, citing up to $50,000 in estimated assets and between $50 million and $100 million in estimated liabilities. The St. Louis-based retailer’s parent company Soft Surroundings Holdings LLC says it will close the womenswear company’s 44 leased stores and sell its online and catalog business to Coldwater Creek as part of the Chapter 11 plan. “Over the past year, we have taken significant steps to fortify our financial standing including rightsizing our business to better match current market conditions,” Bridgit Lombard, Soft Surroundings executive chair, said in a statement. “This will allow us to adapt, restructure and emerge more resilient, ensuring the longevity of the beloved Soft Surroundings brand for our customers and partners.”

Jul. 2023 – Julien Macdonald

The eponymous label of Welsh designer Julien Macdonald initiated liquidation proceedings on July 24, citing economic instability. “The business fell into trouble during the Covid pandemic which affected all aspects of the retail sector. Julien Macdonald lost a significant proportion of revenue following the collapse of Debenhams at the end of 2020,” with cashflow issues being “compounded by general inflationary costs, which impacted on all aspects of the business,” FTS Recovery said in a statement. FTS – which has been appointed as the liquidator for the Julien Macdonald company – further stated that “no employees or existing contracts could be saved.” FTS will sell the 25-year-old, London-based company’s remaining inventory and other assets in order to seek repayment for creditors.

Jun. 2023 – Christopher Kane

Christopher Kane has entered into administration and is looking for a buyer, the London-based fashion brand confirmed on June 21. The company – which was launched by its eponymous founder in 2006 – “said the board of Christopher Kane Ltd. has recently resolved to file a notice of intention to appoint FTS Recovery as administrators to hammer out a rescue plan for the company,” WWD reported, noting that the company revealed that “key stakeholders have been notified, [and] a period of accelerated marketing activity will now follow, with a view to locating potential interested parties to either refinance the company’s existing debt, or alternatively locate a purchaser for the business and assets.” French conglomerate Kering acquired a 51 percent stake in Christoper Kane for an undisclosed sum in 2013, and ultimately, sold it back to the brand in 2018. 

Apr. 2023 – David’s Bridal

David’s Bridal, LLC announced on April 17 that the company and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey. The company expects to file a recognition proceeding in Canada and a subsidiary of David’s Bridal expects to commence an administration proceeding for its business in the United Kingdom.

March 2023 – Scotch & Soda

Scotch & Soda has filed for bankruptcy in Netherlands due to “serious cashflow problems” that started as a result of the COVID-19 pandemic and have continued amid high inflation and a consumer spending squeeze, per Reuters. “Despite record sales, a structural cash flow deficit has led to the company’s failure to absorb the negative effects of [COVID-19] and high inflation,” the Amsterdam-headquartered fashion brand said in a statement, noting that its 32 stores in the Netherlands will remain open “for the foreseeable future.” The Sun Capital-owned company earned record revenues of 342.5 million euros in financial results reported for the 2022 fiscal year,”according to Yahoo Finance, but said that the previous two years of pandemic restrictions “affected its business performance and financial health negatively,” promoting its Netherlands-specific bankruptcy filing.

This is a short excerpt from a data set that is published exclusively for TFL Enterprise subscribers. For access to our up-to-date fashion & retail bankruptcies tracker, inquire today about how to sign up for an Enterprise subscription.

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