True Religion Is Living on a Prayer
Posted: Monday, July 10th, 2017 at 12:19 am
According to court documents submitted by True Religion on Wednesday the maker of designer jeans has filed for bankruptcy. They are planning to do a redo of itself to wrestle with the hundreds of millions in debt including declining sales.
In the court documents the company has liabilities in the amount of $534.7 million and only $243.3 million in assets.
However, there is a light at the end of the tunnel. In a press release from True Religion they said the company has already agreed to a deal with their creditors to reduce it’s debt by $350 million. As part of the agreement the creditors will receive huge stakes in ownership of the company.
The company plans to stay afloat during the Chapter 11 bankruptcy proceedings, True Religion says it expects the court to approve the plan to restructure within the next three to four months.
The jean designer plans to “close or consolidate underperforming store locations, and renegotiate lease terms” in order to help improve the outlook and increase savings.
John Ermantinger, CEO said, “invest in growing our digital footprint” as a plan to restructure the company.
There are many retail companies that have been overturned by the rise of e-commerce, True Religion is not the first or the only retailer struggling.
As digital power houses such as Amazon soar in this digital era many traditional retail department stores or brick and mortar stores struggle.
In this year alone Amazon has hit a record high with their stock. More than 300 other retailers have unfortunately filed for bankruptcy and the entire industry has already experienced many layoffs.
True Religion broke into the fashion industry well before online retail was more popular. It was founded in 2002 in Los Angeles and the designer jeans grew quickly into a pop culture favorite. True Religion as a brand was made popular by hip hop lyrics and appearances in fashion magazines.
Unfortunately, the court documents state that today True Religion’s popularity has collapsed and the sales have been declining every year.
Dalibor Snyder, True Religion’s CFO stated the company has tried to “aggressively cut costs,” they have issued layoffs and store closures but it was not enough to minimize losses.
The next step was restructuring and bankruptcy protection. True Religion hopes to reduce is debt by 72% if the restructuring plan is successful according to Snyder.
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