Plus-size apparel retailer gets ready for Chapter 11 filing

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Plus-size apparel retailer gets ready for Chapter 11 filing

By Deena M. Amato-McCoy - 01/04/2019
FullBeauty Brands is preparing to file for bankruptcy, however it is eyeing a quick recovery.

The plus-size apparel retailer has teamed up with key stakeholders, including its equity sponsors, Apax Partners and Charlesbank Capital Partners, to create a comprehensive restructuring support agreement that will slash the company’s outstanding debt by approximately $900 million. The company plans to file for Chapter 11 protection in the United States Bankruptcy Court for the Southern District of New York, following expiration of the solicitation period around Jan. 24.

While the company could file for bankruptcy as soon as Feb. 4, according to Bloomberg, FullBeauty expects to emerge from bankruptcy “shortly after filing.”

According to the restructuring plan, about 87.5% of the common reorganized equity would go to first-lien lenders, 10% to second liens, and 2.5% to the sponsor, sources familiar with the situation told Bloomberg.

The financial plan coincides with FullBeauty’s other turnaround efforts, which includes appointing a new senior management team, improving merchandise assortments, expanding distribution initiatives, and bolstering the customer experience, according to the company.

The company will continue to operate normally during the restructuring process. Its websites and social media pages will remain open for business, and it will continue to receive goods and ship customer orders as usual.

FullBeauty also continues to have adequate funds to meet its financial obligations to vendors, suppliers, and employees, and expects to continue making payments to these parties without interruption in the ordinary course of business, according to the company.

"The agreement with our lenders and equity holders represents their support of FullBeauty's future success,” said Emilie Arel, the company’s CEO. “We are fortunate that FullBeauty has highly relevant brands and a dedicated customer base and I am confident that the outcome of this process will be a more sustainable and stronger company for our customers, employees, vendors and business partners."

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