L’Occitane files for bankruptcy; to reduce store footprint
The U.S. arm of L’Occitane en Provence has filed for Chapter 11 bankruptcy protection as it looks to cut costs and reduce its store portfolio amid pandemic-related business disruption.
The beauty and skincare products retailer said the decisive factor in its decision to file was a failure to come to terms with landlords as “its business continues to be impacted by disproportionately high store rent obligations that are no longer tenable. “(The filing does not include the L’Occitane en Provence brand or any operations outside the U.S.; parent company L’Occitane International S.A.; or any other group subsidiaries.)
“The company determined that a Chapter 11 process was the necessary path to right-size its brick-and-mortar presence following repeated endeavors to engage with its landlords to address unmanageable store lease terms,” L’Occitane said in a statement.
L’Occitane said it has ample liquidity to support ongoing operations across all channels and fulfill commitments to its employees, customers, and suppliers in the ordinary course during the restructuring of its U.S. store lease portfolio. It expects to complete the restructuring shortly.
"Today's action is a pivotal step forward in achieving the full potential of L'Occitane's U.S. business," said Yann Tanini, managing director of L'Occitane North America. "Over the past year, we have moved aggressively to address COVID-related challenges head on, developing innovative new ways to connect with our community and continue to deliver the extraordinary L'Occitane beauty experience that our customers know and love, all while accelerating the essential transformation of our store footprint already underway. We look forward to working collaboratively with our landlords to achieve partnerships that make economic sense in this current retail environment and best position our marquee brand's boutique offering for years to come."
Additional information about L'Occitane's lease portfolio restructuring, including Court filings, is available at cases.stretto.com/LOccitane.
Hilco Real Estate is serving as real estate advisor to the company.