Upscale fashion retailer files for bankruptcy

The competitive apparel market and a touch retail climate overall has claimed another victim.



BCBG Max Azria Group LLC on Wednesday announced that it taken “the next step in the restructuring of its brands and operations” by filing for Chapter 11 of bankruptcy protection. Earlier this month, the company revealed plans to close 120 stores as part of its restructuring efforts.



The company is also taking steps to close its freestanding stores in Canada, and consolidate its operations in Europe and Japan.



BCBG’s plans going forward include a sale, a merger or a standalone restructuring.



“BCBG is an iconic brand that launched the contemporary sector over 28 years ago," said Marty Staff, acting interim CEO, BCBG Max Azria Group. "The steps we are taking now, to address the shift in customer shopping patterns and the growth of online shopping, will allow us to focus on our partner relationships, digital, ecommerce, selected retail locations, and wholesale and licensing arrangements.”



In its filing, the company listed assets in the range of $100 million to $500 million and liabilities in the range of $500 million to $1 billion.



BCBG’s Canadian affiliate also separately filed for voluntary reorganization proceedings under Canada’s Bankruptcy and Insolvency Act.



The fashion brand said it has obtained a commitment of $45 million in debtor-in-possession financing, which will be used for working capital and to ensure normal operations during the Chapter 11 process.



The company expects to complete its restructuring within six months, during which time it will remain open for business.



“We expect to maintain the personalized level of customer service to our customers at each of our in-store boutiques, stand-alone retail stores, and online platform throughout this process," said Staff. "BCBG will continue to work with its partners and other wholesale and licensing arrangements to strengthen our brands to meet customers' tastes and shopping styles."



BCBG, founded by designer Max Azria in 1989, shot to fame as a favorite of celebrities. It once operated more than 570 stores worldwide, with some 175 in the United States. But the company has struggled in recent years amid online competition and changing fashion sensibilities, particularly with the advent of cheaper fast-fashions.