US-based Sequential Brands Group, the parent of brands like Joe’s Jeans and the Jessica Simpson fashion collection, recently filed for Chapter 11 bankruptcy protection in Wilmington, Delaware, after the apparel industry was severely hit by shifting consumer habits and the pandemic. The company plans to hold an auction as part of a deal with so-called Term B lenders.
The company listed debts worth $435 million and assets amounting to $443 million in court papers, saying it has arranged a $150-million loan to help fund its reorganization, a global newswire reported.
That loan and the rules for the proposed auction must be approved by the judge overseeing the case.
Several retailers that carry Sequential’s brands were closed for part of last year, affecting revenues. Late last year, the company said it was considering a sale as part of a broad ‘exploration of strategic alternatives’ to maximise shareholder value. It unloaded its Heelys sneaker brand in April for $11 million.
In December last year, the US Securities and Exchange Commission charged Sequential with violating anti-fraud, reporting, books and records and internal controls provisions of federal securities laws related to goodwill accounting in 2016 and 2017.
Among the biggest owners of the company is Martha Stewart Family Limited Partnership with nearly 11 per cent, according to court documents.
Fibre2Fashion News Desk (DS)
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