The deadly coronavirus hasn’t spared denim industry as well!
The denim bigwigs G-Star Raw Retail Inc. and Lucky Brand Dungarees filed for bankruptcy yesterday (3 July) and thus added themselves to the list of pandemic casualties.
G-Star Raw filed for bankruptcy in Los-Angeles where it is based and it was distinct in its filings submitted to court that that it didn’t have enough finances to handle the current crisis and Chapter 11 protection from creditors was the only way out.
Notably, the largest creditor in its bankruptcy list is its landlord at 475 Fifth Avenue in New York, to whom it owes US $ 426,007. The Dutch-based G-Star Raw specialises in unwashed and untreated denim and has over 6,500 selling points worldwide.
Meanwhile Lucky Brand, also based in Los Angeles, has also gone to court with a stalking-horse bid, wherein it would see its operating assets being sold to SPARC Group – the owner of lifestyle brands such as Nautica, among others.
To manage the crisis, in case the agreement with the SPARC Group fails, Lucky Brand has also signed a back-up deal with the Authentic Brands Group.
Lucky Brand, in its filings, said that to facilitate the sale and minimise its burden owing to the pandemic challenges, Lucky Brand has decided to initiate proceedings under Chapter 11.
Besides denim, US-based Lucky Brand also produces activewear, outerwear and T-shirts, among others and has 150 company-owned stores in the US, Puerto Rico, Canada and Europe.