America’s iconic denim label, True Religion Apparel Inc., has become the latest fashion retailer to have filed for bankruptcy protection. The fashion brand expects it’d take 90 to 120 days to obtain confirmation of its pre-arranged plan by the US Bankruptcy Court. Throughout the implementation of this process, the premium denim retailer will continue to operate its business without interruption to customers, employees and business partners.
“After a careful review, we are taking an important step to reduce our debt, reinvigorate True Religion’s iconic brand, and position the company for future growth and success,” said John Ermatinger, President and CEO of True Religion in a statement issued by the company.
With the bankruptcy filing, the upscale denim maker joins other counterparts which have fallen out of ‘fashion’ in the retail market – American Apparel, Papaya Clothing, Rue21 and others as consumers are increasingly shopping online, turning less to the brick-and-mortar specialty shops and department stores.
The Fashion market dominance of online retailers such as Amazon has gravely hurt True Religion which currently operates around 130 stores that make up for 75-80 per cent of its total retail sales. Additionally, the pricey denim label has tie-ups with department store chains like Sakes Fifth Avenue, Nordstrom and Bloomingdale’s which sell its products.
Meanwhile, the jeans retailer recently announced its year-to-date adjusted EBITDA through May at US $7.1 million, which is 95 per cent more than what it attained in 2016. This astounding progress on the retail front will allow True Religion to enter the next phase of recapitalisation process with buoyancy as it continues to drive the business forward.
