True Religion, the American apparel retailer, is all set to exit Chapter 11!
The designer jeans brand has finally got approval from the court to restructure under new ownership in Chapter 11.
As per the restructuring plan, True Religion would turn most of the new equity to its existing lenders.
While confirming more on the same, a spokesperson for the law firm Cole Schotz, which is representing the retailer in its bankruptcy case, said that a US $ 65.8 million with a team of term lenders enabled the retailer to finalise the terms of restructuring.
The retailer had filed for Chapter 11 back in April 2020 owing to the pandemic chaos, but its problems had started much before the COVID-19 crisis.
True Religion had first filed for bankruptcy in 2017 after it ran into heavy debt. Though Chapter 11 gave the retailer a chance to minimise its debt, problems continued and soon sales started slumping majorly owing to unattractive product designs.
For the period ended 1 February 2020, True Religion generated revenue of US $ 259 million at a worrying loss of US $ 50 million.
Despite its efforts to come out of the crisis by changing CEOs, cutting costs and negotiating deals with landlords, the retailer has today reached a stage where it stands today.
In these tough times, to see True Religion restructure in Chapter 11 clearly shows how much stakeholders value the apparel retailer.
Watch the space for more details!