New York, NY- Betsey Johnson a 34 year-old fashion line has declared bankruptcy and will close all of its 68 stand-alone stores.
The company will let go 350 employees who operate the stores and e-commerce division. The fashion icon will, however, still continue to design moderately priced sportswear and accessories which will be sold in department stores, Macy’s, Nordstrom and Saks Fifth Ave, and Bloomingdale’s.
The line has struggled over the past few years losing almost 20 percent of sales in their retail stores, and in an effort to keep the line alive they hired a bankruptcy attorney. The brand filed for Chapter 11 debt protection, which will allow them to restructure.
Steve Madden Inc. took control of the brand’s intellectual property in 2010 after forgiving a $48 million loan and will continue to produce the Betsey Johnson wholesale line.
In their bankruptcy filing, Betsey Johnson listed assets worth $23 million with debt liabilities at $15.4 million.
In February of this year the brand tried to find a buyer and contacted Morpheus Capital Advisors LLC, but the investment group was not able to find a buyer. Steve Madden Inc. decided that contacting a bankruptcy lawyer would “maximize the value of its assets for the benefit of the creditors.”
The line was developed by Betsey Johnson in 1978 and is known for their leg wear line, hippie-themed fashions and cocktail dresses.
The recession hit many businesses hard but recovery is possible when the troubled company hires a bankruptcy attorney to draft a debt reduction plan.