From Usa Today
Jeans designer and retailer True Religion is seeking a revival through Chapter 11 bankruptcy protection, having fallen to its knees amid the retail sector’s crisis and the rise of “athleisure wear.”
The retailer and manufacturer filed for court protection from its creditors early Wednesday in a federal court in Delaware. True Religion plans to close at least 27 of its approximately 140 stores, according to a court filing and USA TODAY research.
Snagged by similar trends that ensnared teen retailers American Apparel, Aeropostale and Pacific Sunwear, True Religion said it had failed to adapt to the industrywide shift to online sales and the decline of trendy denim.
The company, which also sells and designs other apparel, said it had won support from a majority of its top-tier secured creditors for a debt-cutting plan and secured a bankruptcy loan that would need authorization from a federal bankruptcy judge.
“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,” True Religion CEO John Ermatinger said in a statement.
Founded in 2002 by Jeff Lubell, Manhattan Beach, Calif.-based True Religion has more than 1,900 employees. It also sells its products in about 500 locations in North America and South America, including Nordstrom, Bloomingdales and Saks Fifth Avenue.
True Religion requested court permission to reject about 30 store leases, meaning those stores are likely set to close.
The company went private in 2013 in a deal arranged by investment firm TowerBrook Capital Partners, which owns the retailer.
True Religion said its business had been undermined by discounts at other retailers, online competition and the athleisure trend, in which yoga pants have become a substitute for jeans.
The company closed 20 stores in 2016, cut 25% of its corporate workforce and sought to bolster its digital operations, but those moves were insufficient.
Contributing: Kellie Elle and Sophia Tulp