True Religion emerges from Bankrupcy after 4 months
True Religion has come out of Ch. 11 Bankruptcy with a plan to close retail stores and reduce its debt from $471 million to $113.5 million by 2022.
John Ermatinger, CEO said, “With substantial debt burden removed, we are eager to turn our full attention to implementing our forward-thinking strategy, including improving our retail operations, new partnerships and growing the brand’s digital presence."
True Religion cited athleisure as a main reason for the decline in its denim business. The brand had also historically grown through its retail store network which has not escaped the retail apocalypse affecting the entire industry.
At its peak, True Religion operated 128 US stores and 11 globally. The brand also sold in 500 wholesale partnerships throughout the Americas including Nordstrom, Bloomingdale's and Saks Fifth Avenue. The terms of the bankruptcy agreement include reducing store count by at least 27 stores.
Retail landlords are some of True Religion's largest creditors who staked a claim in the bankruptcy proceedings. Malibu Village in Malibu, CA is owed $107,000. Fashion Show Mall in Minneapolis and Chicago's Park Meadows Mall are each owed approximately $55,000.
Prior to filing bankruptcy, True Religion closed 20 store locations in 2016 and laid off 25 employees at its Manhattan Beach, CA headquarters. The bankruptcy plan includes an additional $60 million exit loan from Citizens Bank, the same entity who provided a $60 million operating loan for the company while it went through bankruptcy.
True Religion was founded in 2002 by Jeff Lubell who sold the company in 2013 to TowerBrook Capital Partners for $835 million.
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