For the second time in less than three years, True Religion has filed for Chapter 11 bankruptcy protection.
In a court filing on Monday, the denim-focused retailer listed the estimated value of its assets at $100 million to $500 million — the same estimated value of its liabilities. CEO Michael Buckley said the company is receiving a fresh influx of capital from its largest investors to help it restructure under Chapter 11.
In court documents, True Religion said the coronavirus crisis precipitated its filing, writing that it “would have preferred to wait out the current instabilities of the financial markets and retail industry generally” but “simply could not afford to do so.”
When True Religion filed for its first bankruptcy in 2017, it reemerged four months later. Founded in 2002 and based in southern California, the company was acquired by TowerBrook Capital Partners for $824 million in 2013. It tapped Buckley, its former president, as CEO in November 2019.
True Religion operates about 100 stores in the U.S., which are all temporarily shuttered due to the coronavirus pandemic. The majority of the label’s wholesale partners, such as Neiman Marcus and Nordstrom, are also shut because of the virus. With brick-and-mortar revenue streams blunted, True Religion has made the “difficult decision” to furlough all nonessential employees.
The coronavirus pandemic has hit the fashion industry hard as economic uncertainty zaps discretionary spending and forces store closures. Like True Religion, major footwear players including Nordstrom, Macy’s and DSW parent Designer Brands Inc. have furloughed workers. To help solve cash flow issues, many companies have also tapped into revolving credit lines.
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