Early aughts denim fave True Religion Brand Jeans has filed for bankruptcy in a bid to reduce its debt by over $350 million, the New York Post reports.
An unstable economy coupled with the rise of discount retailers hit the iconic denim brand hard in recent years, resulting in a massive accumulation of debt, according to USA Today. After several recent attempts to get the company’s finances under control (including shuttering 20 stores and laying off nearly a quarter of its corporate workforce last year), True Religion officially filed a Chapter 11 bankruptcy petition in a Delaware court on Monday. If approved, the filing will allow the brand to remain in business by handing ownership over to creditors. A deal with lenders will also allow the denim brand to cut its debt by 75%, or $350 million.
In a statement, president and CEO John Ermatinger explained,
“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. This improved performance will allow us to enter into the next phase of our recapitalization process with confidence as we continue to execute against our strategic plan and drive the business forward.”
The good news? Unlike fellow mall brands American Apparel and The Limited — which both shut down after filing for bankruptcy — True Religion will stay in business “without interruption to customers, employees, or business partners,” though it is likely up to 30 of the brand’s 140 nationwide locations will close. As for what all this means for customers in the long run, though? We’ll just have to wait and see.
For more info, read True Religion’s press release here, and then check out our favorite (affordable!) denim brands here.
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