Pic: Furla USA
Italian luxury brand Furla’s US subsidiary recently filed for Chapter 11 bankruptcy after being severely affected by the impact of the COVID-19 pandemic. But the company does not plan to exit the US market for good. It will take steps to return to the American market with a leaner and improved organisation, according to its president Giovanna Furlanetto.
The pandemic and the resulting lockdown forced Furla to temporarily shut its retail operations in March. Reduced traffic due to the health crisis also affected the performance of existing stores.
“We need to restructure the market in a more contemporary way, and through this, we expect future growth. The U.S. market remains interesting and strategic, but in line with our long-held beliefs, the stores we operate must be profitable. We must have a network that is lighter and more sustainable,” Furlanetto was quoted as saying by a fashion industry trade journal.
The company entered the US market in 1989 and today runs 14 stores, of which eight are outlets. The United States represented 7 per cent of Furla’s 2019 revenues.
The brand’s foot-traffic, particularly in locations in Indianapolis and Boston that were more dependent on local shoppers than tourists, was falling for two years before the pandemic, Elena Moncigoli, chief executive officer of Furla USA Inc., wrote in a declaration filed in the case.
The company is planning to close four of those locations during the bankruptcy, according to the filings.
“Furla USA was forced to cancel future orders and upcoming deliveries of product that had already been produced,” Moncigoli wrote in the declaration. “Some were exclusive to the wholesale partner. Furla USA has also had to deal with nonpayment of current outstanding balances.”
The retailer, which had to temporarily close its 14 locations around March, also indicated that it shrank its workforce during the pandemic. The company furloughed 90 employees at the time.
The company said it currently has about 34 full-time employees and 17 part-time employees.
Fibre2Fashion News Desk (DS)
Italian luxury brand Furla's US subsidiary recently filed for Chapter 11 bankruptcy after being severely affected by the impact of the COVID-19 pandemic. But the company does not plan to exit the US market for good. It will take steps to return to the American market with a leaner and improved organisation, according to its president Giovanna Furlanetto.