The company plans to use the bankruptcy proceedings to facilitate those store closures and cut more than 80 percent of its debt, it said in a statement. James Miller, the chief executive officer since 2017, will step down and take on an advisor title and be on the company’s board. The new CEO will be Silvia Mazzucchelli, a board member who was also the former CEO of Modcloth.
The bankruptcy filing follows dwindling sales, liquidity issues and a disrupted sale process, all of which have been attributed to the covid-19 pandemic. The company, which was founded in 2001 and is owned by private equity firm KKR, owned 33 branded stores across the US at its peak.
With store closures during the pandemic, retail revenues fell by 85 per cent in 2020 and wholesale revenues by 70 per cent. E-commerce, however, grew 37 per cent during the year to $27.8 million, which was about half the company’s revenues for the year.
According to the filings, among the Collected Group’s top creditors are mall venues and landlords including Century City Mall LLC and Tysons Galleria, besides a number of clothing vendors. KKR will retain ownership after the bankruptcy. The company has $185.3 million in funded debt obligations and $35.5 million in unsecured debt, the filings mentioned.
Fibre2Fashion News Desk (SG)