These 3 Beloved Clothing Brands Just Filed for Bankruptcy
The parent company has seen sales drop dramatically amid the pandemic and will be closing up shop.
The COVID-19 pandemic has decimated brick-and-mortar sales across various industries, but few retail environments have seen as much upheaval as the clothing industry. According to a report from Deloitte, clothing and accessory stores saw losses of 89 percent between February and April 2020, while consulting firm McKinsey found that up to 75 percent of clothing retailers could find that their finances become unsustainable due to lost revenue related to the pandemic. It's not just small businesses that are going under, either. The parent company of multiple popular clothing brands has just announced its bankruptcy filing due to COVID-related losses; read on to discover which brands are on the chopping block. And for more stores closing up shop, This Popular Chain Is Closing Up to 75 Locations.
Three popular brands are affected by the bankruptcy filing.
On Monday, April 5, The Collected Group—the parent company of clothing brands Current/Elliott, Joie, and Equipment—filed for bankruptcy, citing significant losses associated with the pandemic. The company, which was founded in 2001 and owned 33 stores across brands at its peak, shuttered all of its stores at the beginning of the pandemic. Three Joie stores reopened at the end of 2020, all of which have since closed. And for the latest retail news delivered straight to your inbox, sign up for our daily newsletter!
The brands' parent company has seen revenues fall 85 percent.
In The Collected Group's bankruptcy filing (via RetailDive), the company revealed that its revenues had fallen 85 percent amid COVID-related store closures and reduced foot traffic upon reopening, leaving the company with over $183 million in funded debt and $35.5 million in unsecured debt. The company has since sought a third-party buyer, reaching out to 212 potential purchasers, but to no avail. "These indications of interest reflect potential transaction values well below the amount of the secured debt," Evan Hengel, The Collected Group's chief restructuring officer, explained in the company's bankruptcy filing.
All of the company's brick-and-mortar stores are closing.
As a means of offsetting the major losses incurred in 2020, The Collected Group will shutter all its brick-and-mortar stores across brands. "The Company determined that it was in its best interest to 11 transition its business to focus exclusively on sales through its e-commerce platform and wholesale channels. In furtherance of that business strategy, the Company surrendered all of its stores to landlords," Hengel explained. The bankruptcy filing also notes that the company has already shut down its corporate headquarters in Los Angeles and New York City. And for more surprising retail changes you can expect in the near future, These Popular Products Are About to Disappear From Shelves, Experts Warn.
The company will focus on e-commerce and wholesale sales going forward.
While The Collected Group's retail stores may be a thing of the past, the companies in its portfolio will live on through e-commerce and wholesale channels. In addition to the Joie, Current/Elliott, and Equipment websites, the three brands will continue selling goods through its 305 U.S. and 272 overseas wholesale channels, which include department stores, digital retailers, and fashion rental services like Bloomingdale's, Harvey Nichols, Neiman Marcus, Net-a-Porter, Nordstrom, Rent the Runway, Revolve, and Saks Fifth Avenue. And for more stores that aren't long for this world, This Beloved Store Is Closing 65 Locations.