True Religion gets approval for its bankruptcy reorganization plan
In July, the denim retailer filed for bankruptcy with about $500 million in debt. Now, a bankruptcy court judge has approved the company’s reorganization plan.
When True Religion filed for Chapter 11 bankruptcy in July, it followed many other major clothing brands and retailers such as Rue21, BCBG Max Azria and Aeropostale who were forced to close stores and eventually declare bankruptcy in a difficult retail market.
“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," True Religion Chief Executive John Ermatinger said, in a statement at the time.
Just three months later, Delaware Judge Christopher Sontchi has approved the once popular denim retailer’s plan for reorganization. The proposed imitative would cut around 70 percent of its debt, which is estimated at $500 million.
In exchange for unloading the debt, creditors would take a large stake in the company. True Religion will also be forced to close many of its underperforming stores.
The California-based retailer currently has 128 retail stores, including its flagship store in Manhattan Beach, California. In addition to its standalone stores, True Religion also sells its denim at major department stores such as Nordstrom, Bloomingdale's and Saks Fifth Avenue.
The brand was established in 2002 by Jeff Lubell and Kym Gold and gained particular popularity in the mid 2000s for its embellished denim pieces.
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