Bankrupt women's fashion company BCBG Max Azria on Friday announced it has reached a deal to split nearly all of its remaining assets between fashion companies Marquee Brands LLC and Global Brands Group Holding Ltd.
Under the proposed deal, the terms of which were not immediately disclosed, New York-based Marquee Brands — a brand acquisition, licensing and development company — will acquire the rights to BCBG’s intellectual property while Hong Kong-based apparel, footwear and fashion accessories company Global Brands will take over marketing, sale and distribution of BCBG brands along with its wholesale operations, online sales platform and “select” brick-and-mortar locations, BGBG said in a press release Friday.
“This is the best possible outcome for customers, vendors, business partners, and our employees who are the lifeblood of the company. BCBG will remain a viable, creative and strong brand going forward across multiple platforms,” Marty Staff, acting interim CEO of BCBG, said in the release.
The release does not specify how many stores Global Brands will continue to operate. BCBG once operated 550 stores in the U.S., Canada, Europe and Japan, but announced the closure of 120 of those in the weeks preceding its March bankruptcy filing.
BCBG said it expects to close the deal as soon as the bankruptcy court approves its Chapter 11 plan, and that it anticipates this will happen before the end of July.
The U.S. Trustee filed a challenge to the plan in May, arguing it does not explain why some classes of creditor are being treated as unimpaired and excluded from the approval process and why it includes liability releases applying to nondebtor third parties and nonconsenting creditors. The Chubb Group has also filed an objection, saying the plan fails to explain how insurance policies and related agreements will be handled.
Representatives of BCBG, Marquee Brands and Global Brands did not immediately respond to requests for comment Friday.
The fashion house, founded by Max Azria in 1989, filed for Chapter 11 protection in New York in March, with the hope of restructuring more than $500 million worth of debt.
Over the past three decades, the high-end purveyor of womenswear grew to more than 550 stores across the U.S., Canada, Europe and Japan. Although the company has enjoyed years of success, it has seen a downturn in net sales over the past few years, declining more than 20 percent since 2014, from $785 million to approximately $615 million in the most recent fiscal year, according to court documents.
According to the release BCBG is being advised on the transaction by AlixPartners, LLP and Jefferies LLC, Marquee Brands by Moore & Van Allen PLLC and Global Brands by Reed Smith LLP.
BCBG is represented in the bankruptcy case by Joshua A. Sussberg, Christopher Marcus, James H.M. Sprayregen and Benjamin M. Rhode of Kirkland & Ellis LLP.
The case is In re: BCBG Max Azria Global Holdings LLC et al., case number 1:17-bk-10466 in the U.S. Bankruptcy Court for the Southern District of New York.
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