John Varvatos files Chapter 11. While facing bankruptcy, the brand has submitted a petition, before the Court of Delaware, to join the bankruptcy shelter program. According to such restructuring plan, Lion Capital, the majority business partner, will supposedly carry out the acquisition of the company.
Short history of Varvatos
They first launched John Varvatos brand in 2000, following the appointment of the homonymous American fashion designer as menswear creative director at Calvin Klein and Ralph Lauren. The company, headquartered in New York, is up to the manufacturing of men’s apparel, footwear, bags, belts and luxury accessories: they currently run 27 selling stores all over the world. Moreover, their products are for sale in a few department stores as well. In 2017, Varvatos tried to sell the chain to Authentic Brands Groups: yet, according to the New York Post, reportedly Lion Capital stood in the way of the deal.
Stores and employees
As reported by Business of Fashion, the pandemic, caused by Covid-19 outbreak, has forced the brand to close the whole of their selling stores and sack 200 employees. Which means, in other words, three quarters of their staff. Looking at the financial documents laid out by the brand, liabilities amount to over 100 million dollars. “Because of shops shutdown, the company could not feasibly be compliant with the payment of rent and debts”, remarked Chief Financial Officer Joseph Zorda in the files.
John Varvatos files Chapter 11
According to the restructuring plan, Lion Capital (who have been in control over the majority assets since 2012) will supposedly buy out the whole of the corporate business. Still, nonetheless, the Court has to allow the transfer: otherwise, they might put the business up for auction. “Agreement negotiations with Lion are undoubtedly a paramount stage while striving to change our company and foster consequently a sustainable long-term growth”, stated John Varvatos. “We still firmly believe that our brand, which has been running for twenty years, will come out on top again, stronger than before”.
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