Betsey Johnson Files Chapter 11
Betsey Johnson LLC has hit a rough patch.
The company, a licensee that operates designer Betsey Johnson’s 63 stores and e-commerce, has filed Chapter 11 bankruptcy. The majority of Betsey Johnson stores will begin liquidating in the coming weeks, with up to 350 staffers expected to lose their jobs.
“I feel so sad for my store people and all my pink girls,” Johnson told Women’s Wear Daily. “They live and die for me. But I need to be better. I really need to work well and be more efficient.”
The root of Johnson’s problem is the Betsey Johnson Collection, her higher-end line sold in her boutiques. The Betsey Johnson label, on the other hand, is sold at Macy’s and will continue to be produced. Johnson herself will remain the creative director of her brand.
The company’s financial woes have been ongoing: in 2010, Steve Madden took over Johnson’s $48.8 million debt in exchange for full ownership of the company.
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“The decision to seek protection under Chapter 11 comes after months of rigorously pursuing alternative restructuring arrangements to address Betsey Johnson LLC’s cash-flow problems,” Jonathan Friedman, Betsey Johnson LLC’s CFO, told WWD. “After exhausting our resources and possibilities, it became apparent that neither a restructuring arrangement with a new equity investor nor a sale of the business enterprise as a going concern outside of bankruptcy was to be forthcoming. Accordingly, our board made the determination that a Chapter 11 store-closing process will likely be the best way to maximize the value of the company’s assets, for the benefit of its creditors.”
Steve Madden appears confident that it’s not the end of the brand, though. He told WWD that he expects to have a new license in place for Betsey Johnson sportswear “within days.”
And Johnson herself has got another project in the pipeline: Betsey + Lulu, a forthcoming reality show on the Style Network. Cartwheels to come!
