Retailer BCBG Max Azria filed for bankruptcy and is making a major shift towards eCommerce, with a series of store closures that started earlier this year.
“Like many other apparel and retail companies, BCBG has fallen victim in recent years to adverse macro-trends, including a general shift away from brick-and-mortar to online retail channels, a shift in consumer demographics away from branded apparel,” Chief Restructuring Officer Holly Felder Etlin said in court papers filed Wednesday (Mar. 1) in federal court in Manhattan, Internet Retailer reported.
The company owes lenders approximately $459 million and is awaiting a judge to approve an additional $45 million loan amount that is designated to help BCBG get through bankruptcy.
In January, the retailer announced plans to close stores and restructure the company due to mounting pressure from its debt burden and more consumers opting to shop online.
“The steps we are taking now to address the shift in customer shopping patterns and the growth of online shopping will allow us to focus on our partner relationships, digital, eCommerce, selected retail locations, and wholesale and licensing arrangements,” Marty Staff, acting interim CEO, explained in a statement.
The retail chain plans to shut down a number of brick-and-mortar shops and refocus on licensing, eCommerce and selling through other retailers, Seth Lubove, a spokesman for BCBG at Sitrick & Co., told Bloomberg in an emailed statement at the time.
Lubove noted that BCBG has “too large a physical retail footprint.”
“In order to remain viable, the company — like so many others in its industry — must realign its business to effectively compete in today’s shopping environment,” he added.
Though bankruptcy was not seen as an imminent risk to the business at the time, it looks as though BCBG may have its day in bankruptcy court.