Retail

True Religion In Midst Of Chapter 11 Filing

While the retail industry is undergoing a digital revolution, many merchants are feeling financial pressure.

One of the latest retailers to file for Chapter 11 bankruptcy protection is high-end denim company True Religion Apparel. The premium denim retailer recently announced plans to file in the District of Delaware U.S. bankruptcy court, and also signed a restructuring agreement with most of its lenders.

True Religion’s current assets and liabilities range from $100 million to $500 million. Through the restructuring agreement, the company will cut its debt by more than $350 million.

To alleviate stress during the Chapter 11 bankruptcy filing process, True Religion has secured a post-petition debtor-in-possession (DIP) $60 million round of financing from Citizens Bank. The funding will help the company run its business as usual.

While this news may seem like further proof of the downward spiral for retailers, True Religion is optimistic.

“After a careful review, 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,” said John Ermatinger, chief executive at True Religion.

As more retailers move through the transition of integrating the right technology into brick-and-mortar locations at the right time, it’s likely that we’ll continue to see bankruptcy filings and restructuring agreements throughout the industry.

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