John Varvatos Enterprises Inc. is bankrupt.
The menswear company today filed for Chapter 11 bankruptcy protection in Delaware. The brand listed assets of up to $50 million and liabilities of $100 million or more. As part of its restructuring, John Varvatos will sell its business to existing investor Lion Capital LLP, subject to court approval.
“The agreements with Lion represent a critical step in our process to transform our business to drive long-term, sustainable growth,” the company’s eponymous founder John Varvatos said in release. “We have taken decisive action to respond to the challenges that all retailers face in the present environment and we remain extremely confident that our brand, celebrating its 20th year in business, will emerge even stronger. We have a passionate team, a fierce global consumer following and a commitment to our customers, whom we expect to serve for many years to come.”
Varvatos said the brand has been “greatly impacted by the negative effects of the coronavirus pandemic.” The company temporarily shuttered all doors due to the pandemic and took a number of steps to conserve cash.
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Other fashion retailers have also been facing bankruptcy headwinds in recent weeks. On Monday, J.Crew filed for Chapter 11 bankruptcy. The company said it plans to restructure its debt and work to reposition the J.Crew and Madewell brands for the long-term. Further, over the past few weeks, JCPenney, Gap and Neiman Marcus have joined an expanding list of retailers on bankruptcy watch. While the health crisis has exacerbated their financial struggles, the writing has been on the wall for certain companies for some time.