Centric Brands LLC is officially out of bankruptcy.
The Zac Posen parent announced today that it has completed its financial restructuring and emerged from voluntary Chapter 11 proceedings. As part of the exit, it has implemented its reorganization plan, which was approved in the United States Bankruptcy Court for the Southern District of New York.
The company shared that it has reduced its debt by roughly $700 million, leaving the bankruptcy process with a “stronger capital structure,” as well as access to “substantial” cash and liquidity. It has also become a private entity, with financial backing from majority sponsor Blackstone, Ares Management Corp. and HPS Investment Partners.
“Throughout this process, we operated seamlessly without interruption and remained focused on serving our valued partners,” CEO Jason Rabin said in a statement. “We maintained excellent relationships with licensors and our supply chain — and ultimately delivered to our retailers.”
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He added, “We now emerge with an optimized business structure, supportive partners, a qualified and engaged board and strengthened financials. We look forward to maximizing our potential and creating opportunities for future growth.”
Centric Brands — whose owned brands also include Hudson, Robert Graham, Avirex and Swims — filed for Chapter 11 protection in mid-May as the coronavirus pandemic took hold in the United States. At the time, it listed its assets in the range of $1 billion to $10 million, about the same as its estimated liabilities. (It also holds licenses for more than 100 labels including Kate Spade, Frye, Jessica Simpson and Timberland.)
In mid-September, its $700 million Chapter 11 plan received the go-ahead after the company paid nearly $6 million to end objections and legal claims from its unsecured creditors.
“While the impact of COVID-19 has been challenging for our industry, we are very well positioned to navigate the current environment,” Rabin added. “We will continue leading the industry in our core segments, including kids, accessories, and men’s and women’s denim and lifestyle. With Blackstone’s support, an improved capital structure, strategic relationships and industry expertise, we are built for a strong future ahead.”