John Varvatos files for Chapter 11 bankruptcy
New York-based men's fashion company John Varvatos Enterprises Inc., the eponymous company of designer John Varvatos, has filed for Chapter 11 bankruptcy.
The company, known for outfitting rock stars like Iggy Pop, the members of Green Day and Velvet Revolver, Bruce Springsteen and more, made the filing on Wednesday in the United States Bankruptcy Court for the District of Delaware. As part of the filing, the company plans to sell to an affiliate of Lion Capital LLC, the majority owner of John Varvatos. In court filings, Varvatos listed over $140 million of debt.
Like many companies, John Varvatos experienced a major hit to its business when it closed all of its stores on March 18 and laid off hundreds of workers in response to the Covid-19 pandemic.
However, despite high-profile partnerships throughout the years with companies like Converse and Stoli Group, the company has been facing difficulties for years. In 2015, the company struggled after it initiated “cost-cutting measures that involved altering the brand’s clothing to attract customers in the mass market, which didn’t resonate with the brand’s existing customers,” said Joe Zorda, the company’s chief financial officer, in court filings.
In 2003, the company was sold to VF Corporation along with the sale of Nautica Enterprises, only to be sold again in 2012 to Lion Capital. In 2017, a sale was yet again on the table to Authentic Brands Group, only for the deal to be called off.
In March, John Varvatos incurred another blow when a judge ruled that the company must pay $3.5 million as the result of a discrimination lawsuit filed by female sales associates; a debt that the company is still working to pay while the pandemic has caused its in-store and online sales to drop.
All John Varvatos stores remain closed.
The company's namesake, a Michigan native, gained experience in the fashion industry working for brands like Ralph Lauren and Calvin Klein before launching his brand in 2000. Throughout his career, his love of rock music has carried though his range of ventures, from the rock-n-roll aesthetic of his designs to his choice to launch his own record label and set up a John Varvatos store in the former home of iconic music venue CBGB.
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