Following in the unfortunate trend of Wet Seal, The Limited, and American Apparel, BCBG Max Azria is shutting down stores all over the country. Falling victim to changing shopping habits and E-commerce, the California-based brand is closing brick-and-mortar stores all over the country. Although no clear number has been announced, CNBC reported that at least 120 of the 175 U.S. stores will be closed. A headline from news outlet Racked reveals the company’s financial situation may be even more dire than it seems: “BCBG May Be Going the Way of American Apparel: Bankrupt.”
BCBG – which stands for the French phrase “bon chic, bon genre” (good style, good attitude) – was founded in 1989 by the Tunisian designer Max Azria. In 1998, the company acquired the Herve Leger fashion house, which led to the label being relaunched in 2007 by the Azrias. The brand boasts on its website that these designs were “quickly embraced by celebrities like Kate Winslet, Victoria Beckham, Alicia Keys and Catherine Zeta-Jones.”
According to Reuters, financial and legal advisors of the brand are preparing papers to file for bankruptcy as early as this week. Neither the brand nor its owner – investment firm Guggenheim Partners – has chosen to comment on the matter. The primary source for this rumor is a recording of a phone call with landlords overheard by reporters from Reuters that said the brand was looking for alternatives to bankruptcy while also trying to “slash its secured debt load of $485 million.”
This is not the first time BCBG has struggled financially. In 2015, the brand managed to restructure its debt, partially with the help of a $135 million cash infusion from investors.
Similar to American Apparel, which closed its 110 stores and filed for bankruptcy this month, BCBG has been advertising giant sales in all of its stores. Minnesota’s Star Tribune reported that these liquidation sales are expected to last anywhere between eight to ten weeks. Bloomberg also reported that at least 100 employees have been laid off.
— melixant (@melixant) February 27, 2017
It is possible that the name BCBG will not be disappearing completely, as it could follow in the footsteps of American Apparel, which sold its name to the highest bidder. However, this is definitely a fall from grace for the once booming French brand.