Thursday, April 26, 2012

Betsey Johnson Files for Bankruptcy

Sad news in the fashion world as the creative and colorful Betsey Johnson will shutter her stores.

Betsey Johnson LLC, the licensee that operates Betsey Johnson’s 63 freestanding stores, women’s apparel and e-commerce, has filed for Chapter 11 bankruptcy, WWWD is reporting. Most of the 63 stores will close within the next few week and 350 employees are expected to be let go.

Betsey Johnson herself will stay on as creative director to design the brand’s lower priced Betsey Johnson line, sold in Macy’s and other mass retailers, as well as oversee accessories and other licenses. “I love the moderate price range,” she told WWD. “It is in synch with all the girls who are buying my clothes.”

Jonathan Friedman, Betsey Johnson’s CFO, issued the following statement:

The decision to seek protection under chapter 11 comes after months of rigorously pursuing alternative restructuring arrangements to address Betsey Johnson LLC’s cash flow problems. After exhausting our resources and possibilities, it became apparent that neither a restructuring arrangement with a new equity investor nor a sale of the business enterprise as a going concern outside of bankruptcy was to be forthcoming. Accordingly, our board made the determination that a Chapter 11 store closing process will likely be the best way to maximize the value of the company’s assets, for the benefit of its creditors.
Betsey Johnson is one of the most beloved personalities in the fashion industry. Despite being nearly 70, she never fails to do a cartwheel on the catwalk at the close of her shows–which are always pure fun, just like her. She always lands on her feet after those cartwheels and we hope that she–and her employees–will now.

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