BCBG Max Azria has filed for chapter 11 bankruptcy as customers are shopping more online than in stores.
According to an article on Reuters, BCBG Max Azria filed for chapter 11 bankruptcy on Wednesday. The company is the latest to do so as customer are now shopping more online than in stores.
The company listed its assets from $100 million to $500 million and its liabilities from $500 million to $1 billion. That’s according to a chapter 11 filing with the U.S. Bankruptcy Court for the Southern District of New York.
The company said in a statement that it has received a commitment of $45 million in debtor in processing. That money will be used for working capital that the company can continue to operate during bankruptcy.
The company has reportedly informed mall owners of its plans to close most of its 200 U.S. stores. The company will also be closing stores in Canada in addition to the 120 stores the brand said it would be closing in January.
Reuters reported that the company was preparing to file for bankruptcy last week. Sources with knowledge of the bankruptcy said the company was working with financial and legal advisors to prepare for the filing. The sources also said that some companies may want to buy BCBG Max Azria’s assets.
BCBG Max Azria, of course, declined to comment.
Marty Staff, Acting Interim Chief Executive of the company, released a statement saying, “the steps we are taking now, to address the shift in customer shopping patterns and the growth of online shopping, will allow us to focus on our partner relationships, digital, ecommerce, selected retail locations, and wholesale and licensing arrangements.”
BCBG Max Azria joins a group of retailers who have already filed for chapter 11 bankruptcy including Aeropostale, American Apparel, and more. Other brands like Macy’s, Ralph Lauren, and Old Navy have been closing stores. Where brands like Zara and H&M are succeeding, others aren’t because customers are shopping more online than in stores.
BCBG Max Azria and other brand need to get customers to buy their products online to increase sales and profits. Closing stores would probably help the brand do that.
So, what do you think? Will BCBG Max Azria increase sales and profits? Let me know in the comments below. Also, don’t forget to subscribe to get new posts sent directly to your inbox and follow me on Facebook, Instagram, and Snapchat.
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