6/15/17 Recap: California-based apparel retailer targeted to the 16-25 year-old demographic and with 80 stores located in malls and shopping centers throughout the US filed for bankruptcy to take advantage of the Bankruptcy Code's "automatic stay" and have time to evaluate and rationalize its retail store footprint. Sadly, the company opted to expand at PRECISELY the wrong time as it opened approximately 50 stores in the last 6 years, incurring significant setup/startup costs in the process. Now it will need to engage in extensive negotiations with landlords to determine what, if anything, it can reorganize around. As part of the filing, the company has already identified 30 locations that it intends to exit from, if it hasn't already.
11/9/16 Recap: Sophia Amoruso's provocative female-fashion e-commerce retailer with two California brick-and-mortar locations collapses under the weight of its own growth, global currency effects, and the inability to tap capital markets given depressed valuations for retailers, generally, and e-commerce businesses, specifically, and files for bankruptcy to delever its balance sheet. There is no stalking horse bidder for the assets. 87% of its revenues are from e-commerce. The company had at least $65mm of venture capital funding (Index Ventures, Ron Johnson).
Jurisdiction: C.D. of California
Capital Structure: $15mm secured debt (Hercules Technology Growth Capital Inc.), $5mm unsecured convertible bridge loan (at 3x liquidation preference)(Stamos & Johnson Fund I, LLP)
Company Professionals:
Legal: Robins Kaplan LLP (Scott Gautier, Lorie Ball, Kevin Meek)
Investment Banker: Peter J. Soloman Company
Claims Agent: Rust Consulting/Omni Bankruptcy (*click on company name for docket)
