(Reuters) – Clothing company Lucky Brand Dungarees files for Chapter 11 bankruptcy, it said Friday, becoming the latest retailer to fall victim to the coronavirus pandemic.
The firm said it had entered into a “horse stalking asset purchase agreement” with SPARC Group LLC, which owns brands like Aeropostale and Nautica, for the sale of “substantially all” of its operating assets.
This agreement establishes an initial offer or a minimally accepted offer as a threshold for other potential buyers if they wish to bid.
Lucky Brand estimated both assets and liabilities in the range of $ 100 million to $ 500 million, his filing with the Delaware Bankruptcy Court showed.
“The COVID-19 pandemic has severely impacted sales across all channels,” the firm’s interim chief executive, Matthew Kaness, said in the statement.
“While we are optimistic about the reopening of the stores and the return of our customers, the business has not yet fully recovered.”
ABG-Lucky, a newly formed unit of Authentic Brands Group, the manager of the brand that bought Barneys New York in bankruptcy, will buy the intellectual property of Lucky Brand, the statement added.
The company said it had received new financing commitments from some existing lenders to guarantee sufficient liquidity to finance the business through the closing of the sale.
The statement did not specify the number of commitments received, adding that the company would operate its business during the Chapter 11 process.
Lucky Brand, founded in Los Angeles in 1990, joins a growing list of clothing retailers pushed into bankruptcy by the virus. J Crew Group, JC Penney and Neiman Marcus filed for bankruptcy in May.
Kanishka Singh’s report in Bangalore; Editing by Clarence Fernandez
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