On Friday, Nine West Holdings filed for bankruptcy protection. The company is planning to sell some of its existing assets while reorganize others as excessive debt defeated the clothing and shoe company that Sycamore Partners controls.
The filing of Chapter 11 bankruptcy in New York listed debts at more than $1 billion. Nine West will use its bankruptcy protection to sell its Nine West and Bandolino brand, while reorganizing amongst its other businesses that include Anne Klein, according to its prepared statement.
Most of its creditors already have agreed to supports its reorganization, and a loan of $300 million is to be used to fund operations while the process takes place, said the company.
The CEO of Nine West Ralph Schipani said the company would retain its profitable, strong and growing apparel, jeans wear and jewelry businesses as well as continue operating them under new capital structures so their existing strengths can be leveraged to drive even more growth.
Nine West held one of the biggest debt loads across the entire retail industry and has been negotiating with creditors since sometime in 2017, with the idea of selling assets as a way to raise needed cash.
Authentic Brands Group is to submit a bid for the Nine West and Bandolino handbag and footwear business, and then an auction will test the market trying to find higher offers.
The profitable Jewelry Group, One Jeanswear Group, Anne Klein and Kasper Group businesses are being retained.
Kirkland & Ellis is the bankruptcy counsel for Nine West indicated the New York bankruptcy filing. Amongst the largest creditors that are unsecured are holders of unsecured notes at 8.5% that are due in 2019, an unsecured term loan of $305 million, and $256 million of notes at 6.125 due during 2034.
Nine West, which was named for its original street address in Manhattan, looked to meld fashion and comfort, but it missed on several style changes and then was taken over by Sycamore a private equity company from New York known for taking on retail brands that are deeply distressed and turning them around.
Sycamore acquired Nine West in a purchase in 2014 of the Jones Group Inc. for $2.2 billion which included its debt.
Since 2011, when Sycamore was founded, it has acquired, invested in or financed struggling retailers like Belk department stores, Talbots and Staples.