Bisou Bisou Retail Files Chapter 11

Los Angeles-based contemporary label Bisou Bisou filed a Chapter 11 petition for its retail operation in Los Angeles Superior Court on Jan. 4, according to David Nisenbaum, the company’s chief financial officer, who blamed a poor economic retail environment and a strong need to reorganize the company’s retail base.

“We have a strong brand that supports our wholesale and retail companies, but financially our retail stores were not performing,” said Nisenbaum, who issued a company statement on behalf of Bisou Bisou chairman and chief executive officer Marc Bohbot. “We needed to do what was necessary to ensure its longevity and its long-term financial stability.”

The filing will most likely allow the company’s $14 million retail operation to renegotiate lease agreements with property owners and slowly rebuild its 15-store retail division, which operates under Rutha Inc. and comprises about 30 percent of the company’s overall retail business.

The filing would not affect the company’s manufacturing unit, Nisenbaum said.

In a press release, Bohbot attributed the move to a poor economic environment and “dried-up” credit resources, adding that the company may have tried to expand its operations too quickly in an uncertain economic environment.

“We undertook expansion during a time when quality retail space was extremely tight and commanding high rents,” Bohbot said. “We could not foresee the events of 2001 that dramatically changed the retail environment.”

Bisou Bisou’s financial woes began shortly before summer, when the company announced the closing of six retail stores in Los Angeles; Glendale, Calif.; Plano, Texas; Wellington, Fla.; and two Las Vegas stores at the Fashion Show Mall and at the Aladdin Desert Passage. (The company is one of several retailers who are currently in litigation with the Aladdin Desert Passage, charging that the retail development mislead retailers, citing “fraudulent inducement” to open stores in the mall.) Last month, Bohbot said he expected to close six more stores.

The company also suffered a significant loss in a silent partnership with Sun B. Clothing, maker of junior sportswear brand B. Clothing, which laid off 60 workers and officially shuttered its operation last month.

“Right now Marc is looking for the best situation for his investments,” said Nisenbaum, who declined to discuss Bohbot’s involvement in Sun B. but added that the involvement was separate from the Bisou Bisou business and had no bearing on his decision to file for Chapter 11 protection.

The company will continue to focus on its manufacturing and licensing divisions. It is currently producing the Spring 2002 line, and Michelle Bohbot, head designer and co-owner, has begun work on the Fall 2002 collection.

Bisou Bisou’s licensing agreements include ones with Santa Monica, Calif.-based Fusion Marketing and Hayward, Calif.-based New York Transit Inc. for footwear; Mexico-based InterAmerica Sport SadeCV for all product categories; and Paris-based Trading Partners International for sportswear and sweaters. Nisenbaum said Bohbot is still negotiating an agreement with New York-based Betsch Group for a handbag license.