2017 Newsmaker: After Decades on the Contemporary Clothing Scene, BCBGMaxAzria Declares Bankruptcy
When Max Azria established his BCBGMaxAzria brand in 1989, he was immediately off to the races in the world of women’s contemporary clothing.
Tapping into his French and Tunisian roots, the brand was named after a French saying, “Bon chic, bon genre,” a hip Parisian phrase meaning “Good style, good attitude.”
For decades, the Los Angeles label was very popular with high-end department stores and boutiques. Later, BCBGMaxAzria branched out and opened its own chain of stores that by 2006 numbered 550 worldwide.
It also acquired the French label Hervé Leger in 1999 and started up BCBGeneration for a younger, more price-conscious customer.
But the recession of 2008, the blossoming of fast-fashion retailers and the advent of online shopping took their toll on the company as debt mounted. At one time, BCBGMaxAzria had $685 million in loans owed primarily to Guggenheim Partners Investment Management and its affiliates.
In 2015, Guggenheim Partners swapped its debt for 80 percent equity in the company, eventually pushing Max Azria out the door. On March 1, the company filed for Chapter 11 bankruptcy protection.
This summer, Marquee Brands paid $108 million for the company’s intellectual-property rights for all three brands. Global Brands Group paid $23 million to be the licensee for Marquee Brands with the intention of continuing to manufacture the brands’ clothing collections at the same factories that were used by BCBGMaxAzria. Global Brands is also operating some of the BCBGMaxAzria stores in the more profitable locations.
Marquee Brand executives said they acquired the brands because they thought they still had legs. Chief Operating Officer Cory Baker said the BCBG customer is still a loyal shopper, and Marquis planned to keep the contemporary look of the brand, which would continue to sell from $100 to $400. In the past, the typical customer has been between the ages of 20 and 35.
Special attention will be given to the Hervé Leger brand, which was slightly neglected and is an under-penetrated luxury brand with an international market. The new owners see Hervé Leger growing with more licenses for eyewear, footwear, luxury fragrances, handbags and lifestyle categories.