Habitual Declares Bankruptcy

Los Angeles–based premium-denim brand Habitual has declared bankruptcy in the United States Bankruptcy Court. Pacific Marketing Works , which owns the brand and two T-shirt brands, filed for Chapter 11 Protection Feb. 20 and has named New York–based manufacturer New Fashion Inc. as a possible buyer.

According to court filings, Pacific Marketing Works has between $1 million and $10 million in liabilities and assets valued at between $500,000 and $1 million. Court documents also point to a failed merger in 2007 with a Japanese company as the source of Pacific Marketing Works’ financial woes.

Habitual, which was founded in 2001 by the husband-and-wife team of Michael and Nicole Colovos, has seen its share of legal wrangling. After Pacific Marketing Works acquired a 50 percent share in the company, both parties filed lawsuits with a variety of allegations—the culmination of which was a recent settlement for the Colovoses, who now design the Helmut Lang collection in New York, valued at more than $2 million. Last month’s bankruptcy filing jeopardizes the Colovoses’ settlement winnings.

According to the Habitual Web site, the brands sell at more than 500 retailers, including American Rag, Bloomingdale’s, Creatures of Comfort, Diane Merrick and Douglas Fir in Los Angeles.—Erin Barajas