Hundreds Get Final Pink Slips at BCBG Max Azria
As operations wind down at the bankrupt BCBG Max Azria Group, nearly 500 layoff notices have gone out to employees of the contemporary brand founded in Los Angeles almost 30 years ago.
By the end of the month, the brand and its sister labels are expected to be taken over by Marquee Brands and Global Brands Group, the successful bidders to acquire the intellectual property rights and assets of the company that filed for Chapter 11 bankruptcy protection on Feb. 28.
According to paperwork with the state Department of Employment Development on July 7, some 492 employees were given notice that they will be permanently laid off as of Sept. 5. The layoff notices did not include BCBG’s retail employees, sources said.
Prior to the most recent layoffs, BCBG issued pink slips to 310 employees between Feb. 22, 2016 and March 13, 2017.
“As previously announced, BCBG is selling a majority of its assets to a consortium consisting of Marquee Brands and Global Brands Group. The intent of the buyers is to offer employment to the majority of BCBG associates. The transaction is scheduled to close by July 31. Once the transaction closes, BCBG will begin winding down its operations over a 90-day period. Those selected for future employment with GBG or Marquee will be offered employment prior to the closing of the sale transaction or during the transition period,” a company spokesperson said.
On June 23, the U.S. Bankruptcy Court in New York approved the $165 million bid submitted by Marquee Brands and Global Brands Group to acquire the brand and its sister labels, operate about 20 stores as well as in-store shops located in major department stores. Liquidators Hilco Global and Gordon Brothers were also members of the bidding consortium.
Marquee Brands said it will seek to expand BCBG, BCBGeneration and the Hervé Leger brands into additional lifestyle categories on a global basis through existing and newly signed strategic partners and product licensees.
Marquee Brands, headquartered in New York, said it will maintain offices for BCBG on both the West Coast and East Coast.
Global Brands Group will serve as a licensee to Marquee to oversee the wholesale and retail platforms for the brand in North America.
At one time, BCBG employed 1,300 full-time workers and 1,400 part-time employees at its headquarters, warehouse and stores. Started in 1989 by Max Azria, the label was known for its contemporary clothing heavy on glamorous looks that sold from $250 to $750. BCBG—which stands for the French expression “bon chic, bon genre,” meaning “good style, good attitude”—acquired French design house Hervé Leger in 1998.
For years, BCBG borrowed heavily to finance its operations and keep some of its unprofitable stores open. At one time, its debt totaled more than $685 million, much of that was held by Guggenheim Partners. Now Guggenheim Partners and affiliates carry more than $324.4 million in BCBG loans and own 80 percent of the apparel company’s common equity.
Marquee Brands is a relatively new brand management company started a few years ago as a division of Neuberger Berman private equity. Its goal is to acquire brands with strong consumer awareness and grow them across several channels around the world.
Last November, Marquee Brands acquired the Body Glove brand and intellectual property from Body Glove International. The Body Glove label was started in Redondo Beach, Calif., in 1953 by twin brothers Bob and Bill Meistrell. The Meistrell family retains a minority interest in the Body Glove brand.
In 2015, Marquee acquired the Ben Sherman brand from Oxford Industries. That same year, it bought the Italian luxury brand Bruno Magli, known for its high-end footwear.