Centric Brands Files For Bankruptcy, Marquee Retakes BCBG License
The latest company to be forced into bankruptcy due to the COVID-19 crisis is Centric Brands Inc., which owns labels such as Robert Graham, Hudson and Zac Posen. It also makes and sells products for more than 100 licensed brands such as Calvin Klein, Tommy Hilfiger, Nautica and Under Armour.
On May 18, the New York-headquartered Centric announced that it had entered into a restructuring support agreement with the company’s secured lenders. The lenders will provide $435 million in debtor-in-possession financing for Centric to continue operating. It will emerge from the bankruptcy as a private company under its current lenders, said Jason Rabin, chief executive officer of Centric Brands.
“The current crisis has significantly impacted companies across all sectors. The pandemic disrupted many of our wholesale accounts’ ordering and constrained our cash flow. However, we are confident that with added flexibility in our capital structure, we will be well-positioned for long-term success during this period and beyond,” Rabin said. The company had traded under the symbol CTRC on the Nasdaq.
The bankruptcy also resulted in a couple of labels leaving the Centric group of brands. On May 18, Marquee Brands LLC, a New York-headquartered brand owner, marketing and media company, announced that it took ownership of Centric licenses for two prominent Los Angeles brands: BCBGMAXAZRIA, a women’s contemporary brand founded by Los Angeles fashion pioneer Max Azria, and BCBGeneration, its sibling brand focused on a younger demographic at lower price points.
Marquee acquired the intellectual property of BCBGMAXAZRIA, BCBGeneration and Hervé Léger for $108 million in 2017.
It partnered with Centric to produce apparel for these brands and to handle retail and e-commerce. Marquee will be taking these brands and their operations in-house, said
Jonathan Greller, head of strategy and corporate development at Marquee. The company will emphasize a digital strategy with its brands.
“Taking back the BCBG business and integrating it on to our Marquee-Direct platform with a heightened focus on product and our global partners will no doubt result in profitability that exceeds what could have been achieved through the prior license,” Greller said.